Executive Summary: Key Legal and Evidentiary Issues

• The central dispute concerned whether the 45-day deadline under article 2(g) of the settlement agreement ran from the date of mutual consent (January 20, 2026) or from the date the defendant physically signed the document (March 23, 2026).
• Contractual interpretation principles required the court to apply the plain meaning of the phrase "following the signing of the present," which the tribunal found unambiguously referred to the moment all parties had affixed their signatures.
• A $2,000.00 penalty clause under article 2(h) was claimed by the plaintiff on the basis that the defendant had breached the 45-day obligation, a claim contingent on resolution of the signature-date issue.
• Valentin Leveneur also sought $1,648.46 in extrajudicial costs, alleging that the defendant's delay in signing constituted an abuse of right or procedural abuse under articles 51, 54, and 342 of the Code of Civil Procedure.
• Evidence showed the defendant's delay stemmed from the need to secure a third-party buyer willing to purchase the vehicle for parts — a condition consistent with the very purpose of the settlement — and was not attributable to bad faith or dilatory conduct.
• Neither abuse of right nor any serious procedural misconduct was established, and the court exercised its discretion to award no costs to either party given the particular circumstances of the case.

Facts of the case

The underlying dispute involved the cancellation of a vehicle sale between Valentin Leveneur (the plaintiff) and 9223-8641 Québec inc., operating as Auto 360 Estrie (the defendant). On the eve of a hearing on the merits scheduled for January 21, 2026, the parties began settlement negotiations. By January 20, 2026, they had agreed on the essential terms of a settlement, and on January 21, 2026 — the originally scheduled trial date — the plaintiff signed the transaction document and transmitted the vehicle transfer documents to the defendant's counsel. The defendant, however, did not immediately sign. Over the following weeks, the plaintiff's counsel made repeated written and verbal follow-ups. The defendant attributed the delay to its need to find a buyer willing to acquire the vehicle for parts, as the settlement required the vehicle to be kept off the road. On March 23, 2026, the defendant's counsel transmitted the transaction signed by the defendant, identifying Rivard Mécanique inc. as the prospective purchaser. The transaction was homologated by the court on March 24, 2026. The sale to Rivard Mécanique inc. was only finalized on April 27, 2026 due to delays beyond the defendant's control. A contested hearing was held on May 5, 2026 to address the plaintiff's remaining claims.

Policy terms and contractual clauses at issue

The core clauses at issue were articles 2(g) and 2(h) of the settlement agreement. Article 2(g) required the defendant to provide proof that the vehicle — which could not be sold for road use in its current state — had been sold for parts and/or sent to a scrapyard "within 45 days following the signing of the present." Article 2(h) established a penalty clause: should the defendant fail to meet the obligation under article 2(g) within the stipulated period, it would owe the plaintiff a sum of $2,000.00. The dispute turned on the meaning of the phrase "following the signing of the present" — whether it referred to the formation of the agreement on January 20, 2026, or to the moment the defendant affixed its physical signature on March 23, 2026.

Court's reasoning and analysis

The court began by confirming that, under article 1378 of the Civil Code of Québec, a contract is formed upon the exchange of consent, and that the essential elements of the transaction were indeed in place as of January 20, 2026. However, the tribunal distinguished between the formation of a contract and the moment its obligations become enforceable, emphasizing that parties may validly agree that certain obligations become due only upon a subsequent event. Applying plain-meaning contractual interpretation principles from Uniprix inc. c. Gestion Gosselin et Bérubé inc., 2017 CSC 43, the court found the phrase "following the signing of the present" to be unambiguous: it referred to the moment all parties had physically signed the document, not to the earlier exchange of consent. The court reinforced this reading by noting that elsewhere in the same transaction — specifically at articles 2(a) and 2(b) — the parties had fixed specific calendar dates for other obligations, demonstrating a deliberate drafting choice to tie article 2(g)'s deadline to a different, event-based trigger. Penalty clauses, the court further noted, must be interpreted restrictively and must not be abusive, citing Raymond Bouchard Excavation inc. c. Immobilier Apenimon inc., 2026 QCCS 388. Since the 45-day period began running only on March 23, 2026, the penalty under article 2(h) had not yet been triggered at the time of the hearing.

On the abuse of right and procedural abuse claims, the court referenced Vézina c. Décor L.I. 2010 inc., 2026 QCCQ 1630, for the proposition that the threshold for finding an abuse remains high so as not to impede access to justice. The defendant's uncontradicted sworn declaration explained that it had actively sought a parts buyer since January 2026, that Rivard Mécanique inc. had inspected the vehicle following its towing on January 19, 2026, and that the buyer only confirmed its intention to purchase on March 23, 2026. The court found these explanations coherent with the objective of the settlement and concluded that the delay was attributable to the intervention of a third party beyond the defendant's control — not to any dilatory manoeuvre, unreasonable exercise of rights, or intent to harm the plaintiff. A disagreement over the interpretation or execution of a settlement, even one causing delays or additional steps, does not on its own constitute abuse of right or procedure.

Ruling and outcome

The court, presided over by the Honourable Éric Martel, J.C.Q., dismissed all of the plaintiff's claims. Both the application of the $2,000.00 penalty clause under article 2(h) and the claim for $1,648.46 in extrajudicial costs were rejected. Noting the particular circumstances of the case — including the existence of a homologated settlement, the residual nature of the remaining dispute, and the absence of bad faith or abusive conduct on either side — the court exercised its discretion under article 340 of the Code of Civil Procedure and issued the judgment without costs. The defendant, 9223-8641 Québec inc. (Auto 360 Estrie), was the successful party; no monetary award was granted to either side.