Executive Summary: Key Legal and Evidentiary Issues

• Standing and interest of four corporate plaintiffs were not established, as no clear contractual or legal link was proven between them and the defendants.
• Scope and termination date of the 2019 financial management mandate (contrat de services P-4) were central to whether Simcotal and Simard could be held liable for alleged fiscal and financial losses.
• Plaintiffs advanced a global claim of 5.55 million dollars without concrete particulars of specific faults, causal link, or quantified damages, and failed to produce ordered evidentiary documents.
• The court found significant credibility gaps and misstatements by Boudreau, contrasted with detailed and reliable testimony from Simard and corroborating witnesses.
• Procedural conduct, including last-minute service of an inflated claim before Christmas, repeated non-compliance with undertakings and a court order, and alteration/substitution of documents, was held to constitute an abuse of procedure.
• Defendants were partially successful in their abuse motion, obtaining reimbursement of most of their extrajudicial legal fees and costs, though their separate claim for punitive damages was rejected.

Factual background and parties

The dispute arises from the breakdown of a commercial relationship between a group of companies controlled by Stéphane Boudreau and a consulting firm, Simcotal inc., owned and directed by Chantal Simard. Boudreau was the directing mind and majority shareholder of several corporations: Excavation Leblanc inc. (Excavation), Transport Leblanc inc. (Transport), Services Forestiers Gaspésie inc. (Services Forestiers), 9278-8017 Québec inc. (8017) and 9330-5456 Québec inc. (5456). Excavation was itself the majority shareholder of Transport, and Boudreau sat as administrator of the various entities.
In 2014, Boudreau suffered from necrotizing fasciitis (“bactérie mangeuse de chair”), with recurring health problems said to have limited his work capacity until 2023. At the same time, the group of companies was already facing serious financial and fiscal difficulties. The internal finance person, Robert McNeil, could not manage the entire administrative and financial burden alone.

The financial management mandate given to Simcotal

In September 2019, Excavation and Simcotal entered into a written “Contrat de services” (referred to in the judgment as the contract P-4). Under this contract, Simcotal, through Simard, agreed to act as controller and to provide financial management and turnaround support for Excavation. Simard was approached initially by a private lender, Capital Transit, which was already a major creditor of Excavation.
When Simard arrived, Excavation’s situation was already precarious: several government authorities were owed large sums for late source deductions and GST/QST; Deloitte had an unpaid invoice in the range of $25,000–$30,000; and major suppliers like John Deere and Caterpillar were pressing for payment. For the next six to eight months, Simard spent much of her time negotiating arrangements with a dozen or so creditors to avoid seizures and shutdowns.
From 2019 to 2022, Simard prepared internal financial statements for Excavation. However, Boudreau repeatedly refused to see or sign them and stayed away from finance-related documents, a point corroborated by McNeil. Simard insisted on weekly meetings where she would recommend which creditors and suppliers should be paid, but the ultimate decision always remained with Boudreau.

Corporate structure, intercompany dealings and operational issues

A notable evidentiary theme was what Simard described as “fling flang” and collusive financial management among Boudreau’s companies. Payroll for Services Forestiers was routinely paid from Excavation’s bank account, and equipment for the profitable forestry business was also financed through Excavation. In practice, Excavation bore significant costs that benefited Services Forestiers, undermining Excavation’s profitability and masking the true performance of Services Forestiers.
Operationally, Excavation’s equipment was old and poorly maintained. There was no systematic maintenance program, and the garage staff were frustrated that machines could not be repaired for weeks. This led to delays and loss of contracts. The court accepted that these structural and management problems pre-dated or existed independently of Simcotal’s limited mandate.

