Executive Summary: Key Legal and Evidentiary Issues

• Mootness ended the first application for leave to appeal because the applicants had paid all rent arrears, the lease was terminated, and they had vacated the premises.
   
• Leave to appeal out of time was sought from an interlocutory Court of Québec judgment that found the applicants in breach of a safeguard order and foreclosed them from contesting the originating application.
   
• Paragraph [41] of the June 22 judgment, which authorized the landlord to enroll for judgment by default to plead on the remaining conclusions of its originating application, was quoted and addressed by the Court.
   
• The originating application was not filed before the Court of Appeal, but the parties indicated that it contains a damages claim of about $60,000 that, according to the respondent, will likely be amended upward.
   
• Through counsel, the respondent waived the foreclosure pronounced in paragraph [41], allowing the applicants to contest the damages claim through the usual procedure.
   
• Proportionality led the Court to refuse leave on any issues other than damages, if any still remained.
   

Facts of the case

9524-4620 Québec inc. and Pavel Iuricovschi owed rent as tenants and surety under a commercial lease with 9461-3353 Québec inc., the lessor. The dispute was before the Court of Québec, where Judge Luc-Hervé Thibaudeau issued two interlocutory judgments. In the first, dated May 20, 2026 and rectified May 21, 2026, he found that the parties had reached a transaction on the payment of rent. Through a safeguard order, he required the applicants to pay the rent on specified deadlines and to pay $10,092.94 on the first of each month until the lease expired or the Court of Québec ordered otherwise.

A second judgment followed on June 17, 2026 and was rectified on June 22, 2026 [the Court of Appeal later refers to it as the judgment of June 22, 2026]. Among other things, the judge noted the applicants' failure to comply with the safeguard order by paying the rent by that date, and he declared them foreclosed from contesting the landlord's originating application. He also ordered them to pay the rent then due and authorized the landlord to enroll for judgment by default to plead on the remaining conclusions of that application. The applicants sought leave to appeal the first judgment through an amended application and the second through an application for leave to appeal out of time.

Policy and legislative provisions at issue

The out-of-time application was brought under articles 30, 357 and 363 of the Code of Civil Procedure. For the amended, referred application, the applicants relied on articles 31, 206 and 357. Neither set of provisions is quoted or interpreted in the decision, which identifies them by number only.

Paragraph [41] of the June 22 judgment was the key text reviewed by the Court. That paragraph authorizes the plaintiff 9461-3353 Québec inc. to enroll for judgment by default to plead on the other conclusions of the originating application. The Court's ruling also rests on the principle of proportionality, which it invokes without citing a specific provision.

Reasoning and analysis

At the hearing, the applicants conceded that the appeal of the first judgment was moot. They had paid all rent arrears, the lease had been terminated, and they had left the premises. With the landlord's agreement, the Court dismissed that application on that basis.

The application concerning the second judgment remained live. Neither side filed the originating application before the Court, but the parties said it includes a damages claim of about $60,000. According to the landlord, that claim would likely be amended upward, and the applicants wanted to defend against it.

Because the damages claim was separate from the rent covered by the safeguard order and the applicants' default, the landlord's counsel told the Court it was waiving the foreclosure pronounced in paragraph [41]. [The quoted paragraph [41] authorizes default enrolment, while paragraph [4] of the Court's reasons describes the foreclosure as a separate conclusion.] That waiver left the applicants free to contest the damages claim through the usual procedure. On that basis, the Court held that granting leave on the remaining issues other than damages, if any still existed, would not be consistent with the principle of proportionality.

Ruling and overall outcome

Sitting on September 18, 2026 in a continuation of the September 14 hearing, the panel of Justices Baudouin, Bachand and Weitzman ruled from the bench. Leave to appeal was dismissed in file 500-09-700585-268. The panel also formally took note of the landlord's waiver of the foreclosure in paragraph [41] of the rectified June 22 judgment and dismissed the out-of-time application in file 500-09-032186-264.

9461-3353 Québec inc. was the successful party on both applications and was awarded legal costs. The decision states no amount for those costs and orders no other monetary relief at the appellate level. Because of the waiver, the applicants remain able to contest the damages claim according to the usual procedure.