Executive Summary: Key Legal and Evidentiary Issues

• Characterization of the 10-day period to sign the deed of sale as either a rigorous (fatal) deadline or a flexible, non-rigorous time limit in the context of a promise to purchase and a right of first refusal
• Determination of the true starting point for the 10-day period (email of 30 August 2024 versus formal notice of 7 September 2024) and its legal consequences for the validity of the right of first refusal
• Interpretation and application of the 2020 deed of sale clause granting Collège Reine-Marie a personal right of first refusal over the immovable, and whether that right was validly exercised
• Assessment of whether Placement LFT Inc.’s action in passation de titre, coupled with a pre-inscription on title, was legally founded or instead abusive and irrecevable under articles 51 and 168 C.p.c.
• Evaluation of the evidentiary weight of email exchanges, notarial steps, and brokerage commission arrangements in proving bad faith, delay, or non-exercise of the right of first refusal
• Impact of a properly exercised right of first refusal on the caducity of a third-party promise to purchase and on the continued validity of a pre-inscription registered by that third party

Facts of the case

Placement LFT Inc. (LFT) is a real estate investment company seeking to purchase an immovable owned by École Lucien-Guilbault Inc. (École), a private educational institution. École had itself acquired this property from Collège Reine-Marie (Collège) on 16 October 2020. That 2020 deed of sale contained a clause granting Collège a right of first refusal over any subsequent sale of the immovable. In the summer of 2024, LFT and École negotiated a sale through École’s real estate broker, Benoit Jacques of RE/MAX Harmonie Inc. On 13 August 2024, École issued a counter-proposal to LFT’s promise to purchase, and LFT accepted it on 18 August 2024. The acceptance reached École on 19 August 2024 in Laval, which is treated as the date and place where the contract between LFT and École was formed. The promise to purchase included a clause that the deed of sale had to be signed within 10 days following Collège’s response in the context of the right of first refusal. LFT later claimed $50,000 in damages for costs and delays allegedly caused by École’s conduct and refusal to sign.

Contractual framework and right of first refusal

The 2020 deed of sale between Collège and École contained a detailed “Droit de premier refus” clause. In essence, if École decided to sell the immovable and received a third-party offer it was prepared to accept, École had to notify Collège and give it a priority right to purchase. Where a construction had been erected on the property, École was required to send Collège a copy of the third-party offer along with a written notice granting Collège the right to buy the immovable on the same terms and conditions as the third-party offer. Upon receipt of such notice and the offer, Collège had a 30-day “Période d’acceptation” to inform École whether it would exercise the right of first refusal. If Collège failed to respond or to fulfill the conditions of the offer within that acceptance period, École would then be free to sell to the third party. The clause also provided that if Collège refused or neglected to exercise the right or to fulfill its conditions, “le droit de premier refus et toute acceptation prétendue … deviendra immédiatement nul pour toutes fins que de droit,” emphasizing that the right of first refusal was a personal right granted to Collège and could not be alienated. In the later promise to purchase between LFT and École, clause P 2.3.2 stipulated that the deed of sale “sera signé le ou avant le 10 jours suivant la réponse du Collège Reine-Marie,” thereby tying the timing of the sale to the outcome of Collège’s right of first refusal. Another clause (P 2.3.4) allowed LFT to undertake certain repairs once Collège confirmed that it would not purchase the property.

