Executive Summary: Key Legal and Evidentiary Issues

• The central issue is whether the plaintiffs' damages claim, filed on June 17, 2024, was prescribed under the three-year limitation period in Article 2925 C.c.Q.
• By September 11, 2019, the plaintiffs had sufficient knowledge of the alleged faults, the resulting prejudice, and the causal link between them to commence a damages action.
• Contrary to the plaintiffs' argument, the rejection of their title transfer action by Justice Buchholz in November 2023 did not give rise to their right of action — the alleged damages existed independently of that outcome.
• Under Article 2894 C.c.Q., the interruption of prescription produced by the earlier title transfer action was retroactively annulled when that action was dismissed.
• The "reservation of rights" in the Buchholz judgment had no legal effect on the prescription period, as such reservations neither interrupt prescription nor create new rights.
• Article 2895 C.c.Q. provided no relief to the plaintiffs, as they failed to institute their damages claim within the three-month grace period following the Buchholz judgment.

Facts of the case

In September 2018, plaintiff Moïse Chokron signed a promise to purchase a seniors' residence known as the "Manoir King David" for $11.5 million. The promise was signed by defendant 3381188 Canada inc. ("Canada inc."), which was registered as the property owner but was identified in the document as acting solely as a bare trustee for the property's real owners. Over subsequent months, the purchase price was reduced to $9.5 million, and Moïse Chokron's rights under the promise were assigned to his children Claudia, Valérie, and Benjamin Chokron, who in turn transferred them to the plaintiff corporation 9402-6598 Québec inc.

The plaintiffs allege they were not informed at the outset that the property was in fact co-owned by five individuals under an indivision agreement, and that Canada inc. was acting as their nominee. They say they only learned of the true ownership structure in May 2019, when defendant Thomas Marcantonio — president of Canada inc. and their main negotiating counterpart — required that the promise be made subject to the consent of all co-owners ("subject to the consent of all partners"). Shortly thereafter, Marcantonio informed them that one co-owner was opposed to the sale, rendering the promise of purchase null. He later reassured them that a solution had been found. The plaintiffs were subsequently advised directly by co-owner Josie Solito that she opposed the sale and that the indivision agreement required the unanimous consent of all co-owners.

Despite Solito's opposition, Marcantonio again assured the plaintiffs that a corporate resolution would authorize him to sign the deed of sale on behalf of Canada inc. Acting on this assurance, the plaintiffs deposited just over $9.5 million with the notary to cover the purchase price, plus $200,000 for adjustments. On September 11, 2019 — the scheduled signing date — Solito and her ex-husband Alfonso Graceffa refused to sign. The sale did not proceed.

Contractual clauses and legal framework at issue

The indivision agreement governing the co-ownership required the unanimous consent of all co-owners for the property to be sold. This requirement became central to all subsequent proceedings. The promise to purchase, as amended in May 2019, was expressly made conditional on the consent of all partners. The plaintiffs later argued that Marcantonio had misrepresented his authority and had concealed the true ownership structure and Solito's opposition from them.

The defendants invoked Article 2925 C.c.Q., which provides a three-year prescriptive period for personal actions. The plaintiffs, in turn, relied on Articles 2892 and 2903 C.c.Q. regarding the interruption and resumption of prescription, and on Article 2895 C.c.Q., which provides a three-month grace period where a claim is dismissed without a decision on the merits.

Reasoning and analysis

On October 24, 2019, the plaintiffs filed a title transfer action against Canada inc., Solito, and Graceffa. That action was dismissed on November 2, 2023 by Justice Buchholz (the "Buchholz judgment"), who found that Solito and Graceffa had never consented to the sale and were not obligated to sign the deed. The Buchholz judgment noted that the plaintiffs had contractually agreed that the unanimous consent of all co-owners was required, and that Marcantonio's claim to sign alone was untenable under both the indivision agreement and the Canada Business Corporations Act. The Buchholz judgment reserved the plaintiffs' right to claim damages but offered no reasoning for doing so.

On June 17, 2024 — more than seven months after the Buchholz judgment — the plaintiffs commenced the present damages action against Canada inc., Marcantonio, and defendant Donald Kattan. Their total claim was just over $1 million, comprising $790,667 in lost interest on the funds held in trust, $104,800 in extrajudicial legal fees incurred in the title transfer proceedings, $60,000 in moral damages for frustration and inconvenience (allocated at $15,000 each to the four individual plaintiffs), and $50,000 for anticipated legal fees in the present proceeding. The defendants filed motions to dismiss on grounds of prescription.

The court rejected the plaintiffs' argument that their right of action only arose upon the dismissal of the title transfer claim in November 2023. Justice Ferland found that the damages claimed — lost interest, extrajudicial fees, and moral damages — had materialized independently of the outcome of that earlier action. These were not losses contingent on the failure to obtain title; they were losses that had already begun accruing before the title transfer action was even filed, and could have been claimed concurrently with it. The court distinguished the present case from prior Court of Appeal decisions where the existence of damages was genuinely dependent on the success of an antecedent proceeding. Here, no such dependency existed.

The court also found that by September 11, 2019, the plaintiffs had sufficient knowledge of the alleged faults, the prejudice, and the causal link to have commenced a damages claim. They knew of the indivision agreement, the identity of the co-owners (including Marcantonio and Kattan), Solito's opposition, and the misrepresentations that had been made to them. Accounting for the 169-day suspension of prescriptive periods related to the COVID-19 pandemic, the three-year period under Article 2925 C.c.Q. expired at the latest on February 27, 2023 — well before the June 17, 2024 filing.

On the interruption of prescription, the court held that because the title transfer action was dismissed, its interruption effect was retroactively nullified under Article 2894 C.c.Q., as though the action had never been filed. The court further held that the "reservation of rights" in the Buchholz judgment had no effect on prescription — established Court of Appeal jurisprudence confirms that such reservations neither interrupt prescription nor create rights that did not already exist. Finally, the court found that Article 2895 C.c.Q. did not assist the plaintiffs: even if applicable, they had filed their damages claim seven months after the Buchholz judgment, well outside the three-month grace period that provision affords.

Ruling and outcome

Justice Ferland granted both motions to dismiss filed by the defendants. The motion filed by Thomas Marcantonio (dated November 27, 2024) and the motion filed by 3381188 Canada inc. and Donald Kattan (dated December 9, 2024) were both granted. The plaintiffs' originating demand dated June 17, 2024 was dismissed in its entirety, with costs. No monetary award was made in the plaintiffs' favour; the defendants were the successful parties. The judgment does not specify the total amount of costs awarded to the defendants.