Executive Summary: Key Legal and Evidentiary Issues

• Dispute centers on whether Kaleido could retroactively modify eligibility criteria for education assistance payments (PAE) under existing scholarship/education savings contracts without individualized consent.
• Core prescription issue is when the three-year limitation period began to run: at the 2017–2018 rule change and initial payments, or only once the alleged financial loss became concrete in the beneficiaries’ first university session in 2022.
• Determining the point at which the Derome beneficiaries could reasonably know they had suffered a compensable loss required evidence of their academic progression and timing of PAE payments.
• Interpretation of earlier representative decision (Delisle c. Kaleido, 2024 QCCQ 1098) was contested, particularly whether its “1 June 2022” outer limit for non-prescribed claims automatically applied to all similar cases.
• Alleged judicial admissions in the plaintiffs’ pleadings about dates (2017–2018) were scrutinized to see if they fixed the start of prescription, raising a technical evidentiary issue on the scope of judicial admissions in small claims.
• The court ultimately treated the confirmation of prejudice in 2022, supported by university transcripts and payment chronology, as central evidence justifying rejection of Kaleido’s motions to dismiss for prescription.

Factual background and parties

The case arises from education savings/scholarship plans marketed in Québec by Fondation Universitas du Canada (later Kaleido Croissance inc.) under “Conventions de bourses d’études” entered into by subscribers on behalf of child beneficiaries. In 2002, Francine Scott, as subscriber, signed two such conventions: one to benefit her granddaughter Emily Derome (eligible for PAE from 2019) and another to benefit her grandson Alexandre Derome (eligible from 2020). Pierre Derome, their father, acted as authorized mandatary of Ms. Scott and is also a plaintiff alongside each child in separate small-claims files. The defendant in both is Kaleido Croissance inc., as successor to Fondation Universitas. The proceedings are before the Cour du Québec, Civil Chamber, Small Claims Division, in the Longueuil district, under file numbers 505-32-708624-243 (Emily and Pierre) and 505-32-709166-251 (Alexandre and Pierre). The present judgment deals only with Kaleido’s preliminary objections (demandes en irrecevabilité) based on prescription, not the full merits of alleged contractual breach.

The original PAE plan and eligibility rules

Under the 2002 scholarship conventions, the plan allowed each beneficiary to receive up to three PAE (bursary) payments, funded by pooled investment income accumulated on subscribers’ contributions for each cohort. The contracts specified strict eligibility conditions tied to certain post-secondary tracks. In Québec, admissible programs were: (i) a first-cycle university program requiring at least 90 credits (a bachelor’s degree) and (ii) three-year technical CEGEP (DEC technique) programs or equivalent six-session programs. PAE were staged according to academic progress: for university, at 12, 36 and 60 credits; for technical CEGEP, after 20 and then 30 completed courses, with a third bursary if the beneficiary later pursued university and obtained 12 university credits. General CEGEP programs and vocational/professional studies did not trigger any PAE under the original regime. The structure of the fund meant that subscribers renounced investment income, which was pooled by cohort and distributed among “qualified beneficiaries,” with no guarantee as to the amount of any given bursary; the size of PAE depended on total accumulated income, the number of units subscribed and the number of qualified beneficiaries in the cohort.

The 2017 rule change and its financial impact

In 2017, Kaleido implemented a significant modification to PAE eligibility rules. It “assouplit” (relaxed) the criteria to align with minimum requirements under federal and provincial income tax legislation, extending PAE eligibility to beneficiaries enrolled in general CEGEP or professional training programs. The 31 December 2017 “Rapport sur le rendement des placements” sent to subscribers described the consequence of this decision: investment income that had previously been shared among a narrower group of beneficiaries (those in university or technical CEGEP programs) would now be spread across a larger pool of students meeting the broadened criteria. Kaleido itself acknowledged that this would reduce each eligible student’s share of the PAE pool, as more beneficiaries would qualify for payments from the same collective fund. Many subscribers and beneficiaries, including the Derome family, viewed this retroactive change as illegal and abusive, alleging it fundamentally altered the economic bargain of pre-existing contracts by diluting the PAE amounts they expected when they first subscribed.

