Executive Summary: Key Legal and Evidentiary Issues

• Central issue was whether a verbal agreement made Rohan Rajesh Kishnani personally bound, rather than RSP Global Trading Corporation, for over $535,000 in unpaid medical product invoices.
• Evidence about the parties’ licensing status and regulatory requirements for selling medical devices was critical to determining whether Inco could have intended to contract with an unlicensed individual.
• The pattern of payments—bank drafts purchased by Rohan from a joint account funded by RSP—raised doubt about whether he was paying as a personal debtor or merely facilitating corporate payments.
• WhatsApp messages between Rohan, his brother Rohit, and Inco’s vice-president were closely examined to see if they demonstrated a personal contract or an express personal guarantee (cautionnement) by Rohan.
• The court analyzed whether statements such as “I want to pay you” and the inclusion of Rohan’s name on invoices could legally amount to an express suretyship under the Civil Code of Québec, which does not allow guarantees to be presumed.
• A significant procedural issue under article 342 C.p.c. arose from Rohan’s late production of key banking records, leading the court to impose a $2,000 compensation order in Inco’s favour despite dismissing its substantive claim.

Facts of the case

Groupe Inco inc. is an importer and distributor of various goods, including medical instruments and equipment. During the COVID-19 pandemic, it obtained a Health Canada establishment licence to buy and sell medical devices such as masks, gloves, test kits and protective equipment. It is represented in this file by its vice-president and director, Joshua Stanley, who handled sales and business development. RSP Global Trading Corporation was incorporated in April 2021 by Rohit Kishnani, who was its sole shareholder and director. RSP was itself licensed to sell medical products to distributors and licensed entities, but not to the general public. Rohan Rajesh Kishnani, Rohit’s brother, began working for RSP in June 2021 as a commissioned sales representative. His role was to source products for RSP from suppliers and facilitate RSP’s sales to its own customers, earning a commission of 5% to 7% on paid sales. Before RSP’s incorporation, in late 2020, Inco had dealt with Rohan personally for the purchase of non-medical products, including Lysol disinfectant. On that earlier occasion, Rohan had provided his personal banking coordinates and Inco had transferred more than $100,000 directly to his personal account for those non-medical goods. After RSP was formed, the structure of the business relationship shifted. Around October 2021, Inco began buying medical products (gloves and masks) from RSP as a licensed medical device distributor. Joshua verified the corporate register and confirmed that Rohan was neither shareholder nor director of RSP. He was aware that RSP, not Rohan, held the Health Canada licence to sell medical devices. Subsequently, the direction of the trade reversed. Between 18 November 2021 and 29 January 2022, Inco supplied medical products to RSP. Rohan confirmed to Joshua that the purchasing entity was “RSP Global Trading Corp” and later specifically asked that invoices be made out to this company. In practice, Inco’s invoices were addressed to “Rohan Rajesh Kishnani” and “RSP Global trading corporation” together, and its internal records listed RSP as the customer. Over this period, Inco invoiced RSP more than $1.28 million for medical products, of which $535,177.55 remained unpaid. Meanwhile, RSP itself encountered financial difficulty. In June 2023, it served a notice of intention to make an assignment in bankruptcy, listing Inco as an unsecured creditor for approximately $535,176. In light of RSP’s impending insolvency and the unpaid balance, Inco turned its focus to Rohan personally and commenced this civil action in the Superior Court of Québec.

Business relationships and payment arrangements

The way invoices were paid was a major evidentiary point. Several substantial payments to Inco were made through bank drafts purchased in Rohan’s name. For example, on 26 November 2021 and 21 December 2021, Rohan obtained bank drafts payable to Inco in amounts that closely matched specific Inco invoices. Additional drafts and transfers followed in January and February 2022. On their face, these payments suggested that Rohan might be paying Inco “personally” for corporate obligations. However, Rohan testified that the funds came from RSP’s account: Rohit, often abroad, would transfer money from RSP’s corporate account into a joint bank account that the brothers had held for years, and from that joint account Rohan would purchase drafts to pay Inco. Inco objected to this testimony under the best-evidence rule, arguing that only actual bank statements from RSP could establish the source of funds. The court initially took the objection under advisement, then allowed Rohan, at a subsequent hearing, to introduce RSP’s bank statements. These records showed debits from RSP’s account on the same dates, and in nearly identical amounts, as the bank drafts Rohan used to pay Inco. Although the amounts were not always an exact match, the timing and references on the statements supported Rohan’s explanation that he was merely channeling corporate money to Inco. The judge found that this corroborated his version sufficiently to overrule Inco’s objection. The court nevertheless remarked that this payment method—moving corporate funds into a joint personal account and then buying drafts—was unusual and not in line with standard modern commercial practices, especially given the ease of direct electronic transfers. It also noted concerns about the transparency and consistency of Rohan’s testimony, particularly his initial denial that he had personally paid any invoices before being confronted with documentary proof. The evidentiary burden, however, remained on Inco to prove a personal contract or guarantee, and doubts about Rohan’s credibility did not relieve Inco of that burden.

