Executive Summary: Key Legal and Evidentiary Issues

• The central issue is whether the defendant met the conditions required under Articles 346–348 of the Code of Civil Procedure to obtain retraction of a default judgment rendered against it on 4 September 2025.
• At stake is the resolution of a real property sale concluded on 15 August 2018, with an outstanding balance of price of sale secured by a hypothec registered by the plaintiffs.
• Timeliness of the retraction application was satisfied, as it was served on 14 October 2025, within the 30-day period following the defendant's acknowledgment of the judgment.
• Insufficient grounds for retraction were found, as the defendant's representative failed to follow up on the served originating application despite having prior notice of impending legal proceedings and receiving a confirming email on 25 August 2025.
• Evidentiary concerns arose regarding the defendant's financial capacity to pay the outstanding balance, given its history of payment defaults, unpaid property taxes, and multiple legal proceedings involving related entities.
• Granting retraction would have caused prejudice to the plaintiffs, who had already carried out and paid for significant repair works on the property following their recovery of possession.

Facts of the case

On 15 August 2018, 9165-3063 Québec inc. (the defendant) purchased an immovable property located at 910, 14e avenue, La Guadeloupe, Québec, lot number 5666252 (the "Property") from the plaintiffs — 9181-8278 Québec inc., Garage GBL inc., and Gerry Bilodeau. A balance of the sale price of $60,000 was agreed upon, secured by a hypothec registered by the plaintiffs. The defendant made two payments of $20,000 each toward that balance; the plaintiffs subsequently collected rental income from a rental unit on the Property and applied those amounts toward the remaining balance owed. By 12 October 2023, the plaintiffs placed the defendant in default by registered mail, demanding payment of the outstanding sum of $26,220.90. The defendant also failed to pay property taxes on the Property within the MRC de Beauce-Sartigan territory, prompting the publication of a prior notice of sale for non-payment of property taxes on 21 March 2024, with a public auction scheduled for 9 May 2024. On 6 May 2024, plaintiff Gerry Bilodeau paid the property taxes to prevent the auction. On 16 April 2024, the plaintiffs served notice withdrawing their authorization for the defendant to collect rents. On 6 January 2025, the plaintiffs served a prior notice of exercise of a resolutory clause, claiming $33,419.98 from the defendant.

Procedural background

The originating application was served personally on Martin Veilleux, as the defendant's representative, on 16 July 2025. The defendant failed to file any response before the deadline of 31 July 2025. A hearing was held on 3 September 2025 in the defendant's absence, and judgment was rendered the following day, on 4 September 2025, by the Honourable Danye Daigle, J.C.S., ordering resolution of the sale and declaring plaintiff Gerry Bilodeau the owner of the Property. Notice of judgment was issued on 9 September 2025, and the judgment was registered in the land register on 15 October 2025. The appeal period expired on 9 October 2025. The defendant's application for retraction of the default judgment was served on 14 October 2025 — after the appeal deadline had passed but within the 30-day period prescribed for retraction proceedings.

Legal framework governing retraction of judgment

The application was governed by Articles 346 to 348 of the Code of Civil Procedure, which allow a party condemned by default to seek retraction if it was prevented from defending itself by fraud, surprise, or another sufficient cause. As summarized in Constructions Stéphane Poulin inc. c. Gestion immobilière Reevac inc., 2020 QCCS 922, three cumulative conditions must be met: the application must be filed within the strict prescribed delays; the applicant must demonstrate it was prevented from defending itself by fraud, surprise, or sufficient cause; and the applicant must raise a plausible defence on the merits. The burden of proving all three conditions rests on the party seeking retraction. The court also noted, drawing on Groupe JSV inc. c. Goal Capital inc., 2014 QCCA 398, that the seriousness of the proposed defence and the rescindant (grounds for retraction) operate as communicating vessels — stronger defences lend greater plausibility to the explanation for the default.

Reasoning and analysis

The court found that while the defendant satisfied the timeliness requirement — Mr. Veilleux having acknowledged the judgment on 20 or 24 September 2025 and the retraction application having been served on 14 October 2025 within the required 30 days — it failed to meet the substantive conditions for retraction. Mr. Veilleux claimed he had mistaken the originating application for another document and had misplaced it. However, the court found these explanations unconvincing. In a sworn declaration dated 8 May 2026, Mr. Veilleux described the failure as an "inattention error," citing the frequent receipt of documents of minor importance. He acknowledged during pre-trial examination that he never reads documents immediately upon receipt from the bailiff. Critically, nothing in the evidence explained why he did not review the document once his other tasks were completed, and no steps were taken to obtain a copy of the application after it was misplaced. The court further noted that on 25 August 2025 — before the default judgment was rendered — Mr. Veilleux received, through notary Me Christine Talbot, an email from the plaintiffs' counsel expressly confirming that legal proceedings had been served on 16 July 2025 and that the matter was progressing. Despite this, Mr. Veilleux took no steps to obtain the proceedings or respond. The court held that this conduct reflected either a failure to read the email or a disregard for legal proceedings — neither of which qualifies as excusable neglect. The court also noted that the defendant had received the prior notice of exercise of a resolutory clause on 6 January 2025, and had been advised in writing on 26 March 2025 that an originating application would be served shortly. Against this background, the failure to follow up was deemed inexcusable. The court additionally found doubts about the seriousness of the defendant's proposed defences, noting that the defendant had failed to provide documentation requested by the plaintiffs' counsel to establish the balance owed, and offered the implausible excuse that those counsel's emails were falling into its spam folder. Furthermore, multiple legal proceedings involving the defendant, its representative, or entities under its control — including legal hypothecs and default judgments — cast doubt on the defendant's claimed financial capacity to pay the outstanding balance. Finally, the court found that granting retraction would not be without prejudice to the plaintiffs, who had incurred significant costs for repair works on the Property following their recovery of possession after the 4 September 2025 judgment.

Ruling and overall outcome

The court, presided over by the Honourable Marie Cossette, J.C.S., rejected the defendant's application for retraction of the default judgment and upheld the judgment of 4 September 2025 in its entirety. The plaintiffs — 9181-8278 Québec inc., Garage GBL inc., and Gerry Bilodeau — were the successful parties. The judgment confirming resolution of the sale and recognizing Gerry Bilodeau as owner of the Property was maintained. Costs were awarded against the defendant; however, no specific monetary quantum for those costs was stated in the decision.