Commercial Litigation

Eight quotes hallucinated by AI cost $5,000 for substantial breach (art. 342 C.C.P.) in the Specter Aviation case.1 While AI can improve access to justice, unverified AI use can lead to sanctions, adding to the risks unrepresented parties face. Quebec courts advocate for openness to AI, but with proper controls: AI is only useful when verified, traceable and supported by official sources. The cost of hallucinations On October 1, 2025, the Superior Court rendered judgment on a contestation to an application for homologation of an arbitral award rendered by the Paris International Arbitration Chamber (PIAC) on December 9, 2021. Under articles 645 and 646 C.C.P., the role of the Court in such a situation is limited to verifying whether one of article 646’s limiting grounds for refusal has been demonstrated. The applicant’s grounds—ultra vires, procedural irregularities, infringement of fundamental rights, public order, abuse of power—were deemed inappropriate and unconvincing. Although the decision is interesting in this respect, it is even more so in another one altogether. In his contestation, the unrepresented defendant relied on all possible support he could get from artificial intelligence. In response, the plaintiffs filed a table listing eight occurrences of non-existent citations, decisions never having been rendered, irrelevant references and inconsistent conclusions. Questioned at the hearing, the defendant did not deny that some references might have been hallucinated.2 In his judgment, Justice Morin turned the issue to principles. On one hand, access to justice requires a level playing field and the orderly and proportionate management of proceedings. On the other, even though unrepresented claimants or plaintiffs are given flexibility, never is forgery allowed: “Fabrication or shams cannot be tolerated to facilitate access to justice.”3 The Court therefore qualified the presentation of fictitious case law or fictitious quotes from authorities, whether intentionally or through simple negligence, as a serious breach that contravenes the solemnity that the act of filing of proceedings carries. It invoked article 342 C.C.P. to order the defendant to pay $5,000, to deter such conduct and protect the integrity of the process.4 Art. 342 C.C.P.: The power to punish substantial breaches Article 342 C.C.P. stems from the reform that was adopted in 2014 and came into force in 2016. Because this provision authorizes the court to impose a fair and reasonable sanction5 for significant breaches in the conduct of proceedings, it can be said to be punitive and dissuasive in nature. This power is distinct from the power granted by articles 51 to 54 C.C.P. which govern abuse of procedure, and an exception to the general regime of fees6 by which extrajudicial fees can be awarded, when warranted.7 A “substantial breach” must not simply be a trivial issue. It must reach a certain degree of seriousness, but it need not involve bad faith. It implies additional time and expense and contravenes the guiding principles of articles 18 to 20 C.C.P. (proportionality, control and cooperation).8 Nearly ten years later, case law illustrates a range of uses: $100,000 for the late filing of applications or amendments resulting in postponements and unnecessary work;9 $91,770.10 for a continuance on the morning of trial for failure to ensure the presence of a key witness;10 $10,000 for repeated delays, tardy amendment of proceedings and non-compliance with case management orders;11 $3,500 for the failure to or delay in disclosing evidence;12 $1,000 for filing an undisclosed statement in the middle of a hearing to take the opposing party by surprise.13 Sanctions and uses of AI in Canada and elsewhere Moreover, although the use of section 342 to sanction unverified use of technological tools appears to be a first in Quebec, a number of Canadian judgments have already imposed penalties for similar issues. In particular, they awarded: $200 in costs against an unrepresented party for having filed pleadings containing partially non-existent quotes to compensate for the time spent to make verifications.14 $100 in Federal Court, at the lawyer’s personal expense, for having quoted non-existent decisions generated by AI, without disclosing its use, further to the Kuehne + Nagel test.15 $1,000 before the Civil Resolution Tribunal of British Columbia to compensate for time needlessly spent dealing with clearly irrelevant, AI-generated arguments and documents in a case opposing two unrepresented parties.16 $500 and expungement of file containing AI-hallucinated authorities for non-compliance with the Federal Court’s AI policy.17 The $5,000 sanction ordered in this case was a deterrent; however, it is distinct from these other essentially compensatory amounts while in line an international trend, which can be observed  in the following cases: On June 22, 2023, in the United States (S.D.N.Y.), a Rule 11 penalty of USD 5,000 was imposed along with non-pecuniary measures (notice to client and judges falsely cited), in Mata v. Avianca, Inc.18 . On September 23, 2025, in Italy, a sum of €2,000 was awarded ex art. 96, co. 3 c.p.c. (€1,000 to the opposing party and €1,000 to Cassa delle ammende), plus €5,391 in legal costs (spese di lite), by the Tribunale di Latina.19 On August 15, 2025, in Australia, personal costs of AUD 8,371.30 were ordered against the plaintiff’s lawyer, with referral to the Legal Practice Board of Western Australia, following fictitious citations generated by AI (Claude, Copilot).20 On October 22, 