Alleged personal contract for the purchase of medical products

Inco’s primary legal theory was that there was a verbal contract under which Rohan personally bought medical products from Inco. Under the Civil Code of Québec, a contract is formed by the mere exchange of consent between capable parties, and that consent may be express or tacit, but it cannot be presumed. The court had to decide whether the communications and course of dealing showed that Rohan intended to bind himself personally. Inco emphasized that all of its communications about orders ran through Rohan, that he had been its prior individual supplier of non-medical goods, and that its invoices carried his name along with RSP’s. It argued that because Rohan was not a director, officer, shareholder, or employee of RSP, he had no authority to bind RSP and must, therefore, have been contracting in his own name. The court rejected this characterization. First, it accepted that Rohan was acting as a commissioned representative for RSP, authorized to solicit and conclude transactions for the company. The fact that he was not formally an officer or director did not prevent him from serving as RSP’s mandatary. The existence of RSP’s purchase orders and its Health Canada licence in its own name further supported that Inco was dealing with RSP as a company, not with Rohan personally. Second, the judge examined extensive WhatsApp exchanges where Joshua and Rohan discussed inventory, pricing and orders, often using phrases like “I want” or “my company.” Joshua himself routinely used “I” and “my” when clearly referring to Inco, not to himself personally. The court found it would be inconsistent to treat similar language from Rohan as automatically signifying a personal commitment. Third, Joshua knew and admitted that medical devices could only legally be traded at the wholesale level by licensed entities. Since Rohan did not hold a Health Canada licence and RSP did, the court reasoned that Inco must be presumed to have intended to contract with the licensed corporation, not with an unlicensed individual in apparent violation of the regulatory regime. Fourth, the court noted that Inco’s internal documentation identified RSP as the client, and that Joshua had expressly checked the corporate register to confirm who managed RSP. That investigation made little sense if he genuinely believed he had a direct personal contract with Rohan. Taking these elements together, the judge concluded that Inco had not discharged its burden of proving an exchange of consent forming a personal contract between it and Rohan for the sale of medical products. The business relationship was between Inco and RSP, with Rohan acting as RSP’s representative.

Alleged personal guarantee (cautionnement) of RSP’s debt

In the alternative, Inco argued that Rohan had personally guaranteed RSP’s indebtedness. Under article 2333 C.c.Q., a suretyship (cautionnement) is a contract by which a person undertakes toward a creditor to perform the debtor’s obligation if the debtor fails. The Civil Code and case law insist that suretyship must be express and cannot be presumed; courts require a clear manifestation of personal undertaking, often in a distinct clause or section. Inco pointed to several pieces of evidence in support of a de facto guarantee. It highlighted invoices expressly naming Rohan alongside RSP, the fact that he never demanded to have his name removed, and his repeated WhatsApp messages over 2022 and early 2023 telling Joshua that he wanted to pay the balance, that “your balance will be paid this year,” and that he was “trying to get you everything.” Inco’s vice-president also testified that including Rohan’s name on invoices was a deliberate way for Inco to secure a personal “back-up” for RSP’s debt. The court held that these circumstances fell far short of the legal standard for a cautionnement. Simply printing someone’s name on an invoice without their explicit consent does not create a guarantee, particularly when that person queries why his name appears and is told it is only to identify the contact person for the corporate client. The court placed weight on the fact that Inco’s own standard credit-application form contains a specific, standalone guarantee clause clearly designed for individual signatories to bind themselves personally. Joshua admitted that he had never sent this form to RSP or to Rohan. This omission suggested that even Inco understood that a proper personal guarantee required a clearly documented, express agreement. The judge also distinguished cases where shareholders or directors have been found to have personally guaranteed corporate debts, noting that Inco had not identified any authority extending such reasoning to an external sales representative who did not hold an ownership or governance role. As for the WhatsApp assurances—phrases like “I want to pay you” and “your balance will be paid this year”—the court treated them as expressions of commercial intent or reassurance made in the ordinary course of trying to resolve an overdue account, not as an explicit undertaking to answer personally for RSP’s obligations. Since Joshua himself used “I” and “my” without personally binding himself, symmetry and consistency required that similar language from Rohan not be automatically elevated to a binding guarantee. In the court’s view, nothing in the exchanges or documents amounted to an express acceptance by Rohan of a suretyship obligation. Accordingly, the claim that he had guaranteed RSP’s debt failed.

