Executive Summary: Key Legal and Evidentiary Issues

• A Quebec grocery and restaurant operator sought reimbursement of a $6,000 deposit paid for a ventilation system that was never installed.
   
• Both corporate and personal defendants defaulted, leaving the claims unopposed at trial.
   
• Characterizing the agreement as a contract of sale rather than a service contract determined which Civil Code provisions applied.
   
• Personal liability against the company's sole shareholder turned on whether he committed an independent extracontractual fault.
   
• Evidence showed the shareholder knowingly misrepresented that the supplier had been paid in order to obtain the deposit.
   
• Damages for trouble and inconvenience were denied because a corporation cannot suffer subjective moral injury.
   

Facts of the case

Marché Réjean Gervais inc. (Marché), which operates a grocery store and restaurant, retained Ventilation & Climatisation Boréale inc. (Boréale) in February 2025 to supply and install a ventilation system needed to run a generator essential to its business. Boréale's sole shareholder, Pierrick Lethiecq, provided a quotation on February 18, 2025, which Marché accepted the same day. On May 8, 2025, Lethiecq told Marché that Boréale's supplier, TôleXpert, was owed $6,001.70 for materials, that he had already paid this amount, and that Marché needed to advance a $6,000 deposit. Marché paid the deposit on May 15, 2025. Installation was repeatedly delayed, and by August 2025 Marché discovered TôleXpert had never been paid and still held the materials. Marché put Boréale on formal notice to reimburse the deposit, and Lethiecq admitted in text exchanges that he had not paid the supplier and lacked the funds to repay the deposit in full. Marché ultimately purchased the materials itself and arranged installation through a third party. Neither Boréale nor Lethiecq responded to the lawsuit, and both were in default when the matter proceeded to judgment.

Policy and legislative provisions at issue

The court applied article 2103 of the Civil Code of Québec, which classifies an agreement as a contract of sale, rather than a contract of enterprise or for services, when the work involved is ancillary to the value of the goods supplied; because supply of the ventilation equipment was the contract's main object, the agreement was treated as a sale. Article 1711 C.C.Q. was applied to hold that a sum paid toward a sale is presumed to be a refundable deposit absent a contrary provision, recoverable once the contract is resolved for non-performance. On personal liability, the court considered article 317 C.C.Q., which allows the corporate veil to be lifted only where a company is used as a façade for fraud, abuse of right, or a breach of public order, and article 1457 C.C.Q., which permits liability for an officer's own extracontractual fault independent of any veil-piercing. The court also applied section 178(1)(e) of the Bankruptcy and Insolvency Act in declaring the debt non-dischargeable as one arising from fraudulent misrepresentation.

Reasoning and analysis

The court found the agreement was a sale rather than a service contract, since the ventilation equipment — not the installation labour — was the principal object of the deal. Boréale never performed its core obligation to supply and install the equipment, and because the supplier was never paid, the contract was resolved for non-performance, entitling Marché to recover its $6,000 deposit. On personal liability, the court noted directors are ordinarily shielded from a company's obligations to third parties, and found the strict conditions for piercing the corporate veil under article 317 were not met, since the evidence did not show Boréale was used merely as a façade. Liability against Lethiecq instead rested on his own extracontractual fault: he falsely told Marché the supplier had been paid, knew the statement was untrue, and later falsely blamed delays on the supplier, all to obtain the deposit. The court found this misrepresentation directly caused Marché's loss, since Marché would not otherwise have advanced the funds, making Lethiecq personally and solidarily liable with Boréale. Marché's separate claim for trouble and inconvenience was dismissed for lack of evidence of the nature and extent of any additional loss, and because a corporation cannot experience subjective moral injury. Regarding the Bankruptcy and Insolvency Act declaration, the court accepted that the presumption of fraudulent intent had not been rebutted, given Lethiecq's knowing misrepresentations.

Ruling and overall outcome

The court granted Marché's application in part. Boréale and Lethiecq were ordered, solidarily, to pay Marché $6,000, plus interest at the legal rate and the additional indemnity under article 1619 C.C.Q. from August 20, 2025. The court declared that the judgment resulted from fraud, embezzlement, or breach of trust within the meaning of the Bankruptcy and Insolvency Act, rendering the debt non-dischargeable, and ordered the defendants to pay Marché's legal costs. Marché's claim for $3,000 in damages for trouble and inconvenience was denied.