2025, in the United States (E.D. Oklahoma), monetary penalties totaling $6,000 were imposed on attorneys personally. They were also required to repay fees of $23,495.90, and some of their pleadings were stricken from the record with the requirement to refile verified pleadings.21 In addition to monetary penalties, Quebec courts have already identified a number of problematic situations related to the use of AI, such as: The Régie du bâtiment du Québec had to examine a 191-page brief containing numerous non-existent references. The author finally admitted to having used ChatGPT to formulate them. The commissioner underscored the resulting work overload and the need to regulate the use of AI before the RBQ.22 In a commercial case, the Court suspected hallucinated references and dismissed them, ruling on the credible evidence.23 At the Administrative Housing Tribunal (AHT), a lessor who had read translations of the C.C.Q. obtained through ChatGPT—which distorted its meaning—saw his application dismissed. However, his conduct was not found to be abusive, as his good faith was recognized.24 Two related AHT decisions noted that an agreement (a “Lease Transfer and Co-Tenancy Agreement”) had been drafted with the help of ChatGPT, but the AHT simply analyzed them as it usually does (text, context, C.C.Q. rules) and concluded that there had been a deferred lease assignment, without drawing any particular consequence from the use of AI.25 At the Court of Québec, a litigant attributed a self-incriminating formulation in his application to ChatGPT; the Court dismissed his explanation.26 In an application to have evidence set aside, the applicant claimed that he thought he was obliged to respond to investigators after having done research on Google and ChatGPT regarding his duty to cooperate with the employer just prior to the interview. The Court noted that he had been clearly informed of his right to remain silent and that he could leave or consult a lawyer. It therefore concluded that there was no real constraint and allowed the statement.27 Openness to AI with proper controls, certainly, but with a caveat These are just a few of a long and growing list of cases across Canada and the world around. Despite this trend, the decision in Specter Aviation avoids stigmatizing AI. The Court rather insisted on remaining open to AI, pointing out that it must be used with proper controls, reminding us that a technology that facilitates access to justice must be welcomed and given proper controls, not proscribed.28 Openness to AI comes with clear requirements, such as those set out in the opinion published by the Superior Court on October 24, 2023. In the notice, the Superior Court called for caution, the use of reliable sources (court websites, recognized commercial publishers, established public services) and “meaningful human control” of generated content.29 The practice guides issued by various courts all point in the same direction: We should govern the use of AI without banning it. The Federal Court requires a declaration when a filed document contains AI-generated content and insists on “human in the loop” verification.30 The Court of Appeal of Quebec,31 the Court of Québec32 and the municipal courts33 have issued similar warnings: need for caution, authoritative sources, hyperlinks to recognized databases and full responsibility of the author. Nowhere is AI banned—all make its use conditional on verification and traceability. Some clues suggest that the judiciary itself is using artificial intelligence. In the Small Claims Division, on at least two occasions, a judge attached English translations generated by ChatGPT as a courtesy, specifying that they had no legal value and that the French version prevailed.34 In family law, a Superior Court decision in a family matter clearly used a Statistics Canada link identified by an AI tool (the URL includes “utm_source=chatgpt.com”), but the reasoning remains rooted in primary sources and case law: The AI was used as a search tool, not to provide a legal basis.35 A decision handed down on September 3, 2025, by the Commission d’accès à l’information is a particularly good illustration of openness with proper controls. In Breton c. MSSS,36 the court allowed exhibits containing content generated by Gemini and Copilot, because they were corroborated by relevant, primary sources that had already been filed (Journal des débats, newspaper excerpts, official websites). Despite art. 2857 C.C.Q. and the flexibility of administrative law, the Court reiterated that AI content is admissible if, and only if, it is verified, traceable and supported by official sources. AI that aims to please us and that we want to believe Two constants emerge from the sanctioned cases: excessive confidence in the AI’s reliability and underestimated risk of hallucination. In the United States, in Mata v. Avianca,37 the lawyers claimed that they believed that the tool could not invent cases. In Canada, in Hussein v. Canada,38 the plaintiff’s lawyer claims to have relied on an AI service in good faith, without fully realizing that it was necessary to check references. In Australia, in JNE24 v. Minister for Immigration and Citizenship,39 the court reported an over-reliance on tools (Claude, Copilot) and insufficient verification. In Quebec, the AHT found that a lessor had been misled by the use of artificial intelligence,40 while at the Administrative Labour Tribunal (ALT), ChatGPT-generated answers deemed to be approximately 92% accurate were used.41 These examples describe a generalized trust bias that is