Executive Summary: Key Legal and Evidentiary Issues

• Sylvie Mongrain, a 20% minority shareholder and director of Ferme La Survenance, brought an oppression remedy under Article 450 of Quebec's Loi sur les sociétés par actions against co-shareholder and former partner Yves Vachon.
• Central to the dispute is Vachon's pattern of unilateral corporate decisions — including unauthorized equipment purchases, personal use of the Farm's credit card, and opening a bank account at Banque Scotia without Mongrain's knowledge or consent.
• Financial urgency arose from two notices of default issued by Banque Nationale (July 17, 2024 and February 17, 2025), a subsequent demand for approximately $750,000, and the imminent expiry of a six-month grace period.
• At stake was the Farm's milk quota, valued at $1,451,520 on the Farm's balance sheet as of April 29, 2026, which Banque Nationale held as collateral and threatened to seize.
• Mongrain also sought provisional orders for personal protection, citing a history of physical and psychological violence by Vachon, including two incidents of confinement on the farm in August 2022 and on August 2, 2023.
• The court applied the four-part test for provisional injunctive relief — prima facie right, serious or irreparable harm, balance of inconvenience, and urgency — under Article 511 of the Code of Civil Procedure.

Facts of the case

Sylvie Mongrain and Yves Vachon were partners for nearly 39 years without being married and separated in 2021. Together, they are shareholders and directors of two agricultural companies: Ferme La Survenance (the Farm), a dairy cattle, milk production, and large-scale crop operation, and 9466-0123 Québec inc. (the Society), whose mandate is to carry out seeding on the Farm's lands. In the Farm, Mongrain holds 20% of the shares and Vachon holds 80%; both are directors. In the Society, Mongrain holds 29%, Vachon 51%, and their son Yanik 20%, with Mongrain and Yanik serving as the sole directors. No shareholder agreement governs either company.

From the outset of both businesses, Mongrain handled all financial management — paying invoices, bookkeeping, managing suppliers, and payroll. Vachon's contribution was limited to fieldwork during seeding and harvesting and manure spreading, while Yanik handled all animal-related tasks including milking the cows twice daily. Vachon was the Farm's sole authorized representative with Agropur for transactions, while Mongrain held that role with the Fédération des producteurs de lait du Québec.

Since the parties' separation, Vachon has continued to reside in the Farm's property, with all associated costs — electricity, taxes, insurance, and maintenance — borne by the Farm. Mongrain recorded monthly rental amounts in the books as a deduction from amounts owed by the Farm to Vachon. Separately, Mongrain documented a prolonged history of physical and psychological violence by Vachon dating from 2018. She filed a criminal complaint against him in July 2019, which she later withdrew after Vachon entered into an undertaking under Article 810 of the Criminal Code. He breached that undertaking, but Mongrain did not file a new complaint. She left Vachon definitively in February 2021, initially residing in a shelter for victims of domestic violence. In April 2021, Vachon attended the shelter and struck the building. On two occasions — in August 2022 and on August 2, 2023 — Vachon confined Mongrain on the farm while she was there to retrieve her belongings or work; she did not return to the farm or the fields after the second incident.

Contractual and corporate governance issues

No shareholder agreement governed the rights and obligations of the parties in either company. Given that both parties were the only two directors of the Farm, board-level decisions required unanimous consent. Despite this, Vachon repeatedly acted unilaterally. He purchased equipment for the Farm without Mongrain's consent; in 2020, he personally acquired three pieces of equipment (a truck, an excavator, and a skid steer) and leased them back to the Farm over Mongrain's objection, at costs she considered excessive relative to their purchase price. He transferred two trailers owned by the Farm into his name at values far below their actual worth, causing a financial loss to the Farm. He used the Farm's credit card for personal expenses — documented from 2020 through March 2026 — despite Mongrain's repeated objections. In June 2025, he drew a cheque from the Farm for $13,450.08 to pay himself for equipment rental despite Mongrain's refusal, given outstanding payments in circulation; the cheque was returned for insufficient funds. He also, without informing Mongrain, opened a bank account in the Farm's name at Banque Scotia de New Liskeard of which he was the sole signatory, and initiated financing discussions with that institution — steps Mongrain only learned of after the fact and formally objected to by demand letter dated May 12, 2026.