Powers of attorney and the end of the formal mandate

On 29 September 2022, as Boudreau was to undergo surgery, Excavation granted a general power of attorney to Simcotal, valid until 2 February 2023, to enable Simard to act if needed during his absence. The same day, Services Forestiers granted a separate general power of attorney to Boudreau’s mother, Denise Leblanc. Simard expressly declined a general mandate from Services Forestiers, stating there was already sufficient internal staff to handle that company, a view confirmed by McNeil.
Simard only briefly used the power of attorney given by Excavation and verbally ended it in October 2022 in the presence of Boudreau and Leblanc. Two letters dated 7 November 2022, sent to Boudreau and Leblanc, documented her intention to step back from certain matters. By December 2022, given Excavation’s impending closure, Simard formally ended the business relationship between Simcotal and Excavation.
Nonetheless, Simard continued to help Boudreau informally and without pay throughout 2023, mainly to help him avoid personal bankruptcy until another advisor could take over. In that context, on 18 July 2023, Services Forestiers signed a Revenue Québec authorization allowing Simard to access its information and act before that authority. Later that year, in November 2023, Simcotal billed Services Forestiers for work done from December 2022 and through 2023, reflecting this separate, later engagement.

Commencement of the main action and subsequent procedural history

On 20 December 2023, Boudreau and his companies filed and served an introductory motion seeking $5,550,000 in damages against Simcotal and Simard. This was done just days before Christmas, without any prescription-related urgency, something the court later characterized as a deliberately vexatious choice of timing.
In the course of discovery, Boudreau gave an examination on 24 September 2024 and made 28 undertakings to produce documents. On 4 December 2024, Justice Gagnon ordered the plaintiffs to comply with these undertakings, fixing 11 December 2024 as the ultimate deadline for most of the productions. Multiple documents, including those that were supposed to detail the alleged gross negligence and abusive conduct (notably undertakings ESB-24 and ESB-25), were never produced.
On 10 January 2025, Excavation filed a notice of bankruptcy. In May 2025, the trustee in bankruptcy (Ginsberg, Gingras & associés) and the other plaintiffs filed notices of discontinuance, effectively withdrawing the main action. The defendants, in turn, discontinued their warranty claim against Denise Leblanc but pursued a separate motion for declaration of abuse of process and recovery of their legal fees, filed in July 2025.

Nature of the plaintiffs’ claims and lack of legal interest for most companies

Substantively, the plaintiffs alleged that Simcotal and Simard’s “gross negligence” and “abuse of rights” in managing the companies’ finances had triggered substantial tax assessments, penalties, interests, and a massive loss of corporate value. They claimed, in round figures, $200,000 for tax-related amounts, $250,000 for accounting reconstruction, $5,000,000 for loss of business value or revenue, and $100,000 for Boudreau’s personal inconvenience and distress.
Crucially, the court examined whether each corporate plaintiff actually had the legal interest and factual foundation to sue. The written services contract P-4 was between Simcotal and Excavation alone. There was no contract or concrete evidence tying Simcotal/Simard to 5456, 8017, Transport or, during the P-4 period, Services Forestiers.
For 5456, the judgment notes that the company is essentially absent from the factual allegations and documentary record. For 8017 and Transport, the only mention was a vague assertion of “irregular bank transactions” in those entities, with no specific allegation that the defendants had made or ordered those transfers or any proof of loss. Transport had essentially ceased operations before Simard’s arrival, and 8017 was “practically inactive” or a shell.
As for Services Forestiers, the plaintiffs relied on the July 2023 Revenue Québec authorization and on federal and provincial tax notices for 2022 and 2023. The court found that these documents did not establish that Simard had a mandate or was responsible for those fiscal defaults—especially as some notices related to periods when she demonstrably was not acting for that company and as there was no evidence of a federal authorization comparable to the Québec one.

Findings on the management mandate and alleged faults

The court accepted that Simcotal’s mandate under P-4 was limited to Excavation and ended by December 2022. It rejected the plaintiffs’ theory that this mandate had informally expanded to all companies. The Revenue Québec authorizations were interpreted as allowing Simard to act on behalf of those companies in dealings with that authority if she chose, not as obliging her to manage their affairs or assuming responsibility for all their fiscal history.
The evidence also showed that Simard’s work fell within classic restructuring efforts: negotiating with creditors, stabilizing urgent obligations and producing internal financial statements. Excavation’s own financial statements revealed fluctuating performance, with both significant losses and profits during the years in question. Against this background, the plaintiffs never identified concrete acts or omissions by Simard or Simcotal that could be causally linked to a specific, proven loss, much less the $5 million claimed for loss of value.
In the end, the court concluded that four of the plaintiff companies (5456, 8017, Transport and Services Forestiers) did not have the required legal interest to sue the defendants, and that even Excavation’s claim, while not entirely devoid of theoretical foundation, was vastly inflated and unsupported by evidence of specific actionable faults.

