Executive Summary: Key Legal and Evidentiary Issues

• Territorial jurisdiction contested through a moyen déclinatoire, with defendants seeking transfer from the district of Québec to Saint-Hyacinthe based on a forum selection clause in a share sale contract.
• Scope and effect of article 41 C.p.c. analyzed, particularly whether a contractual choice of forum can exclude the “natural forum” of the defendants’ domicile when multiple defendants are domiciled in different districts.
• Legal significance of clause 7 of the share purchase agreement examined as an election of domicile under article 83 C.c.Q., and whether it creates an exclusive jurisdiction or merely an additional competent forum.
• Impact of the fact that only one defendant (Construction Bugère inc.) is party to the contract, while four co-defendants did not adhere to the election of judicial district, on the enforceability of the clause against all defendants.
• Interpretation of the plaintiffs’ written observations under article 535.5 C.p.c., particularly whether acknowledging the existence of the forum selection clause constitutes a waiver of their right to sue in the district of Québec.
• Costs allocation on the declinatory motion addressed, with the court departing from the ordinary rule and ordering each party to bear its own costs in light of how the plaintiffs framed their observations.

Background and parties

The dispute arises from a contract for the sale of shares (contrat de vente d’actions) involving private parties, both individuals and corporations, in the province of Québec. The plaintiffs, Alain Deschesnes and 9215-9540 Québec inc., commenced proceedings in the judicial district of Québec against five defendants: Construction Bugère inc., Marc Belzile, Dany Beaulac, Miguel Blais, and Gestion Belcourt 2020 inc. The core of this judgment is not the underlying commercial dispute on the merits, but a procedural challenge to the territorial jurisdiction of the Court of Québec in the district of Québec.

The forum selection clause and contractual framework

The contract of sale of shares contains a forum selection clause (clause 7) in which the parties agreed that any claim or judicial proceeding “pour quelque motif que ce soit, relativement au contrat” would be heard in the judicial district of Saint-Hyacinthe, to the exclusion of any other judicial district that might otherwise have jurisdiction under the law. This clause operates as an election of domicile (élection de domicile) within the meaning of article 83 of the Civil Code of Québec, by which parties may, in writing, choose a domicile for the execution of the act or the exercise of rights arising from it. In practical terms, clause 7 designates Saint-Hyacinthe as a chosen forum for any litigation connected with the share sale agreement. However, the judgment underscores that this clause binds only the contractual parties. Among the five defendants, only Construction Bugère inc. is a party to the share sale contract. The other four defendants—Marc Belzile, Dany Beaulac, Miguel Blais, and Gestion Belcourt 2020 inc.—did not adhere to this election of judicial district and therefore are not bound by that contractual choice of forum.

Procedural posture and the declinatory exception

The defendants brought a moyen déclinatoire under article 167 C.p.c., seeking to have the case transferred to the judicial district of Saint-Hyacinthe. They argued that the action was founded on the share sale agreement, that clause 7 validly chose Saint-Hyacinthe as the exclusive judicial district, and that the plaintiffs themselves were domiciled in Saint-Hyacinthe, so they could not properly file in any other district. They further contended that the plaintiffs’ written observations under article 535.5 C.p.c. acknowledged the existence of clause 7 without justifying proceedings in the district of Québec, which the defendants characterized as an implicit acceptance of Saint-Hyacinthe’s exclusive territorial jurisdiction. The plaintiffs resisted the motion, ultimately arguing that the presence of defendants domiciled in Québec City district allowed them, under the Code of Civil Procedure, to commence their proceeding in that district despite the contractual clause.

Statutory framework on territorial jurisdiction

The court’s analysis centers on article 41 C.p.c., which sets out the rules of territorial competence in first instance. As a default, the territorially competent jurisdiction is that of the place where the defendant is domiciled; where there are several defendants domiciled in different districts, the plaintiff may choose among those districts. Article 41 also provides that, if public order allows, the jurisdiction of the elected domicile of the defendant or that designated by the parties’ agreement is “also” territorially competent, unless the agreement is a contract of adhesion. The court stresses the word “aussi” (“also”) in the third paragraph of article 41. This indicates that a contractual choice of forum adds to the list of competent jurisdictions; it does not displace or extinguish the natural forum of the defendant’s real domicile. The judgment relies on consistent prior jurisprudence and the evolution of the law from former article 68 C.p.c. to current articles 41 and 42. Historically, article 68 provided that a purely personal action could be brought before the court of the defendant’s real domicile or, in cases of election of domicile under article 83 C.c.Q., before the court of the elected domicile, “nonobstant convention contraire.” The Court of Appeal in prior case law confirmed that a contract could not strip the tribunal of the defendant’s domiciliary district of its competence, interpreting “peut être portée” as preserving the plaintiff’s choice of forum at the defendant’s domicile even in the presence of a contrary contractual clause. When the Code of Civil Procedure was re-enacted and article 68 replaced with articles 41 and 42, the legislature removed the “nonobstant convention contraire” wording but did not change the substance of the rule. The Court of Québec, following appellate authority, holds that the new provisions merely simplify and restructure, without abandoning the principle that the defendant’s real domicile remains the natural forum.