On the crop side, Mongrain had clearly communicated her opposition to seeding in 2026, citing non-profitability — the Society recorded a deficit in 2025, and negligible profits of $445 in 2023 and $1,098 in 2024. Despite this, Vachon approached another supplier for seeds and fertilizers and had fuel delivered to the Farm without her consent.

Court's reasoning and analysis

The court evaluated Mongrain's application for provisional orders in two groups: (1) Farm management and asset sales, and (2) personal protection.

On the question of a prima facie right, the court found that the evidence established a reasonable possibility of success on the merits of the oppression claim. Because the Farm's board decisions required unanimity, Vachon's repeated unilateral acts — equipment acquisitions, personal use of Farm funds, the unauthorized Scotia bank account, and continued seeding attempts over Mongrain's objection — frustrated her reasonable expectations as a minority shareholder and director, and harmed both her interests and those of the Farm. The court noted that the opening of a bank account and the pursuit of financing are significant corporate acts that affect shareholders' equity, and that Vachon undertook these without Mongrain's knowledge or consent.

On urgency, the court acknowledged that many of Vachon's problematic acts had persisted for years while Mongrain did not take legal action to assert her shareholder rights. Standing alone, that history would not have satisfied the requirement of immediate and apparent urgency. However, the court found urgency in the combination of Banque Nationale's enforcement proceedings and the imminent expiry of the six-month grace period. The mediation process under the Loi sur la médiation en matière d'endettement agricole had ended on October 27, 2025 due to Vachon's lack of cooperation, lifting the stay on creditor proceedings. On November 14 and 20, 2025, Banque Nationale sent a notice of enforcement and a formal demand to the Farm for the amounts owing — approximately $750,000 — holding the milk quota as collateral. A six-month grace period followed, but no alternative financing was secured. With the grace period about to expire, the court found that selling the milk quota — valued at $1,451,520 on the Farm's April 29, 2026 balance sheet — was the only reasonable solution to repay the bank and avoid seizure of the Farm's primary asset.

The court also recognized that authorizing an asset sale at the provisional stage goes beyond the normally conservatory character of a safeguard order, but relied on prior jurisprudence acknowledging that in special circumstances, preventive intervention is permissible even where the consequences are irreversible.

On the balance of inconvenience, the court found it clearly favored Mongrain and the Farm. Even Vachon would benefit, as the sale of the quota would allow repayment of the bank debt and avoid the more severe consequences of a forced realization of guarantees — notably, the court pointed out that Vachon himself had proposed selling the quota less than a month before the hearing.

Regarding personal protection, while the court found a prima facie right based on Mongrain's fundamental rights to safety and personal integrity under Article 1 of the Charte des droits et libertés de la personne and Article 10 of the Civil Code of Québec, it declined to grant the requested orders because the urgency criterion was not met — the most recent incidents of violence dated back several years and were not contemporaneous.

On the request for a provisional legal cost provision of $25,000, the court declined at this stage. While the claim appeared reasonably founded and Mongrain's gross annual income was approximately $45,200, she had not produced sufficient evidence regarding her assets, investments, and financial obligations to satisfy the cumulative third criterion under Article 443 of the Loi sur les sociétés par actions — that without the provision, the claim could not be brought or maintained. The Farm's financial situation also did not clearly support its capacity to bear such costs, given its liquidity constraints.

Ruling and overall outcome

The court partially granted Mongrain's application for provisional measures, issuing a safeguard order to remain in effect until October 30, 2026, the date fixed for the interlocutory injunction hearing. Mongrain was the successful party on the Farm management and asset sale issues. The court ordered that she alone would have the authority to: collect all amounts owed to the Farm; sell all or part of the Farm's milk quota to repay Banque Nationale; apply the proceeds of that sale to amounts owed to Banque Nationale in capital, interest, and fees secured by the quota; and apply the remaining proceeds to the Farm's credit line and credit card balances with Banque Nationale. Vachon was prohibited from presenting himself as a representative or director of the Farm to suppliers and creditors, from communicating with Farm suppliers and creditors, from accessing or using any Farm bank account, and from purchasing seeds, fertilizers, or soil stabilization products for the 2026 growing season. A blanket prohibition on any seeding on the Farm's agricultural lands for the 2026 season was also issued. Mongrain was exempted from providing security for costs pursuant to Article 442 of the Loi sur les sociétés par actions. No specific monetary award was ordered in Mongrain's favor; costs were reserved to follow.