Parallel litigation and the Delisle representative decision

This dispute did not arise in isolation. By 2022, around 90 small-claims actions had been filed across 20 judicial districts against Kaleido-related entities, all challenging the same 2017 modification and its impact on PAE. The core common question was whether Kaleido could lawfully amend eligibility rules with majority approval of subscribers and apply those changes to earlier contracts without breaching its contractual obligations or duties of good faith. A second recurring question was whether claims filed after mid-September 2021 were time-barred under Québec’s three-year extinctive prescription. To manage these numerous similar cases, the Cour du Québec ordered a common evidentiary record to be established in five “test” files involving members of a single family. Judge Jacques Tremblay rendered the key representative judgment on 12 February 2024 (Nathalie Delisle et al. c. Fondation Kaleido et al., 2024 QCCQ 1098). In that decision, after reviewing facts and prescription principles in depth, he indicated that, based on the evidence before him, 1 June 2022 represented the ultimate date for instituting non-prescribed proceedings concerning the same factual matrix for certain claimants. At the same time, the earlier 2022 management judgment explicitly allowed parties in other files to adduce supplementary, individualized evidence on prescription and quantum at later complementary hearings, recognizing that the common record would not necessarily resolve all particular issues in all subsequent cases.

Prescription, knowledge of damage and the Derome plaintiffs’ situation

The essential legal debate in the Derome cases concerns when their three-year limitation period started. Kaleido argued that, because the contractual changes were approved in 2017 and their financial effects were known or knowable by late 2017 or early 2018, any ensuing actions had to be brought by 1 June 2022 at the latest. On this view, the plaintiffs’ filings in December 2024 (Emily and Pierre) and June 2025 (Alexandre and Pierre) were out of time. Kaleido relied both on the Delisle “1 June 2022” benchmark and on allegations in each originating application that referenced 2017–2018 as the dates when the contractual breach occurred or when “dommages allégués seraient survenus.” In response, the Derome plaintiffs maintained that while the contract change occurred in 2017–2018, their actual loss could only be confirmed once they reached university and received their third PAE, because only then could they compare what they received against what would have been payable under the original rules, including the effect of attrition on cohort size. They produced their first-session university transcripts, showing they began university in autumn 2022 and satisfied the original eligibility conditions at that time. Both Emily and Alexandre had already received two PAE payments (for CEGEP studies), but the court accepted that those initial payments did not allow them to reliably measure the alleged shortfall attributable to the rule change. The judge distinguished between (i) cases where damage is known but its exact amount is still to be quantified, which does not delay prescription, and (ii) cases where it is uncertain whether any compensable loss exists at all, in which event prescription does not begin. She aligned this distinction with Judge Tremblay’s reasoning in Delisle concerning another beneficiary, where he had found a claim premature because any prejudice from rule changes remained hypothetical until the beneficiary actually qualified for a PAE under the relevant path (in that case, university). Here, the judge considered that until Emily and Alexandre started university and became entitled to the critical third PAE, any alleged reduction caused by the broadened eligibility rules was still potential rather than concrete.

Judicial admissions and their limits in the prescription analysis

Kaleido further argued that the plaintiffs had effectively “admitted” in their pleadings that the damage dated back to 2017 or 2018, for example by alleging that Kaleido “a causé les dommages” on or about specific dates tied to the 2017 rule change. The court rejected this line of argument on technical evidentiary grounds. It held that judicial admissions in pleadings can only relate to facts, not to questions of law such as the legal starting point of prescription. Moreover, in the Alexandre file, the same pleading that specified 1 October 2017 as the date of the fault also clearly alleged that the damage occurred around 1 September 2022, when PAE had been significantly reduced in light of the change. In the Emily file, the plaintiffs’ subsequent response to the defence clarified that the loss was only confirmed when she commenced university in 2022. At this preliminary stage, the court was bound to assume the truth of both the originating applications and the responses, as well as of the documentary exhibits, including transcripts and PAE payment records. When those materials were read together, they did not amount to a binding admission that prescription necessarily began in 2017 or 2018. Rather, they supported the plaintiffs’ position that damage crystallized in 2022, consistent with the analytical framework adopted in Delisle for similarly situated beneficiaries.

Outcome of the motions and financial consequences

Having found that the Derome plaintiffs could not reasonably confirm their alleged loss until they began university and received their third PAE, the court concluded it would have been premature for them to sue by 1 June 2022. On the pleadings and preliminary evidence, their actions filed in December 2024 and June 2025 were therefore not clearly prescribed. The judge accordingly dismissed Kaleido Croissance inc.’s motions to dismiss (demandes en irrecevabilité) in both files, allowing the claims to proceed to a hearing on the merits where the alleged contractual breach and quantum of any shortfall in PAE will be examined in detail. The successful parties in this procedural judgment are the plaintiffs—Emily and Pierre Derome in file 505-32-708624-243, and Alexandre and Pierre Derome in file 505-32-709166-251—since they defeated Kaleido’s prescription defence at this stage. However, the court expressly disposed of both motions “sans frais,” awarding no costs, damages or other monetary amounts to any party. As a result, there is no monetary award ordered in favour of the successful parties in this judgment, and the total amount of any eventual compensation remains undetermined pending a future decision on the merits.