Application to the multiple defendants and the chosen forum

In this case, there are multiple defendants, and at least two of them—Marc Belzile and Gestion Belcourt 2020 inc.—are domiciled in the district of Québec. Under article 41 C.p.c., this makes the district of Québec a territorially competent jurisdiction for the action. The forum selection clause in the share sale contract elects Saint-Hyacinthe as an additional competent forum for disputes relating to the contract, but it does not negate the jurisdiction of the court of the defendants’ real domicile. The analysis is reinforced by the fact that four of the five defendants are not parties to the contract and did not agree to the election of Saint-Hyacinthe. As a result, they cannot be compelled by that clause to litigate exclusively in that district. The court therefore concludes that clause 7 added Saint-Hyacinthe as a permissible forum for proceedings arising from the share sale agreement but did not exclude the district of Québec as a lawful venue when defendants are domiciled there. The plaintiffs were consequently entitled to introduce their action in Québec City.

Effect of the plaintiffs’ observations under article 535.5 C.p.c.

The defendants argued that the plaintiffs’ written observations filed under article 535.5 C.p.c., which acknowledged the existence of clause 7, amounted to a recognition of Saint-Hyacinthe’s exclusive jurisdiction and a waiver of any right to proceed in Québec. The court rejects this argument. It emphasizes that observations under article 535.5 are optional; a party may file them if it considers it appropriate, primarily to assist the court in deciding whether to reject a declinatory exception on the basis of the record alone. The plaintiffs’ reference to clause 7 is characterized as a mere acknowledgment of its existence, not a substantive concession that they were bound to sue only in Saint-Hyacinthe. Their failure in those observations to explain why Québec district was also competent does not, in the court’s view, constitute a renunciation of the right conferred by article 41 C.p.c. to sue in the district of the real domicile of one or more defendants. At the hearing, the plaintiffs clearly explained that they chose the district of Québec because two defendants were domiciled there. The court accepts that this explanation is consistent with the statutory regime and finds no waiver.

Costs of the motion and case management directions

While the plaintiffs prevail on the jurisdictional issue, the way their written observations were drafted influenced the court’s treatment of costs for the motion. Because the plaintiffs’ observations focused mainly on the alleged lateness of the declinatory motion and did not clearly articulate their jurisdictional basis under article 41 C.p.c., the defendants could reasonably infer that the plaintiffs were contesting the motion only on timeliness grounds. In light of this, the court departs from the general rule on costs and orders that each party bear its own legal costs associated with the moyen déclinatoire, rather than condemning the unsuccessful defendants to pay the plaintiffs’ costs. The judge also addresses case management. Noting that an action in the Superior Court, potentially related or relevant, is set for hearing shortly, and that article 535.12 C.p.c. generally requires that a settlement conference be held, the court orders a 30-minute management conference to be conducted by technological means. The clerk is instructed to schedule this conference, and the running of procedural time limits in the instance is suspended until 29 March 2026 to allow it to take place.

Outcome and successful party

In the operative part of the judgment, the Court of Québec rejects the defendants’ declinatory motion, confirms that the action may proceed in the judicial district of Québec, orders the holding of a case management conference, and suspends the computation of delays until a specified date. The plaintiffs, Alain Deschesnes and 9215-9540 Québec inc., are therefore successful on the central issue of territorial jurisdiction, as they retain their chosen forum. However, the court orders that each party assume its own legal costs for this motion, and it does not adjudicate on the merits of the underlying commercial dispute or any claim for damages. As a result, there is no monetary award, no quantified damages, and no costs payable from one side to the other in this decision, and the total amount granted in favor of the successful party cannot be determined because no sum is ordered at all.