Procedural misconduct and costs under article 342 C.p.c.

Although Rohan prevailed on the substance of the contractual and suretyship issues, the court found that he had committed an important procedural breach within the meaning of article 342 C.p.c. The trial was set for one day and began on 9 May 2025. Part way through Rohan’s cross-examination, Inco sought to file new documents, including detailed evidence of payments made by Rohan via bank drafts. Because of the lateness and significance of that material, the court allowed the documents and adjourned the case to permit Rohan to respond. Between May and the resumed hearing date in July, Rohan produced numerous additional exhibits but did not disclose RSP’s bank statements, even though he already had them on his phone. Only during the continued hearing, after Inco objected to his oral testimony about the origin of funds and invoked the best-evidence rule, did Rohan ask for a mid-hearing suspension to locate and file the corporate bank records. The court granted a recess, and he produced the statements, which the judge eventually admitted over Inco’s objection. This late production consumed the remaining hearing time and left no room for closing oral submissions, forcing the court to order written arguments on a strict timetable, thereby increasing costs for both parties. While recognizing that Inco had also introduced some important evidence late (notably its own payment exhibit), the judge concluded that Rohan’s last-minute filing of the RSP statements, when he had had two months to prepare his evidence after the first hearing day, constituted a significant breach of the obligations of diligence, cooperation and transparency embedded in articles 19–20 and 342 C.p.c. Using the discretionary power conferred by that article, the court ordered Rohan to compensate Inco for some of the additional legal work triggered by his procedural default.

Other procedural issues: non-disclosure of address

At the start of the May hearing, Rohan applied under article 277 C.p.c. for relief from the obligation to provide his residential address, citing threatening messages he said he had received in connection with the case and which he believed were linked to Joshua, though Joshua denied any involvement. The threats were described in counsel’s letter to Inco’s lawyer. The court granted the dispensation at that stage, allowing Rohan to withhold his address from the record. Later, after determining that Rohan was liable only for a modest monetary sanction and that there was no evidence tying Inco or Joshua to any threats, the court revisited the practical implications. To ensure that its judgment could be enforced, it ordered Rohan to provide his residential address to his own counsel and to Inco’s lawyers within five days, while authorizing service of subsequent procedures to be made on his counsel as his representative. This balanced Rohan’s earlier safety concerns with Inco’s legitimate interest in executing the judgment.

Ruling and overall outcome

In its final disposition, the Superior Court dismissed Inco’s main claim in contract and suretyship against Rohan for $535,177.55 in unpaid invoices, holding that he neither personally contracted for the purchase of the medical products nor expressly guaranteed RSP’s obligations. On the merits, Rohan was therefore the successful party and Inco recovered nothing on its substantive commercial claim. However, because of Rohan’s significant procedural misconduct related to the late production of bank statements, the court exercised its power under article 342 C.p.c. to condemn him to pay Inco $2,000, together with legal interest and the additional indemnity from the date of judgment. Court costs (frais de justice) on the action itself were awarded against Inco, and the exact monetary value of those costs is not specified in the judgment. Overall, the outcome is that Rohan successfully resisted personal liability for over $535,000 in alleged debt, while nonetheless being ordered to pay Inco a procedural compensation of $2,000 plus interest and an unspecified amount in costs recoverable by him from Inco.