Executive Summary: Key Legal and Evidentiary Issues

• Litigation stems from a commercial sale of business where the purchaser contests the unpaid balance of the purchase price based on alleged misrepresentations about financial condition and inventory.
• Timeliness and management of expert evidence are central, specifically a late attempt to file a forensic accounting (juricomptable) report after expiry of a protocol deadline.
• The Court applies article 31 C.p.c. criteria and finds the proposed appeal from the interlocutory judgment has no reasonable chance of success.
• Delay and lack of prompt disclosure of the intent to rely on expert evidence are treated as incompatible with orderly case management and a fair opportunity for the opposing party to respond.
• Prejudice to the respondent, including likely postponement of a long-scheduled trial and the need for counter-expertise, is weighed more heavily than the applicant’s loss of its expert evidence.
• Leave to appeal is refused and costs of justice are awarded against the applicant, leaving the underlying monetary and liability issues to be decided later at trial.

Facts of the case

Machinerie Dubois inc. purchased a business from Gestion Frédex inc. A dispute later arose over the balance of the purchase price. In December 2022, Gestion Frédex inc. sued Machinerie Dubois inc. in the Superior Court of Québec, claiming $2,214,709, which it says is the remaining amount owing on the sale price of the business. The case is therefore rooted in a commercial sale of business and the financial representations made in connection with that transaction. In February 2023, the parties agreed to and signed a “protocole de l’instance” (case protocol). In this protocol, Machinerie Dubois inc., anticipating that it would file a counterclaim, expressly reserved the right to produce a forensic accounting (juricomptable) expert report, but only if this were done by 30 June 2023. This protocol deadline is central, as it governs when expert evidence must be disclosed. On 29 June 2023, just before the deadline, Machinerie Dubois inc. filed its counterclaim. In that pleading, it sought damages on the basis that Gestion Frédex inc. had made false representations about the financial situation of the business it sold. A significant component of the alleged misrepresentation related to the overvaluation of inventory, which would directly affect the value of the business and the justification for the purchase price. However, despite the reservation in the protocol, Machinerie Dubois inc. did not file any expert report by the 30 June 2023 deadline. The litigation continued on the basis of the pleadings and existing evidence, without expert financial evidence then on file. On 3 October 2024, the Superior Court set the trial on the merits for 4, 5 and 6 May 2026. At this point, the timetable for the trial was fixed and all parties were expected to prepare their cases, including any expert evidence, in a manner that would not put those dates at risk.

Attempt to introduce expert evidence late

In April 2025, the parties attended a settlement conference (conférence de règlement à l’amiable) in an effort to resolve the case without trial. Settlement efforts were unsuccessful, and the case remained set for trial. During her preparation for that conference, counsel for Machinerie Dubois inc. came to the view that the alleged overvaluation of inventory had a broader impact than originally appreciated. According to the applicant, it then understood that the inventory issue also affected the calculation of the revenues of the business, thereby influencing the overall financial picture and the claimed damages. Machinerie Dubois inc. maintained that it did not fully appreciate this effect earlier in the proceedings. In light of this new understanding, the company decided to retain a forensic accounting expert to prepare a report quantifying and explaining the financial impact, including how the allegedly overstated inventory might have affected revenues. In July 2025, Machinerie Dubois inc. formally mandated the preparation of this expert report. The report was completed several months later, and in November 2025 the company brought a motion in the Superior Court seeking authorization to file the expert report out of time, well after the 30 June 2023 deadline set in the protocol and after trial dates had been fixed.

The Superior Court’s interlocutory ruling

The motion was heard by the Honourable Marie-Ève Bélanger, j.c.s., of the Superior Court. Her interlocutory judgment refused authorization to file the expert report late. The judge gave several reasons for this decision, focusing on both procedural requirements and the overall administration of justice. First, she considered that Machinerie Dubois inc. should have sought to be relieved from its default in failing to comply with the case protocol before or at the same time as asking for authorization to file the report. In other words, she viewed a formal request to be “relevée de son défaut” as a necessary preliminary step, given the clear deadline in the protocol. Second, Bélanger J. assessed the criteria for allowing late expert evidence, including those articulated by the Court of Appeal in its earlier decision in Modes Striva c. Banque Nationale du Canada. She concluded that these criteria were not met in this case. She characterized Machinerie Dubois inc.’s decision to seek an expert report as essentially a change in litigation strategy, rather than a genuinely new circumstance justifying reopening the expert evidence issue. Third, the judge underlined the prejudice and disruption that would flow from allowing the late report. She found that filing the report at that stage could jeopardize the fixed trial dates in May 2026, because it was reasonable to expect that Gestion Frédex inc. would wish to obtain and file a responding expert report. With only a limited number of days set aside for trial, the addition of one or possibly two expert witnesses could require rescheduling or a longer trial. On this basis, she concluded that authorizing the late report would not be compatible with the orderly management of the case and would cause prejudice to the opposing party. For all of these reasons, Bélanger J. refused authorization to file the expert report out of time.

