Executive Summary: Key Legal and Evidentiary Issues

• Caisse Desjardins du Domaine-du-Roy filed a collection action against Multi Y.D.R. inc. and Christian Girard for amounts owing under two loan agreements and two suretyships.
• A default judgment was rendered by the special clerk on April 16, 2026, without knowledge of the defendants' pending motion to be relieved of their default, the filed response, or the signed case protocol.
• Defendants sought retraction of the default judgment, citing the administrative error and arguing they were not at fault for the circumstances that led to it.
• Christian Girard invoked significant health issues since July 31, 2025, supported by a medical note dated March 31, 2026, as context for the default in responding.
• Three defenses were raised: a substantial payment toward the amounts claimed, an insurance policy allegedly covering the debt, and Girard's personal denial of having stood as surety.
• The court found that refusing retraction in these circumstances would bring the administration of justice into disrepute, particularly given the plaintiff's prior agreement not to oppose the defendants' relief from default.

Facts of the case

On December 12, 2025, Caisse Desjardins du Domaine-du-Roy (the "Caisse") served a collection action against Multi Y.D.R. inc. ("Multi inc.") and Christian Girard ("Girard"), seeking to have them jointly and severally condemned to pay three amounts: $93,302.75 under a variable line of credit granted to Multi inc. on June 13, 2018, bearing interest at the Fédération des Caisses Desjardins du Québec's prime rate plus 3% per year; $29,439.05 under a loan granted to Multi inc. on January 5, 2024, bearing interest at 10.5% per year; and $1,157.25 relating to an unauthorized bank account overdraft. These claims were supported by two contractual agreements and two suretyships allegedly signed by Girard personally. Service was effected by bailiff Olivier Gagnon, who personally served Girard both as an individual and as administrator of Multi inc. at the company's registered office.

Procedural background and the default judgment

On January 7, 2026, the Caisse filed a motion for a default judgment for failure to respond to the summons. On February 26, 2026, counsel for the defendants — Simard Boivin Lemieux S.E.N.C.R.L. — filed a response indicating their intention to contest the claim and establish a case protocol. On April 7, 2026, the defendants notified the Caisse's counsel of a motion to be relieved of their default, citing Girard's sole and exclusive role as director and shareholder of Multi inc. and serious health problems he had been experiencing since July 31, 2025, which had affected his cognitive capacities. A medical note dated March 31, 2026 confirming his incapacity to work since July 31, 2025 was filed in support. On April 14, 2026, both parties' counsel signed a case management protocol under which the Caisse agreed not to oppose the defendants' relief from default, and the defendants were granted until May 22, 2026 to file their defense by summary statement. Unaware of these developments — including the February 26 filed response, the April 7 motion to be relieved of default, and the April 14 signed protocol — the special clerk signed a default judgment on April 16, 2026. The following day, April 17, 2026, the parties appeared before the Honourable Justice Maxime Roy, who noted the absence of opposition from the Caisse, confirmed the signed protocol, and granted the defendants relief from default. Justice Roy gave the parties 30 days to obtain instructions from their respective clients regarding the default judgment and suspended the protocol deadlines. The court also noted that the April 16 judgment had not yet been entered in the court register as of the date of the hearing.

Contractual provisions and procedural rules at issue

The substantive claims arose from two loan instruments — a variable line of credit and a term loan — along with two personal suretyships and an unauthorized overdraft. At the procedural level, the court's analysis centered on Articles 345 to 348 of the Code of Civil Procedure (C.p.c.), which govern retraction of judgment. Article 346 provides that a party condemned by default may seek retraction if it was prevented from defending itself by fraud, surprise, or another cause deemed sufficient. Article 345 also permits retraction where maintaining the judgment would bring the administration of justice into disrepute. Article 347 sets out strict time limits: the motion must be served within 30 days of the disappearance of the cause preventing the party from defending, and presented to the court within 30 days of service; it cannot be filed more than six months after the judgment. The Caisse conceded that the Article 347 timing requirements were met. Article 348 provides that, if the ground is found sufficient, the parties are restored to their prior positions and execution of the judgment is suspended.

Court's reasoning and analysis

The court found that the default judgment was rendered entirely without fault on the part of the defendants. Both parties had already reached a prior agreement allowing the defendants to file a defense, a case protocol had been duly signed, and the defendants' motion to be relieved of default had been properly filed — none of which had been brought to the special clerk's attention before he rendered judgment on April 16, 2026. Drawing on Construction Genfort ltée c. Commission scolaire de Laval, 2016 QCCS 6098, the court affirmed that a party cannot be deprived of its right to a full defense in the absence of any fault on its part. The court further held that allowing the Caisse to benefit from what was, in effect, an administrative processing error — particularly after having consented to the defendants' relief from default — would itself bring the administration of justice into disrepute and reflect a lack of the good-faith collaboration required of litigants under Articles 19 and 20 of the C.p.c. The defendants' proposed defenses — a substantial payment toward the claimed amounts, the existence of an insurance policy allegedly covering the debt, and Girard's personal denial of the suretyships — were found not to be prima facie unreasonable.

Ruling and outcome

The court granted the defendants' motion for retraction. The default judgment rendered by the special clerk on April 16, 2026 was set aside, the parties were restored to their prior positions, and they were given until June 4, 2026 to file a revised case protocol if necessary. The question of compensatory damages against the Caisse for allegedly abusive procedural conduct — specifically its refusal to file a discontinuance despite having agreed not to oppose the defendants' relief from default — was deferred to the trial judge pursuant to Article 342 C.p.c. Costs were awarded against the Caisse. The defendants, Multi Y.D.R. inc. and Christian Girard, were the successful parties. No specific monetary amount was awarded in the retraction judgment itself; the matter was remitted for trial on the merits.