Executive Summary: Key Legal and Evidentiary Issues

• A revocation application challenges the Demers judgment on the basis that the defendants' former lawyer's negligence deprived them of the opportunity to present a defence.

• Article 350 C.C.P. gives the court discretion to suspend execution of a judgment while a revocation application is pending, without setting fixed criteria.

• Emails dated May 6 and May 7, 2026, and a seizure carried out on April 23, 2026, undercut the defendants' claim that they only learned of the judgment on May 20, 2026.
• Timeliness under article 84 C.C.P. was disputed, since the revocation application was filed beyond both the 30-day and six-month delays.
• Diligence became a central evidentiary issue, given the gap between the April 23, 2026 seizure and the defendants' first documented contact with counsel on May 6, 2026.
• Whether the defendants' representative's limited participation at trial satisfied the right to be heard was a contested point, given his presence but restricted role before Justice Demers.

Facts of the case

On November 5, 2021, 9411-2471 Québec inc., Fiducie Familiale Frédéric Hudon 2015, Frédéric Hudon, and Immeubles Aulauflo Inc. (the Plaintiffs) sold all outstanding shares of 2951291 Canada inc. to Harmek Holdings Inc. under a Share Purchase Agreement. A balance of sale of $1,000,000 (the BOP) remained outstanding and was due on November 5, 2024. On September 19, 2025, Justice Ian Demers condemned Harmek to pay the Plaintiffs $1,000,000 plus interest and costs (the Demers judgment). Harmek separately sued the Plaintiffs seeking a price reduction for alleged breaches of the conditions of sale, but its lawyer failed to move to join that action with the Plaintiffs' claim until the eve of trial, when the motion was dismissed. Harmek's principals did not attend the September 18, 2025 trial, allegedly because they were never advised of the trial dates. At trial, Harmek's lawyer cross-examined the Plaintiffs' representative for about one minute, presented no evidence, and made no closing argument. A Notice of Judgment was sent September 22, 2025. Harmek later retained new counsel, who allegedly informed it of the judgment on May 20, 2026. By then, a seizure had already been carried out on April 23, 2026, followed by service of a Revised Notice of Execution on April 28, 2026. Emails dated May 6 and 7, 2026, show Harmek pressing its then-lawyer urgently about the bailiff and the judgment. A judicial sale of Harmek's assets was scheduled for June 17, 2026. Harmek applied to revoke the Demers judgment and, in this proceeding, asked the court only to suspend its execution pending that revocation application.

Contractual terms at issue

The dispute centres on the Share Purchase Agreement and its balance-of-sale provision. Harmek acknowledged in its own Application to Revoke the Demers judgment that a $1,000,000 balance of sale was due on November 5, 2024, but contested payment on the ground that the Plaintiffs had breached conditions of sale causing damages exceeding the BOP. The court noted this acknowledgment as significant, since it undercut Harmek's position that it had a serious defence to withhold.

Court's reasoning and analysis

The court held that, to suspend execution of a judgment under article 350 C.C.P. pending a revocation application, the application must raise a serious issue on the merits, alongside considerations of urgency, irreparable harm or serious prejudice, and balance of convenience. It preferred Justice Dionne's approach in Fonds Azur Capital immobilier-Québec c. Morin over the more open-ended discretion described in Vention inc. c. Groupe MCA France. Applying that standard, the court found that Harmek's mandated lawyer had been present and made limited representations at the Demers trial, and that none of the lawyer's actions had been disavowed. It distinguished the authorities Harmek relied on — Ville de Montréal-Est c. Miclau-SRI inc., Municipalité de Wentworth-Nord c. Succession de Reid, Riddle v. ivari, and Lepêcheur c. Girard — on the basis that each involved a party who was not heard at all, whereas Harmek was heard, even if inadequately, through counsel. Given Harmek's own acknowledgment that the $1,000,000 balance of sale was due, the court also found no serious defence had been articulated. On timeliness, the court applied article 84 C.C.P., which permits an extension only where it was impossible in fact for the party to act sooner, and concluded that Harmek's claimed discovery date of May 20, 2026 was implausible given the September 22, 2025 Notice of Judgment, the April 23, 2026 seizure, and Harmek's own emails from May 6 and 7, 2026. Even accepting Harmek's stated discovery date, the court found it had not shown the diligence required to justify an extension of the 30-day and six-month delays for seeking revocation.

Ruling and overall outcome

The court dismissed Harmek Holdings Inc. and 2951291 Canada Inc.'s Application to Suspend the Execution of the Demers judgment, finding they had not demonstrated a serious issue to be tried in their revocation application and had not established the diligence required under article 84 C.C.P. The Plaintiffs — 9411-2471 Québec inc., Fiducie Familiale Frédéric Hudon 2015, Frédéric Hudon, and Immeubles Aulauflo Inc. — were the successful party. The court awarded them judicial costs on the dismissal of the suspension application, though no specific dollar figure for those costs is stated in the judgment. Separately, the underlying Demers judgment (not itself under appeal in this decision) had already ordered Harmek to pay the Plaintiffs $1,000,000 plus interest and costs.