particularly risky for those who represent themselves: AI is perceived as a reliable way to gain speed, but in reality, it requires greater human control. Large language models are optimized to produce plausible and engaging responses; but, without proper controls, they tend to confirm user expectations rather than pointing out their own limitations.42 A notice published last April by OpenAI concerning an update that made its model “overly supportive” testifies to the underlying complexity of striking the right balance between engagement and preciseness.43 This makes it easier to understand how a quarrelsome litigant may have persuaded himself, based on an AI response, that he was entitled to personally sue a judge for judicial acts perceived as biased.44 Models trained to “please” or to keep users engaged can generate responses that, in the absence of legal contextualization, amplify erroneous or imprudent interpretations. Although AI service providers generally seek to limit their liability for the consequences of incorrect answers, the scope of such clauses is necessarily limited. When ChatGPT, Claude and Gemini apply legal principles to facts reported by a user, doesn’t the entity offering the service expose itself to the rules of public order that make such acts the exclusive prerogative of lawyers, which cannot be waived by a simple disclaimer? In Standing Buffalo Dakota First Nation v. Maurice Law, the Saskatchewan Court of Appeal reiterated that the prohibition on the practise of law applies to any “person" (including a corporation) and expressly contemplated that technological mediation would not change the analysis of what prohibited acts are.45 In Quebec, this principle is enshrined in section 128 of the Act respecting the Barreau du Québec and the Professional Code: general legal information is permitted, but individualized advice can only be provided by a lawyer. While some aberrant situations have involved lawyers, unrepresented claimants or plaintiffs appear to be the most exposed to the effects of AI. Should we focus on educating users first, or restrict certain uses? The tension between access to justice and protecting the public is quite obvious. Conclusion The Specter Aviation ruling confirms that artificial intelligence has its place in court, provided that rigorous controls are applied to it, and that it is useful when verified, but sanctionable when not. While AI offers unprecedented possibilities in terms of access to justice, combining it with public protection remains a major challenge. Despite this clear signal, containing over-reliance on tools designed to be engaging and supportive, and that claim to have an answer to everything, will remain a challenge for years to come. Specter Aviation Limited c. Laprade, 2025 QCCS 3521, online: https://canlii.ca/t/kfp2c Id., paras. [35], [53] Id. para. [43] Id. para. [60] Chicoine c. Vessia, 2023 QCCA 582, https://canlii.ca/t/jx19q, para. [20]; Gagnon c. Audi Canada inc., 2018 QCCS 3128, https://canlii.ca/t/ht3cb, paras. [43]–[48]; Layla Jet Ltd. c. Acass Canada Ltd., 2020 QCCS 667, https://canlii.ca/t/j5nt8, paras. [19]–[26]. Code of Civil Procedure, CQLR, c. C-25.01, arts. 339–341. Chicoine c. Vessia, supra. note 5, paras. [20]–[21]; Constellation Brands US Operations c. Société de vin internationale ltée, 2019 QCCS 3610, https://canlii.ca/t/j251v, paras. [47]–[52]; Webb Electronics Inc. c. RRF Industries Inc., 2023 QCCS 3716, https://canlii.ca/t/k0fq8, paras. [39]–[48]. 9401-0428 Québec inc. c. 9414-8442 Québec inc., 2025 QCCA 1030, https://canlii.ca/t/kdz4h, paras. [82]–[87]; Biron c. 150 Marchand Holdings inc., 2020 QCCA 1537, https://canlii.ca/t/jbnj2, para. [100]; Groupe manufacturier d’ascenseurs Global Tardif inc. c. Société de transport de Montréal, 2023 QCCS 1403, https://canlii.ca/t/jx042, para. [26]. Groupe manufacturier d’ascenseurs Global Tardif inc. c. Société de transport de Montréal, supra. note 8, paras. [58]–[61] ($100,000 to Global Tardif, $60,000 to Intact Assurance, $40,000 to Fujitec, all as legal costs awarded under art. 342 C.C.P.); see also $20,000 for an application for an amendment made on the 6th day of a trial, forcing a continuance: Paradis c. Dupras Ledoux inc., 2024 QCCS 3266, https://canlii.ca/t/k6q26, paras. [154]–[171]; Webb Electronics Inc. c. RRF Industries Inc., supra. note 7. Layla Jet Ltd. c. Acass Canada Ltd, supra note 5, paras. [23]–[28]. Électro-peintres du Québec inc. c. 2744-3563 Québec inc., 2023 QCCS 1819, https://canlii.ca/t/jxfn0, paras. [18]–[22], [35]–[38]; see also Constant c. Larouche, 2020 QCCS 2963, https://canlii.ca/t/j9rwt, paras. [37]–[40] (repeated delays in adhering to undertakings despite an order, sanction: $5,000). Constellation Brands US Operations c. Société de vin internationale ltée, supra. note 7, paras. [39]–[43], [47]–[52]; see also AE Services et technologies inc. c. Foraction inc. (Ville de Sainte-Catherine), 2024 QCCS 242, https://canlii.ca/t/k2jvm (repeated delays in transmitting promised documentation and breach of an undertaking before the court; compensation of $3,000). Gagnon c. SkiBromont.com, 2024 QCCS 3246, https://canlii.ca/t/k6mzz, paras. [29]–[37], [41]. J.R.V. v. N.L.V., 2025 BCSC 1137, https://canlii.ca/t/kcsnc, paras. [51]–[55]. Hussein v. Canada (IRCC), 2025 FC 1138, https://canlii.ca/t/kctz0, paras. [15]–[17], applying Kuehne + Nagel Inc. v. Harman Inc, 2021 FC 26, https://canlii.ca/t/jd4j6, paras. [52]–[55] (reiterating the principles of Young v. Young and the two-step test: (1) conduct causing costs to be incurred; (2) discretionary decision to