Executive Summary: Key Legal and Evidentiary Issues

• The court considered whether a seller may contractually reserve the right to refuse a buyer's chosen pre-purchase inspector.
• Evidence showed that none of the purchase promises actually introduced in evidence contained the disputed clause.
• Desjardins argued the practice was lawful under the principle of freedom of contract under article 9 C.c.Q.
• Inspro's damages claim relied on the theory of contractual interference, citing the Costco decision.
• Proof did not establish that Desjardins knew of any contractual relationship between Inspro and the buyers who cancelled their inspection contracts.
• Judgment ultimately dismissed the damages claim, the counterclaim for abuse of process, and the warranty claim against the insurer FARCIQ.

Facts of the case

Inspro (9415-0174 Québec inc.) operates a business specializing in pre-purchase building inspections. Denis Desjardins and his company, 9294-2689 Québec inc., act as real estate brokers operating under the Proprio Direct banner, as part of a group of brokers known as "l'Équipe 551-2121." Inspro alleged that Desjardins required buyers to select an inspector from a list of five "recommended" inspectors, and that Inspro was not on that list. Inspro claimed this practice caused it to lose numerous inspection mandates, resulting in significant damages, including lost profits, lost business opportunities, abandoned expansion plans, and advertising costs incurred to counter Desjardins's conduct. Inspro sought a permanent injunction prohibiting Desjardins from including a clause in purchase offers allowing sellers to refuse a buyer's chosen inspector. Desjardins contested the claim, asserting that nothing prohibits a seller from refusing a buyer's chosen inspector and that the practice, although new, was not directed at Inspro. Desjardins also filed a counterclaim alleging that Inspro's lawsuit was abusive, and called upon its professional liability insurer, FARCIQ, in warranty for the damages portion of the claim. FARCIQ contested coverage and argued the damages claim itself was unfounded.

Policy terms and contractual clauses at issue

The clause Desjardins sought to use stated that the seller "se réserve le droit d'accepter ou non l'inspecteur choisi par l'acheteur" (reserves the right to accept or refuse the inspector chosen by the buyer). The court noted this clause did not reference any list limiting the buyer's choice and did not limit how many times the seller could refuse the buyer's choice. Section 8 of the mandatory Promise to Purchase (PA) form, titled "Inspection by a person designated by the buyer," allows the buyer to make the purchase conditional on an inspection. Article 8.1 of the PA provides that if the inspection reveals factors significantly diminishing the property's value or increasing expenses, the buyer must notify the seller in writing within four days of the inspection deadline, or the condition is deemed waived. The court found that none of the promises introduced in evidence included any clause allowing the seller to refuse the buyer's chosen inspector, and no counter-proposal form from sellers proposed adding the disputed clause or referenced the list of recommended inspectors.

Reasoning and analysis

The court analyzed the claim in two parts: the legality of including the disputed clause prospectively, and the damages claim tied to past conduct. On legality, the court held that freedom of contract under article 9 C.c.Q. permits a seller to propose, through negotiation, a clause reserving the right to refuse a buyer's chosen inspector, since nothing obliges the buyer to accept such a counter-proposal and the seller retains rights as property owner. However, the court identified a potential issue under article 1500 C.c.Q. and the good-faith obligations in articles 7 and 1375 C.c.Q.: because the clause, as proposed, contained no deadline for the seller to communicate a refusal, it could leave the buyer unable to secure a new inspector within the original inspection period. On the damages claim, the court found that the disputed clause was never actually incorporated into any promise to purchase entered into evidence, meaning no buyer was legally obligated to comply with a seller's refusal of their chosen inspector. Drawing on the Costco decision (Costco Wholesale Canada Ltd. c. Simms Sigal & Co. Ltd., 2020 QCCA 1331), the court noted that a finding of third-party interference requires knowledge of the contractual rights at issue, inducement or participation in their breach, and bad faith or disregard for another's interests. The evidence did not establish that Desjardins knew of any specific contractual relationship between Inspro and the buyers in question, and the buyers' voluntary decisions to comply with the sellers' requests broke any chain of causation between Desjardins's conduct and Inspro's alleged losses.

Ruling and overall outcome

The court partially granted Inspro's application, issuing a declaratory judgment that Desjardins may propose to sellers a clause allowing them to refuse a buyer's chosen pre-purchase inspector, provided that the clause specifies that the inspection deadline restarts for its original duration once the buyer receives the seller's refusal; the court prohibited Desjardins from proposing any version of the clause that omits this delay extension. All of Inspro's other claims, including its claim for damages, were dismissed, as the court found no basis in contractual interference or extracontractual fault. Desjardins's counterclaim alleging abuse of process was also dismissed, as the court found Inspro's claims raised serious, non-frivolous questions. Because the damages claim against Desjardins was dismissed, the warranty claim against FARCIQ became moot and was likewise dismissed. The court ordered that no party bear the judicial costs of the principal demand, the counterclaim, or the warranty demand.