The application for leave to appeal

Machinerie Dubois inc. then applied to the Québec Court of Appeal for permission (leave) to appeal this interlocutory judgment. The application was brought under articles 31 and 357 of the Code of Civil Procedure, which govern appeals from decisions rendered in the course of proceedings, rather than on the final merits. The applicant argued, first, that the Superior Court judge had erred in law by treating a formal request to be relieved from default as a necessary precondition for seeking authorization to file the report. In its view, the judge wrongly imposed an extra procedural hurdle. Second, the applicant asserted that the judge had misapplied the Modes Striva criteria for admitting late expert evidence, undervaluing the importance of the expert report for its defence and counterclaim and overemphasizing the prejudice alleged by the respondent. Machinerie Dubois inc. also contended that the interlocutory judgment caused it irreparable prejudice, because it would be prevented from presenting this expert evidence at trial. From its perspective, being barred from using a forensic accounting report would significantly weaken its ability to prove that the business had been overvalued and that false financial representations had been made.

The appellate court’s analysis of leave to appeal

The application came before the Honourable Peter Kalichman, J.C.A., sitting as a single judge of the Court of Appeal. He started by recalling the test under article 31 C.p.c. For leave to be granted, the applicant must show both that the interlocutory judgment either decides part of the dispute or causes it irreparable prejudice, and that the proposed appeal is in the interest of justice. The “interest of justice” component includes several elements: the proposed appeal must raise a question that warrants the Court’s attention, have a reasonable chance of success, and be consistent with the guiding principles of civil procedure. The Court of Appeal has also emphasized in prior cases that it is not in the interest of justice to authorize appeals that have no reasonable likelihood of success. Applying this framework, Kalichman J.A. accepted that the judgment caused a form of irreparable prejudice to Machinerie Dubois inc., insofar as it prevented the party from filing the expert report and therefore from presenting that specific evidence at trial. He acknowledged that even if the choice to file the report could be seen as a change in strategy, this did not negate the reality that the evidence would be excluded. However, he stressed that the existence of such prejudice is only one factor. When assessing whether leave should be granted, the court must weigh all the circumstances, including the conduct of the parties, the stage of the proceedings, and the impact on the other side and on the court’s schedule. The judge examined in detail the timing and disclosure issues. He emphasized that Machinerie Dubois inc. had been fully aware that the protocol’s expert deadline had expired two years earlier. It also knew, or ought reasonably to have known, that Gestion Frédex inc. might seek to respond with its own expert evidence and that the trial dates in May 2026 left only limited time for additional witnesses. Crucially, despite having perceived the need for expert evidence at the time of the settlement conference preparation in April 2025, Machinerie Dubois inc. did not inform either the respondent or the Superior Court of its intention to obtain and file an expert report. It waited about seven months before raising the issue, only doing so when it filed its motion for permission to file the report in November 2025. Kalichman J.A. agreed with the Superior Court judge that this delay was difficult to explain or justify. Had Machinerie Dubois inc. disclosed its intentions promptly in April 2025, the parties could likely have agreed to a revised timetable that might have allowed expert reports on both sides while preserving, or at least better managing, the trial dates. Instead, the respondent and the court were confronted with a fait accompli: a completed report presented late, with corresponding pressure on the established trial schedule. In this context, the Superior Court’s focus on the prejudice to Gestion Frédex inc. and the need for efficient case management was, in the Court of Appeal’s view, entirely legitimate. While the applicant pointed to other decisions in which leave to appeal had been granted despite problematic conduct by a party, Kalichman J.A. made clear that there is no automatic right of appeal merely because a party suffers irreparable prejudice through the exclusion of evidence. The trial judge’s discretionary case-management decisions must be given deference, so long as they fall within a reasonable range.

Outcome and implications

Having reviewed the record and the reasons of the Superior Court, Kalichman J.A. concluded that the proposed appeal had no reasonable chance of success. He was not persuaded that the applicant could convince a panel of the Court that the Superior Court judge committed a reviewable error in applying the Modes Striva framework or in balancing the competing prejudices. He also noted that Machinerie Dubois inc. had not identified any question of principle or issue of conflicting case law that would extend beyond the parties’ immediate interests. In other words, the case did not raise a systemic or jurisprudential issue justifying appellate intervention at the interlocutory stage. As a result, he dismissed the application for leave to appeal and ordered that this be with costs (“avec les frais de justice”). Gestion Frédex inc. is therefore the successful party in this appellate proceeding, as its position—that the Superior Court’s refusal to allow the late expert report should stand—was upheld. Importantly, the Court of Appeal did not decide the merits of the underlying claim for $2,214,709 or the counterclaim based on alleged misrepresentation and overvaluation of inventory. Those issues remain for determination at the trial on the merits. The only financial consequence clearly ordered in this decision is that Machinerie Dubois inc. must pay the costs of justice related to the unsuccessful leave application, but the exact monetary amount of those costs is not specified and cannot be determined from the decision.