impose costs personally). AQ v. BW, 2025 BCCRT 907, https://canlii.ca/t/kd08x, paras. [15]–[16], [38]–[40]. Lloyd's Register Canada Ltd. v. Choi, 2025 FC 1233, https://canlii.ca/t/kd4w2 Mata v. Avianca, Inc, No. 22-cv-1461 (PKC) (S.D.N.Y. June 22, 2023) (sanctions order), online: Justia https://law.justia.com/cases/federal/district-courts/new-york/nysdce/1:2022cv01461/575368/54/ Tribunale di Latina (giud. Valentina Avarello), sentenza 23 septembre 2025, Atto redatto con intelligenza artificiale a stampone, con scarsa qualità e mancanza di pertinenza: sì alla condanna ex art. 96 c.p.c., La Nuova Procedura Civile (september 29, 2025), online: https://www.lanuovaproceduracivile.com/atto-redatto-con-intelligenza-artificiale-a-stampone-con-scarsa-qualita-e-mancanza-di-pertinenza-si-alla-condanna-ex-art-96-c-p-c-dice-tribunale-di-latina/ Australia, Federal Circuit and Family Court of Australia (Division 2), JNE24 v. Minister for Immigration and Citizenship, [2025] FedCFamC2G 1314 (August 15, 2025), Gerrard J, online: AustLII https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FedCFamC2G/2025/1314.html United States, District Court for the Eastern District of Oklahoma, Mattox v. Product Innovations Research, LLC d/b/a Sunevolutions; Cosway Company, Inc.; and John Does 1–3, No. 6:24-cv-235-JAR, Order (October 22, 2025), online: Eastern District of Oklahoma https://websitedc.s3.amazonaws.com/documents/Mattox_v._Product_Innovations_Research_USA_22_October_2025.pdf Régie du bâtiment du Québec c. 9308-2469 Québec inc. (Éco résidentiel), 2025 QCRBQ 86, online: https://canlii.ca/t/kfdfg, paras. [159]–[167]. Blinds to Go Inc. c. Blachley, 2025 QCCS 3190, online: https://canlii.ca/t/kf963 para. [57] and n. 22. Lozano González c. Roberge, 2025 QCTAL 15786, online: https://canlii.ca/t/kc2w9 paras. [7], [17]–[19]. Marna c. BKS Properties Ltd, 2025 QCTAL 34103, online: https://canlii.ca/t/kfq8n paras. [18], [21]–[25]; Campbell c. Marna, 2025 QCTAL 34105, online: https://canlii.ca/t/kfq81 paras. [18], [21]–[25]. Morrissette c. R., 2023 QCCQ 12018, online: https://canlii.ca/t/k3x5j para. [43]. Léonard c. Agence du revenu du Québec, 2025 QCCQ 2599, online: https://canlii.ca/t/kcxsb paras. [58]–[64]. Specter Aviation Limited c. Laprade, supra. note 1, para. [46]. Superior Court of Quebec, “Notice to Profession and Public – Integrity of Court Submissions When Using Large Language Models,” October 24, 2023, online: https://coursuperieureduquebec.ca/fileadmin/cour-superieure/Districts_judiciaires/Division_Montreal/Communiques/Avis_a_la_Communite_juridique-Utilisation_intelligence_artificielle_EN_October_24_2023.pdf Federal Court, “Notice to the Parties and the Profession – The Use of Artificial Intelligence in Court Proceedings,” December 20, 2023, online: https://www.fct-cf.ca/Content/assets/pdf/base/2023-12-20-notice-use-of-ai-in-court-proceedings.pdf; Federal Court, Update – The Use of Artificial Intelligence in Court Proceedings, May 7, 2024, online: https://www.fct-cf.ca/Content/assets/pdf/base/FC-Updated-AI-Notice-EN.pdf Court of Appeal of Quebec, “Notice Respecting the Use of Artificial Intelligence Before the Court of Appeal”, August 8, 2024, online: https://courdappelduquebec.ca/fileadmin/dossiers_civils/avis_et_formulaires/eng/avis_utilisation_intelligence_articielle_ENG.pdf Court of Québec, “Notice to the legal community and the public – Maintaining the integrity of submissions before the Court when using large language models,” January 26, 2024, online: https://courduquebec.ca/fileadmin/cour-du-quebec/centre-de-documentation/toutes-les-chambres/en/NoticeIntegriteObservationsCQ_LLM_en.pdf Cours municipales du Québec, Avis à la profession et au public – Maintenir l’intégrité des observations à la Cour lors de l’utilisation de grands modèles de langage, December 18, 2023, online: https://coursmunicipales.ca/fileadmin/cours_municipales_du_quebec/pdf/Document_d_information/CoursMun_AvisIntegriteObservations.pdf Bricault c. Rize Bikes Inc., 2024 QCCQ 609, online: https://canlii.ca/t/k3lcd n. 1; Brett c. 9187-7654 Québec inc, 2023 QCCQ 8520, online : https://canlii.ca/t/k1dpr, n. 1. Droit de la famille – 251297, 2025 QCCS 3187, online: https://canlii.ca/t/kf96f paras. [138]–[141]. Breton c. Ministère de la Santé et des Services sociaux, 2025 QCCAI 280, online: https://canlii.ca/t/kftlz, paras. [24]–[26], [31]. Mata v. Avianca, Inc, supra note 18. Hussein v. Canada (IRCC), 2025 FC 1138, supra note 15, paras. [15]–[17]. JNE24 v. Minister for Immigration and Citizenship, supra note 20. Lozano González c. Roberge, supra note 24, para. [17]. Pâtisseries Jessica inc. et Chen, 2024 QCTAT 1519, online: https://canlii.ca/t/k4f96, paras. [34]–[36]. See Emilio Ferrara, “Should ChatGPT be Biased? Challenges and Risks of Bias in Large Language Models” (2023), SSRN 4627814, online: https://doi.org/10.2139/ssrn.4627814; Isabel O. Gallegos et al, “Bias and Fairness in Large Language Models: A Survey” (2024) 50:3 Computational Linguistics 1097, doi: 10.1162/coli_a_00524. See OpenAI, “Sycophancy in GPT-4o: what happened and what we're doing about it,” April 29, 2025, online: https://openai.com/research/sycophancy-in-gpt-4o; see also “Expanding on what we missed with sycophancy,” May 2, 2025, online: https://openai.com/index/expanding-on-sycophancy/ [44]Verreault c. Gagnon, 2023 QCCS 4922, online: https://canlii.ca/t/k243v, paras. [16], [28]. Standing Buffalo Dakota First Nation v. Maurice Law Barristers and Solicitors (Ron S. Maurice Professional Corporation), 2024 SKCA 14, online: https://canlii.ca/t/k2wn9 paras. [37]–[40], [88]–[103].

