Executive Summary: Key Legal and Evidentiary Issues

• Scope and form of evidence when an application is made to declare counsel “inhabile” (disqualified), specifically whether counsel may respond only by oral statements under his professional oath or must file a sworn declaration.
• Proper application of civil procedure principles of contradiction and prior disclosure (arts. 17, 20, 158 and 268 C.p.c.) to ensure each party can know, prepare for, and answer the lawyer’s version of disputed facts.
• Management of alleged conflicts of interest where a lawyer is said to represent both an individual shareholder and the company in a shareholders’ dispute, in the context of payment of fees from corporate funds.
• Treatment of highly disputed factual allegations said to have arisen during or around a settlement negotiation, raising settlement privilege and solicitor–client privilege concerns.
• Evaluation of whether payment of legal fees from the company and an alleged suggestion to recharacterize such payments as a shareholder advance could amount to a breach of a court engagement and of professional ethics.
• Determination that the existing evidentiary record (mainly spontaneous oral statements under oath in court) was procedurally deficient, requiring supplementation through sworn declarations and potential out-of-court examination before deciding the disqualification motion.

Background and parties

The dispute arises from a falling-out between two co-shareholders of a small Quebec company, Éclipse Pro inc., which provides cleaning services to institutions such as financial institutions. Because of the nature of this work, those involved must have no criminal record or pending criminal complaints. The parties, Carlos Andres Correa Torres (plaintiff) and Cielo Dayana Pazmino Guerra (defendant), were both romantic partners and business partners. Their personal relationship ended in spring 2025, which worsened existing tensions about the management of the company. Mr Correa had already stepped back from management due to criminal proceedings initiated by his ex-wife, leaving Ms Pazmino as the official manager of the company. Negotiations to resolve the shareholder dispute continued until early August 2025, then stalled.

Procedural history leading to the disqualification motion

On 26 November 2025, over three months after negotiations broke down, Mr Correa launched an oppression-type shareholder action against Ms Pazmino, with an urgent safeguard order application. He relied on a “particular context” linked to information allegedly given by an employee of the company, whom Ms Pazmino suspected of being Mr Correa’s new partner. The next morning at 7:00 a.m., a 20-page French-language application, containing 150 paragraphs and 13 exhibits, was served at Ms Pazmino’s home, announcing that the safeguard hearing would proceed the following Monday, 1 December 2025. Mr Correa knew she barely understood French. She only discovered the documents after returning from work that day and scrambled to find counsel. She retained Me Benoit Massicotte, who appeared in court on 1 December 2025 to contest the safeguard order. At this short hearing, Ms Pazmino undertook not to make any “transaction hors du cours normal de l’entreprise” (transaction outside the ordinary course of business) and denied the allegations, with the matter adjourned to 15 December 2025 so she could better prepare. While the parties were at court on 1 December, the accounting department of Me Massicotte’s firm received and deposited a $4,000 transfer from the company’s bank account to pay Ms Pazmino’s legal fees. At that moment, Me Massicotte was in court and, according to him, unaware of this transfer. On 3 December 2025, he signed and notified a notice of representation stating that his firm represented both the defendant, Ms Pazmino, and the company, Éclipse Pro inc. This dual representation went unnoticed by both sides at the time. On 15 December 2025, the parties returned to court. To reassure Mr Correa, Ms Pazmino gave further undertakings to provide corporate, administrative, contractual and financial documents, including bank records for December 2025. These were then provided. On 9 February 2026, the parties attended a four-way settlement meeting, with a translator present for Ms Pazmino. This meeting later became central to the disqualification motion, since it is where the key disputed comments by Me Massicotte were allegedly made about the $4,000 payment and any replacement payment.

Allegations supporting the motion to disqualify counsel

Following the failed negotiations, Ms Pazmino obtained an ex parte protection order against Mr Correa in a separate proceeding, after filing for an order of protection. Mr Correa then amended his main claim on 11 February 2026 to update his complaints. Reviewing the bank documents he had finally obtained, he alleged that Ms Pazmino had dissipated the company’s limited assets and sought reimbursement of amounts he considered improperly withdrawn from the company’s account. On 13 February 2026 at midday, Mr Correa’s counsel sent Me Massicotte a formal demand to withdraw from the file. For the first time, the demand squarely alleged that Me Massicotte represented both Ms Pazmino and the company, even though the parties were in conflict over the company’s management and assets. It also objected that company funds had been used to pay his fees without Mr Correa’s authorization. The demand letter sought full information on “le mode de paiement, la provenance des fonds et les modalités applicables” relating to the legal fees and set a deadline of the morning of 16 February 2026, failing which a motion to declare him inhabile (disqualified) would be brought. Despite this deadline, later that same afternoon, 13 February, Mr Correa notified his motion for disqualification, scheduled for hearing at 9:00 a.m. on 16 February. In substance, the motion alleged that on 1 December 2025 Me Massicotte had his client undertake not to make transactions outside the ordinary course of business, yet allowed or participated in the payment of his fees from the company’s funds that same morning. It also alleged that during, or (according to the motion) “at the conclusion” of, the settlement meeting of 9 February 2026, he told Mr Correa that (1) the $4,000 paid from company funds to his firm had been reimbursed to the company and (2) henceforth Ms Pazmino would have the company make a shareholder advance to her so she could pay his fees. The plaintiff framed this as a grave conflict of interest and a breach of the court undertaking, accusing the lawyer of giving advice designed to “contourner l’engagement” not to use company money outside the ordinary course of business. Mr Correa further suspected that Me Massicotte had assisted his client in preparing the application for a protection order against him, something Me Massicotte denied, but which was also advanced as part of the conflict-of-interest narrative.