Abuse of process and procedural misconduct

Beyond the weakness of the underlying claim, the decisive issue was whether the plaintiffs’ conduct amounted to an abuse of procedure under article 51 of the Code of Civil Procedure. The court applied established Québec case law on abusive proceedings, emphasizing that abuse can exist even without bad faith where a party acts with temerity, exaggeration, or clear disregard for procedural rules and court orders.
Several behaviours were singled out:

• Serving a multi-million-dollar claim just before Christmas without prescription pressure, seen as aimed at spoiling Simard’s holiday period.
• Including false or misleading allegations in the pleadings, such as stating that a general power of attorney had been granted by Services Forestiers to Simcotal when it had in fact been granted to Leblanc.
• Systematically failing to honor undertakings and a clear production order of the Superior Court, despite repeated reminders and a generous deadline.
• Replacing an entire block of previously filed documents in April 2025, months after the initial production, with altered versions (including added or modified signatures), without any notation that they differed from the originals.
• Persisting with the action for more than a year and a half before finally discontinuing, even though the proof of fault and causation was never properly articulated or documented.
  The court also highlighted credibility problems with Boudreau, including a written statement to Revenue Québec in which he claimed to be on complete work stoppage, contradicted by an employment record showing he was working for another employer during much of the same period.

Court’s conclusion on abuse

The judge acknowledged that the threshold for declaring a proceeding abusive must remain high, in order not to chill legitimate access to justice. However, he found that this case clearly crossed the line. The combination of a legally and factually unsupported multi-plaintiff claim, the absence of legal interest for four companies, the inflated quantum of damages, the misleading allegations, and the serious procedural breaches together constituted both substantive and procedural abuse.
Initially, an “abuse on the merits” might have been confined to the portions relating to companies that lacked standing, but the way the litigation was conducted—especially non-compliance with undertakings and court orders, alteration of exhibits, and strategic timing of service—transformed it into a broader abuse of process. The court therefore declared the modified introductory motion and the plaintiffs’ overall conduct abusive within the meaning of article 51 C.p.c.

Sanctions, personal liability and outcome

Once the proceeding was found abusive, the defendants were entitled under the Code of Civil Procedure to seek compensation for the prejudice suffered, notably their legal fees and disbursements. They filed an account of fees totaling $58,854.21. The judge found this amount generally reasonable but removed $1,186.25 corresponding to work performed for the benefit of a third party, Mr. Stéphane Di Tullio, who was not part of the case.
The defendants also asked that the “corporate veil” be lifted so that Boudreau would be personally condemned to pay their fees. The court considered it unnecessary to pierce the corporate veil because article 56 C.p.c. already allows the personal condemnation of directors and officers who participate in an abusive proceeding. Given Boudreau’s central role as directing mind and decision-maker for the plaintiff companies, the court ordered that he personally pay the defendants’ recoverable extrajudicial fees.
The defendants further sought punitive damages based on alleged intentional harm to Simard’s dignity, honour and reputation (by reference to the Québec Charter of Human Rights and Freedoms). However, this punitive claim was not properly pleaded in the original abuse motion or in any amended procedural act. It was raised only in written submissions at the end of the case. Because courts cannot grant more than what is requested in the formal conclusions, and no formal amendment was sought, the judge refused to entertain the punitive claim and dismissed it on procedural grounds.
In the result, the successful parties are the defendants, Simcotal inc. and Chantal Simard. The court partly granted their motion, declared the plaintiffs’ action and conduct abusive, and ordered Boudreau personally to pay them $57,667.96 in extrajudicial legal fees, together with court costs. The judgment does not quantify the costs beyond this figure, so the only clear monetary award in favour of the successful parties is $57,667.96 plus unspecified judicial costs.