On November 15, 2024,1 in Bouchelaghem v. Université Laval,2 Superior Court Mr. Robert Dufresne granted an application for dismissal on the grounds of res judicata and abuse. His judgment is a reminder of the importance of the presumption of judgments’ validity and stability, principles linked to the authority of res judicata. To put Mr. Justice Dufresne’s decision in context, it is important to explain plaintiff’s first recourse, which led to an initial judgment by Mr. Justice Bernard Tremblay, J.S.C., granting an initial application for dismissal.3 First recourse The plaintiff was as a doctoral student outside Canada and the United States. In July 2019, she began a residency program in family medicine. On November 24, 2020, the program’s Promotion Committee for the Faculty of Medicine decided to exclude the plaintiff from the program due to her results in the residencies completed to that date.4 On December 2, 2020, Plaintiff appealed this exclusion before the Faculty of Medicine’s Appeals Committee.5 On February 4, 2021, this committee held a hearing that ended with the Promotion Committee’s decision being upheld.6 On February 8, 2021, the Dean of the Faculty of Medicine communicated the Appeal Committee’s decision to the plaintiff.7 That same day, the plaintiff contacted the Dean to complain about the Appeal Committee’s decision.8 On February 18, 2021, the Dean reiterated to the plaintiff the contents of the Appeal Committee’s decision and informed her that the decision was final.9 All internal remedies had been exhausted. On May 17, 2022, the plaintiff filed an application against Université Laval for annulment of the final decision rendered on February 8, 2021, by the Appeal Committee, titled Demande introductive d'instance associée [à un] pourvoi en contrôle judiciaire (“Originating application associated with an appeal for judicial review”). In this 442-paragraph proceeding, she sought reinstatement in the family medicine residency program, plus damages. While a challenge to an exclusion decision must be made within a reasonable time,10 usually 30 days according to jurisprudence, the plaintiff initiated her appeal almost 15 months after her exclusion from the residency program. On September 28, 2022, the University therefore filed an application to dismiss her case, on the grounds that the delay in initiating it was unreasonable and that the plaintiff did not cite any valid exceptional circumstances in her proceedings to justify this delay.  On May 15, 2023, Mr. Justice Tremblay, J.S.C., concluded that the plaintiff’s recourse qualified as an application for judicial review and that it had been filed late.11 For these reasons, he declared the recourse inadmissible and dismissed it in its entirety, since he also considered that the damages claimed by the plaintiff arose directly from her exclusion from the residency program.12 Dissatisfied with Mr. Justice Tremblay’s decision, the plaintiff served the University with a Demande de permission d’en appeler d’un jugement mettant fin à l’instance (“Application for leave to appeal a judgment ending the proceeding”). On September 19, 2023, Ms. Justice Gagné, J.C.A., dismissed the plaintiff’s application for leave to appeal,13 thereby confirming the finality of the initial decision and giving res judicata to Mr. Justice Tremblay’s ruling. Second recourse On January 30, 2024, the plaintiff initiated a new action against Université Laval, this time titled Demande introductive d'instance en dommages et intérêts (“Originating application for damages”), in which she claimed a total amount of nearly $9.5 million from the University. This 213-paragraph proceeding largely repeated the allegations made in the first recourse, generally accusing the same parties of the same faults. However, the plaintiff had removed all allegations relating to the application for judicial review and the justification for her delay in pursuing a recourse, choosing instead to group her complaints against each representative or member of the University. The University filed a Demande en irrecevabilité pour cause de chose jugée et en rejet pour abus (“Application for dismissal on the grounds of res judicata and abuse”)against this new recourse, considering that the plaintiff was attempting to revive a dispute that had already been decided by the Quebec courts, and that she had already availed herself of her right of appeal. In response to the University’s application for dismissal, the plaintiff amended her originating application to add thirteen (13) defendants, namely the individuals targeted by her allegations.  The hearing on the defendants’ application for dismissal on the grounds of res judicata and abusetook place on October 9 and November 7, 2024, before Mr. Justice Dufresne. The law The principle of res judicata is codified in article 2848 of the Civil Code of Québec. To establish the legal presumption of validity of judgments (res judicata), two conditions must be met: Triple identity must be established to ensure that the same cause, between the same parties applying for the same purpose, has already been decided.  The judgment in a contentious matter must be rendered by a competent court and must be final.14 Before beginning his analysis of the triple identity, Mr. Justice Dufresne first examined this second criterion. He noted that the judgment in a contentious matter was rendered by a court of competent jurisdiction, since Mr. Justice Tremblay was seized of the application for dismissal. He also concluded that the judgment had become final as more than thirty days had elapsed since its pronouncement and permission to appeal had been refused. The second criterion is therefore satisfied.15 Mr. Justice Dufresne then proceeded to analyze the triple identity criterion. He found it had been established that the parties were legally identical in both recourses. Hundreds of allegations were compared between the first and second recourses, as were dozens of exhibits produced in support of both proceedings.16 He also noted that the plaintiff formulated the same complaints in both recourses, although the way of describing those to whom they were addressed was somewhat different. He put it this way: “[24] The faults, failures and complaints raised before Mr. Justice Tremblay, J.S.C., against the defendants are the same as those raised in the present case. Those responsible are identified. Whether they are identified as managers, employees or civil servants, does not change the fact that, legally, the defendant is the same in both recourses." As recognized in jurisprudence, adding defendants to a recourse does not prevent the court from finding that the parties are identical, since this identity does not have to be perfect.17 As for identity of cause, Mr. Justice Dufresne noted that although the vocabulary is sometimes different, the