Hearing of the disqualification motion and evidentiary difficulties

For reasons not fully explained in the record, the disqualification motion was not heard until 23 February 2026, when another judge set a two-hour combined hearing on both the safeguard order and the disqualification, fixing the hearing for 9 March 2026. At the 9 March hearing, the plaintiff’s counsel formally amended his conclusions to explicitly ask that Me Massicotte also cease acting for the company, based on the notice of representation naming both the individual defendant and Éclipse Pro inc. In response, Me Massicotte proposed to simply amend that notice to reflect what he said was the reality: he had only ever acted for Ms Pazmino, not for the company. Plaintiff’s counsel acknowledged that, in practice, he had never seen Me Massicotte act for the company, and agreed to this correction, insisting it did not alter the substance of the disqualification motion. Under his professional oath in court, Me Massicotte then stated he had not known, on 1 December 2025, that the company had sent a $4,000 transfer to his firm, and he produced documentation showing that he himself had not processed the payment and was in court at the relevant time. The focus then turned to the alleged statements at or around the 9 February settlement meeting concerning reimbursement of the initial payment and the alleged plan to use a shareholder advance to cover legal fees. At this stage, the hearing became tense and highly emotional. Me Massicotte vehemently denied saying anything to Mr Correa about using a new company cheque, structured as a shareholder advance, to pay his fees after the negotiations failed. He claimed the plaintiff’s counsel had “travesti les faits” by shifting the alleged remarks from “during” the negotiation (as initially stated in the demand letter) to “at the conclusion” or “outside” the negotiation (as pleaded in the motion), in order to sidestep settlement privilege and render the alleged conversation admissible. He also invoked solicitor–client privilege to resist revealing what advice he may have given his client about paying fees. Plaintiff’s counsel, also invoking his own professional oath, interjected repeatedly, asserting he had been present and insisting that the contested comments were made “à la sortie” (as the parties were leaving) the settlement meeting, not during it. This immediate back-and-forth between two counsel—both speaking as quasi-witnesses under oath in open court, without prior written statements and with substantial emotion—produced a disordered evidentiary picture. The judge became concerned that the debate was drifting into a spontaneous, unstructured exchange on matters involving settlement privilege, professional secrecy, and the integrity of the administration of justice, all without the usual safeguards of advance written disclosure and properly framed sworn statements.

The court’s procedural concerns and legal analysis

The court emphasised that the Code of Civil Procedure requires judges to ensure that each party is fully and fairly heard, and that the principle of contradiction is respected throughout (art. 17 C.p.c.). It also highlighted the duty of timely and adequate prior disclosure of relevant facts to foster a loyal and orderly debate (art. 20 C.p.c.). In the judge’s view, these principles were not being respected when the lawyer targeted by a disqualification motion responded exclusively through oral declarations under his professional oath, made for the first time at the hearing. This approach deprived the opposing party of any prior knowledge of his detailed version, made it impossible to prepare a focused cross-examination or response evidence, and forced everyone—opposing counsel and the judge included—to react on the spot to new and sensitive allegations. Relying on the court’s case-management powers under arts. 158 and 268 C.p.c., the judge found there was a “lacune” both in the evidence and in the procedure. While nothing in the law prohibits a lawyer from stating facts under his professional oath, the court held that this practice should not be encouraged when a lawyer’s disqualification is sought, given the seriousness of the potential consequences for the lawyer, the client’s right to counsel of choice, and the administration of justice. The judge reasoned that in situations where the motion rests on serious, contested factual allegations not easily resolved by documents—especially when they touch on settlement negotiations and possible breaches of ethical duties—the lawyer’s opposition should be set out in a sworn declaration (déclaration sous serment), optionally supported by exhibits, filed before the hearing. This would allow the other party to know the case to meet, prepare cross-examination, decide whether to conduct an out-of-court examination on the declaration to save court time, and, if needed, file a reply declaration. The court surveyed other disqualification decisions and noted that, while some lawyers had testified under their professional oath and others by sworn declaration, the procedural vehicle had never been squarely addressed. Here, because the motion depended on sharply conflicting accounts of who said what, when, and in what context during or around settlement negotiations, the judge considered that treating the lawyer’s in-court, unscripted testimony as the sole defence would not satisfy the Code’s fundamental procedural principles.

Outcome and next steps

The judgment in this case is not a final ruling on whether Me Massicotte is disqualified or on the merits of the underlying shareholder dispute. Instead, it is a procedural decision setting out how the disqualification issue must be properly presented and proven. The court declared that there was a gap in both the evidence and the procedure and held that the lawyer’s defence to the inhabilité motion could not rest solely on his spontaneous oral statements in court. It ordered Me Massicotte, within two weeks of the judgment, to prepare, notify, and file a sworn declaration, with any supporting documents he deemed appropriate. It then gave plaintiff’s counsel one week to indicate whether he intended to examine Me Massicotte out of court on that declaration, such an examination to occur within 30 days if requested. Finally, it granted the plaintiff 15 days after either receiving the declaration (if there is no out-of-court examination) or after such examination (if it occurs) to file a reply declaration. The parties must then inform the judge of the steps taken so that arrangements can be made to resume and complete the hearing of the disqualification motion. Costs are expressly reserved to follow the eventual outcome of the motion. At this stage, therefore, no party has yet been declared successful on the disqualification issue, and no monetary award, damages, or quantified costs have been ordered in favour of any party; the total amount, if any, that may ultimately be granted cannot be determined from this judgment alone.