Procedural history and positions of the parties

In accordance with the 2020 right of first refusal clause, École notified Collège of LFT’s accepted promise on 19 August 2024 so that Collège could exercise its preferential right. On 30 August 2024, Collège’s director general, Dominic Besner, emailed École’s director general stating that he intended to use the “veto” for “la petite maison” and would follow up the following Tuesday. After meeting with its board, Collège sent École a formal written notice on 7 September 2024 confirming that it was exercising its right of first refusal. On 10 September 2024, Collège’s designated notary, Me Sylvain Leduc, sent proof of available funds and requested a copy of the broker’s invoice to complete the file. That same day, LFT served École with a demand letter to “passer titre,” arguing that the 10-day period in the promise to purchase had expired without Collège’s transaction being completed and that Collège’s right of first refusal had therefore become null. LFT took the position that the 10-day period began with Mr. Besner’s 30 August email rather than the formal 7 September notice. Acting on this interpretation, LFT unilaterally signed an act of sale before a notary, deposited the purchase funds in trust, and, on 11 September 2024, registered a pre-inscription (avis de préinscription) against the property, asserting that a future judgment would confer ownership on LFT. École responded by filing a motion to dismiss LFT’s introductory application in passation de titre and damages, seeking rejection for abuse and irreceivability under articles 51 and following, and 168 of the Code of Civil Procedure. École and Collège argued that the 10-day period for signing the deed of sale was not a “délai de rigueur” (fatal deadline) in Quebec law and that Collège had validly exercised its right of first refusal within the 30-day acceptance period. They also attacked the legal foundation and proportionality of LFT’s pre-inscription. LFT, for its part, maintained that the 10-day delay was a rigorous time limit that Collège had failed to respect, rendering its right of first refusal null and reviving LFT’s promise to purchase.

Court’s analysis on the 10-day period and pre-inscription

The Superior Court first recalled the principles governing motions in irreceivability and abuse of process. Alleged facts, but not their legal characterization, are presumed true, and the court must act with caution, rejecting actions at a preliminary stage only in clear cases. The test for abuse is stringent; the action must be manifestly ill-founded, dilatory, or frivolous. Turning to the heart of the dispute, the court examined Quebec case law on time limits for the signing of a deed of sale in promises to purchase, including the 2024 Levasseur c. St-Louis judgment. Those authorities indicate that, in the absence of a clear stipulation to the contrary, a time limit for signing before a notary is not, by itself, a “délai de rigueur.” Whether a delay is rigorous depends on the wording used by the parties and their conduct. Applied to this case, the court found nothing in the 2020 deed of sale or the promise to purchase that converted the 10-day period into a strict, fatal deadline. The context and the behaviour of École and Collège instead showed a shared intent to allow Collège to exercise its right of first refusal and proceed to closing. As to the starting point of the 10-day period, the court rejected LFT’s position that it began with the informal 30 August email. The court held that, given the significant legal consequences for both École and Collège, it was reasonable and correct to treat the formal notice of 7 September 2024 as the operative response triggering any 10-day period, even though, in any event, the period was not rigorous. The court also scrutinized LFT’s use of pre-inscription. Citing prior authority, it emphasized that pre-inscription under article 2966 C.c.Q. is a strict, exceptional, conservatory measure akin to a seizure before judgment, used to safeguard real rights that might otherwise be imperiled. In this case, LFT filed its notice on what it considered to be the eleventh day, based solely on its own strict interpretation of the 10-day deadline, unsupported by jurisprudence. The court viewed this as part of an aggressive litigation strategy rather than the exercise of a well-founded right. Because the underlying theory—that the right of first refusal had lapsed for failure to close within a rigorous 10-day period—was untenable in law, the pre-inscription and the action in passation de titre rested on a flawed legal foundation.

Outcome and implications

Having accepted all the relevant factual allegations as true, the court concluded that this was precisely the kind of clear case in which it must rule on a pure question of law at the preliminary stage. Collège had received École’s notice and the LFT offer within the contractual 30-day window, clearly and formally exercised its right of first refusal on 7 September 2024, and took concrete steps through its notary to complete the transaction. The 10-day period in the promise to purchase was not a rigorous deadline, and even if counted from 30 August 2024, it could not be interpreted so strictly as to invalidate Collège’s right. Because Collège validly exercised its right of first refusal, the LFT promise to purchase—which was expressly conditional on the non-exercise of that right—became caduc (lapsed). As a result, LFT had no enforceable right to demand passation de titre against École and no sustainable basis for its claimed $50,000 in damages. The Superior Court therefore granted École’s motion, declared LFT’s introductory application in passation de titre and damages abusive and irrecevable, dismissed the action, and ordered the cancellation of LFT’s notice of pre-inscription on the property. École Lucien-Guilbault Inc. is the successful party, with Collège Reine-Marie benefiting from the validation of its right of first refusal; the court awarded “frais de justice” (costs of justice) against LFT, but the exact monetary amount of those costs is not specified and cannot be determined from the judgment.