complaints of bad faith, falsification of documents, illicit and illegal application of standards, violation of certain fundamental rights, and discrimination are repeated or renewed from one proceeding to the next. In both recourses, the plaintiff raises the same issues (which she confirmed when examined by the judge on this subject during her closing arguments).18 The second recourse again sought compensation for the harm resulting from the plaintiff’s exclusion from her residency program. Mr. Justice Tremblay had already ruled that the plaintiff’s damages stem from her exclusion from the program. He had already concluded, in his judgment of May 15, 2023, that the entire recourse is inadmissible.19 Finally, on the question of identity of purpose, Mr. Justice Dufresne wondered whether the new recourse would expose the court to contradict an earlier decision. He soon discovered that this was indeed the case; allowing the plaintiff’s recourse would require rejecting the conclusions of the previous judgment.20 The abusive nature of the recourse Mr. Justice Dufresne then considered whether the plaintiff’s recourse was abusive. He considered this to be the case, since the plaintiff was repeating the allegations of a recourse that had already been dismissed. He concluded that she has not acted in good faith and that she was trying to harm the people she holds responsible for her exclusion: “[41] These modifications, by adding defendants and increasing the amount claimed, constitute an excessive and unreasonable use of proceedings. This only serves to harm these people, whom the plaintiff holds culpably responsible for her exclusion from the Program. This is a misappropriation of the ends of justice, whereby the plaintiff is attempting to take justice into her own hands to make these people pay for their faults. Moreover, the plaintiff appears to meet many of the criteria for being declared quarrelsome.” [Our translation] In closing, Mr. Justice Dufresne reminds us that article 51 C.C.P. allows the Court to act, even of its own motion, when a party engages in vexatious or quarrelsome behaviour. He considers that the plaintiff meets several criteria that would allow her to be declared quarrelsome. He mentions having examined these criteria and having considered doing so, but given that the plaintiff did not have the opportunity to present her arguments on the question of quarrelsomeness at the hearing, he concludes that he could not act in violation of the audi alteram partem principle. He grants the University’s application for dismissal on the grounds of res judicata and abuseand dismissed the plaintiff’s recourse in its entirety. Conclusion The principle of res judicata, codified in article 2848 of the Civil Code of Québec, is a pillar of our legal system. Once a court has rendered a final decision, that judgment cannot be called into question again. In the Bouchelaghem case, Mr. Justice Dufresne had to examine numerous allegations and exhibits, and he came to the conclusion that despite the different wording of the allegations and the addition of thirteen parties as defendants, the nature of the plaintiff’s second recourse remains in practice identical to the first. This judgment is a reminder that excessive and unreasonable use of proceedings, with the aim of harming the opposing party, can lead to a party being declared quarrelsome and having to pay additional costs, at the initiative of the judge hearing the case, even without an application from the party subject to the complaints. The plaintiff applied for leave to appeal Mr. Justice Dufresne’s judgment. On February 12, 2025, Mr. Justice Michel Beaupré of the Quebec Court of Appeal dismissed this application.21 The case was pleaded on October 9 and November 7, 2024. 2024 QCSC 4232. The plaintiff filed an application for permission to appeal this decision on December 30, 2024. The hearing is scheduled for February 11, 2025. Bouchelaghem v. Université Laval, 2023 QCSC 4483. Bouchelaghem v. Université Laval, 2023 QCSC 4483 para. 8. Id., para. 9. Id., para. 10. Id., para. 10. Id., para. 149. Id., para. 151. An application for judicial review must be filed within a reasonable time, in accordance with article 529 para.3 C.C.P. Bouchelaghem, supra note 3, para. 116 and para. 162 to 165. Id., para. 120 to 125. Bouchelaghem v. Université Laval, 2023 QCCA 1443. Bouchelaghem v. Université Laval, supra note 2, para. 16. Id. Bouchelaghem v. Université Laval, supra, note 2, para. 23. Bouchelaghem v. Université Laval, supra, note 2, para. 8. Bouchelaghem v. Université Laval, supra, note 2, para. 27-28. This was also noted by Ms. Justice Gagné, J.C.A., in her judgment dismissing the application for leave to appeal, supra, note 13, para. 6. Bouchelaghem v. Université Laval, supra, note 2, para. 36. Bouchelaghem c. Université Laval, 2025 QCCA 144.

Introduction On July 11, 2024, the Court of Appeal1 rendered a decision that, for the first time, addresses the question of whether the elected domicile appearing in the Québec Enterprise Register (the “REQ”), established under the Act respecting the legal publicity of enterprises,2 can provide a basis for the Superior Court’s territorial jurisdiction within the meaning of article 41(3) of the Code of Civil Procedure.3 Upholding the decision rendered by the Superior Court,4 the Court of Appeal answered that it cannot. The Facts On April 25, 2023, Promark Electronics Inc. and Electrical Components International Inc. (collectively, “Promark”) filed a claim for damages against Bombardier Recreational Products Inc. (“BRP”) in the judicial district of Montréal, alleging that a letter of agreement had been terminated and related purchase orders cancelled. On June 22, 2023, BRP raised a declinatory exception asking the court to issue an order transferring the case to the judicial district of Bedford, where its head office is located. Promark argued that filing its claim in the judicial district of Montréal was warranted because of BRP’s elected domicile indicated in the REQ, which corresponded to the office of its counsel located in Montréal. On September 5, 2023, the Honourable Tiziana Di Donato, J.S.C. (the “Judge”) allowed BRP’s declinatory exception and issued an order referring the case to the judicial district of Bedford. On November 10, 2023, the Honourable Stephen W. Hamilton, J.C.A., granted leave to appeal the Judge’s decision, indicating that the courts have never settled the question of whether the domicile elected under section 33 ALPE is sufficient to make paragraph 3 of article 41 of the C.C.P. apply. He added that it appeared to him that the lower courts had rendered contradictory judgments in this regard.5 The Trial Judgement The Judge began by pointing out that, generally, for a purely personal action, the judicial district of the defendant’s domicile is the natural forum (article 41(1) C.C.P.) and that, in the case of a corporation, the domicile would be that of its head office. The Judge further clarified this principle by explaining that, where more than one judicial district has jurisdiction, the plaintiff may institute its proceedings before another court having territorial jurisdiction (article 42 C.C.P.), provided that it establishes that it is entitled to make such an election. In support of its contestation to the declinatory exception, Promark argued that it was entitled to institute the proceedings in the judicial district of Montréal because BRP had elected its domicile under the ALPE, and that, consequently, that district constituted an “elected domicile” under article 41(3) C.C.P., which reads as follows: So far as public order permits, the court of the defendant’s elected domicile, or the court designated by an agreement between the parties other than a contract adhesion, also has territorial jurisdiction. [Our emphasis] To render her decision, the Judge determined that article 41(3) C.C.Q. should be interpreted using modern rules of statutory interpretation, adding in particular that it is useful to refer to prior provisions of a law to ascertain the legislature’s intent. The Judge thus revisited the legislative history of article 41 C.C.P., affirming that it essentially restates the prior law, in particular article 68 of the former Code of Civil Procedure, CQLR c. C-25, which provided in paragraph 1, subparagraph 1 that “. . . a purely personal action may be instituted: (1) [b]efore the court of the defendant’s real domicile or, in the cases contemplated by article 83 of the Civil Code, before that of his elected domicile.” Although paragraph 3 of article 41 C.C.P. no longer specifically refers to article 83 of the Civil Code of Québec (the “C.C.Q.”)6 the Judge, following an interpretive analysis, found that said article still applies to determine whether a party has elected domicile, and stressed the fact that the election of domicile must be express and unequivocal. The Judge added that election of domicile is the exception and must be interpreted restrictively.  As for the scope of an election of domicile under the ALPE, the Judge pointed out that subsection 33(1) ALPE indicates that a business may elect domicile and appoint a person to “receive documents for the purposes of this Act.” Article 98(5) ALPE also indicates that the domicile elected by a business under the ALPE is intended to inform third parties of the address where the business wishes to receive documents “for the purposes of this Act.” The Judge was thus of the opinion that sections 33(1) and 98(5) ALPE, as drafted, cannot have the scope that Promark seeks to ascribe to them, as they are clear and they do not need to be interpreted. In the case of an election of domicile under the ALPE, the purpose of the election is to provide an address where documents can be sent to the business, unless there is specific evidence to the contrary. For these reasons, the Judge allowed the declinatory exception and referred the case to the judicial district of Bedford. The Judgement on Appeal From the outset, the Court of Appeal confirmed that the Judge did not commit a reviewable error: (1) the domicile elected for purposes of attributing territorial jurisdiction under article 41 (3) C.C.P. is the domicile designated by the parties for the execution of their agreement within the meaning of article 83 C.C.Q., and (2) the domicile elected under the ALPE is elected for the purposes of applying the ALPE (para. 23). The Court of Appeal is of the opinion that the Judge’s decision is consistent with what the legislature had prescribed in article 68 of the former Code of Civil Procedure and upholds stability in the law, which is particularly important in matters of jurisdiction. After analyzing the parliamentary debates surrounding the enactment of article 41 C.C.P. and the Commentaires de la ministre de la justice, the Court indicated that there is a presumption of the survival of the existing legal rule and that, contrary to what the appellants claimed, the wording of article 41 C.C.P. and articles 33 and 98 ALPE do not give the courts territorial jurisdiction other than that of the defendant’s domicile. The removal of the reference to article 83 C.C.Q. in article 41 C.C.P. does not constitute a clear indication of the legislature’s intent to set aside the requirements of article 83 C.C.Q., under which, for the purposes of determining territorial jurisdiction, the parties must establish the elected domicile in their agreement. On that basis, the Court of Appeal dismissed the appeal without costs and confirmed the Judge’s reasoning that territorial jurisdiction of the courts under article 41(3) C.C.P. is established based on the election of domicile made under article 83 C.C.Q., and not on the election of domicile made by a corporation under the ALPE, whereby a business elects a domicile for the purposes of the application of that law. Conclusion This case serves as a reminder that the C.C.Q. establishes the general law in our province. It is therefore important to refer to it when interpreting other laws enacted by the Quebec legislature. Because the legislature is “deemed to know its legislative fabric as well as the existing law,”7 the Court cannot interpret a given law—such as the ALPE—in a way that would amend a substantive statutory provision of general application—in this case, the C.C.Q.—where there is no clearly expressed intention to that effect. Promark Electronics Inc. c. Bombardier Recreational Products Inc., 2024 QCCA 906 CQLR, c. P-44.1 (the “ALPE”) CQLR, c. C-25.01 (the “C.C.P.”) Promark Electronics Inc. c. Bombardier Recreational Products Inc., 2023 QCCS 3405 Promark Electronics Inc. c. Bombardier Recreational Products Inc., 2023 QCCA 1427, para. 8 83. “The parties to a juridical act may, in writing, elect domicile with a view to the execution of the act or the exercise of the rights arising from it. Election of domicile is not presumed.” Promark Electronics Inc. c. Bombardier Recreational Products Inc., 2024 QCCA 906, para. 24

Introduction On June 14, 2024, the Superior Court of Québec issued a decision1 interpreting section 938.1.2.2 of the Municipal Code of Québec, which came into force in 2019. This provision gives a person interested in participating in the awarding process the opportunity to file a preliminary complaint about a requirement in the tender documents that they believe does not ensure the honest and fair treatment of tenderers. To our knowledge, this is the first time a court has considered the impact on a claim for damages for loss of profits2 when an unsuccessful tenderer fails to comply with this relatively new provision  The Superior Court concluded that a tenderer’s failure to submit a complaint in a timely manner should be considered as [translation] “a form of fin de non-recevoir, or at the very least, a break in the chain of causation between the alleged fault and the damages claimed” (paragraph 40). Facts The dispute at hand pitted Transport Martin Forget Inc. (“Transport Forget”) against the Municipality of Saint-Alexis (the “Municipality”). On May 6, 2019, the Municipality issued a call for tenders for a snow clearing and salting contract. Transport Forget submitted the lowest bid, which was $150,000 below that of the winning tenderer. Transport Forget was excluded from the call for tenders given its failure to comply with the tender specifications requiring it to provide a Régie du bâtiment du Québec (“RBQ”) licence number, together with an attestation that its licence was in good standing. Further to the Municipality’s refusal to award the contract to Transport Forget, it claimed $300,000 in damages for alleged loss of profits. Transport Forget believed that its tender was compliant, that the RBQ licence requirement imposed by the Municipality was frivolous and unreasonable, that the Municipality failed to uphold the principle of equal treatment of tenderers and that the complaint process provided for in section 938.1.2.2 of the Municipal Code of Québec did not deprive it of its rights. As for the Municipality, it considered the irregularity in Transport Forget’s tender to be major and Transport Forget’s failure to comply with the complaint process concerning this requirement—both reasonable and in the public interest—was fatal to its legal action. The evidence showed that the RBQ licence number provided in Transport Forget’s tender was invalid and that Transport Forget deliberately chose not to renew said licence before submitting its tender, as it was unsure as to whether it would win the bidding process and wished to avoid needlessly paying the $1,000 annual fee required for the licence renewal. Applicable principles In order to determine the outcome of this dispute, the Court analyzed the case based on the decision in Tapitec,3 a landmark ruling in tendering matters. It reiterated the Court’s view that the decisive factor in determining whether an irregularity is minor or major is the equal treatment of tenderers. It also pointed out that municipalities can set out conditions aimed at limiting the number of tenderers, provided that this is done for an important and legitimate purpose. As for section 938.1.2.2 of the Municipal Code of Québec, the Court viewed it as a mechanism for monitoring all contracts awarded by public bodies which is designed to establish a process to ensure compliance with the principles of integrity needed to protect the public interest. According to the Court, the legislator’s intention is also to protect small municipalities such as the one in question (with a population of approximately 1,500) from potential legal action following the opening of tenders by ensuring that issues concerning the principle of equal treatment of tenderers are resolved prior to the tendering process. Tenderers that fail to comply with this requirement will not be entitled to claim damages for loss of profits, as in this case, except where there has been fraud or blatant bad faith, as in cases of collusion. The purpose of the provision in question is to prevent a tenderer that is aware of the requirements set out in the tender documents from contesting such requirements after the fact. Decision The Court found that the requirement to hold an RBQ licence number was a condition intended to limit the number of tenderers, which the Municipality was entitled to do. Although the Court recognized that there is no correlation between being able to perform snow clearing operations and holding an RBQ licence, it accepted the evidence that this condition was an appropriate and quick way for the Municipality to ascertain the credibility and organizational skills of tenderers, which was a important and legitimate objective. The Court therefore concluded that this requirement of the tender specifications was neither frivolous nor arbitrary. The Court considered the irregularity in Transport Forget’s tender to be major. Although the obligation to hold a valid RBQ licence is neither a requirement of public policy nor a substantive requirement, it is intended precisely to proscribe the lack of seriousness shown by Transport Forget when it opted not to pay the renewal fees for its RBQ licence before submitting its tender. The Municipality exercised its administrative discretion in a reasonable manner and ensured that all tenderers were treated equally. The Court found that the Municipality was right to reject Transport Forget’s tender. Although the Court dismissed the claim, it did nevertheless consider section 938.1.2.2 of the Municipal Code of Québec. In the Court’s view, Transport Forget could have lodged a preliminary complaint about the validity of the condition imposed by the Municipality to hold an RBQ licence. Doing so would have given the Municipality the opportunity to amend its call for tenders before the opening of tenders. Transport Forget’s failure to do this rendered its claim for damages inadmissible. Commentary Tenderers for public calls for tenders issued by a municipality must be aware of section 938.1.2.2 of the Municipal Code of Québec4 and understand how to apply it in a timely manner. As demonstrated by the Superior Court’s interpretation of this section in the judgment in question, an unsuccessful tenderer that has not complied with the complaint process set out in said section and who intends to sue for damages for an alleged loss of profits could have their claim turned down on grounds of a fin de non-recevoir. Transport Martin Forget Inc. c. Municipalité de Saint-Alexis, 2024 QCCS 2208 We came across the decision in Sintra inc. c. Municipalité de Noyan, 2019 QCCS 4293 (CanLII), which also deals with this provision, but in the context of an application for an interim injunction from the lowest tenderer attempting to prevent the awarding of the contract to a third party: the Court dismissed the claim, in particular because the tenderer had not lodged a complaint about the process provided for the awarding of the contract, in accordance with section 938.1.2.2 of the Municipal Code of Québec, and concluded that the prima facie case requirement had not been met. Tapitec c. Ville de Blainville 2017 QCCA 317 We would also like to draw your attention to section 573.3.1.4 of the Cities and Towns Act, which is identical to section 938.1.2.2 of the Municipal Code of Québec. We have not found any decisions interpreting this section, so we urge tenderers to be cautious and comply with the complaint process applicable to calls for tenders issued by cities and towns, to avoid having their claim turned down on grounds of a fin de non-recevoir.