Executive Summary: Key Legal and Evidentiary Issues

• Dispute centers on whether Gestion financière Turgeon inc. can be relieved from the strict inscription deadline (délai de rigueur) after its lawyer miscalculated the six-month time limit under art. 173 and 177 C.p.c.
• The Court had to determine if the plaintiff proved an “impossibilité d’agir” within the meaning of art. 177(2) C.p.c., given the attorney’s negligence and the plaintiff’s own diligence in following the case.
• Prior conduct in an earlier, similar action between the same parties (where the plaintiff was deemed to have discontinued for failure to inscribe) was weighed to see if it showed a pattern of negligence barring relief.
• The seriousness and apparent merit of the underlying loan and hypothec recognition claim, including very high contractual interest rates and an alleged outstanding balance of $433,541.21, were assessed to justify lifting the sanction.
• The Court evaluated prejudice on both sides, particularly the risk that denying relief would cause prescription of the plaintiff’s claim while granting relief would merely allow the defendant to present his defences.
• Judicial discretion was exercised by balancing time elapsed, parties’ conduct, and proportionality in case management, leading to an extension of delay, scheduling orders, and reserving costs to follow the final outcome.

Background and parties

Gestion financière Turgeon inc. is a holding company that brought proceedings in the Superior Court of Québec (Civil Chamber) against Donald Charest, who is an associate in the general partnership Terre du Bois de l’Ail s.e.n.c. (“TBA”), an agricultural operation. The land registry officer (Officier de la publicité des droits) for the Lotbinière land district and TBA were joined as mis en cause because the litigation involves immovable property on which a hypothec was intended to be registered. The case is reported as Gestion financière Turgeon inc. c. Charest, 2025 QCCS 213.

Facts concerning the loan and the alleged hypothec

According to the originating application, Gestion financière Turgeon inc. alleges that around 1 November 2019 it loaned Charest a total of $818,015.55, evidenced by a written loan agreement referred to as exhibit P-7. Part of that amount, $400,000, was to bear interest at 20%, and the balance at 15%. The lender further alleges that Charest agreed, in that same loan convention, to grant a conventional hypothec in its favour over eight immovable lots owned jointly by him and TBA, in order to secure repayment of the debt. The parties also reportedly undertaken to appear before a notary “in the shortest delays” to formalize the agreement by signing the prescribed notarial hypothec documents. The lender maintains the loan was fully repayable at the latest by 6 November 2021, but claims that Charest still owes an outstanding balance of $433,541.21, stated as “à parfaire” (to be adjusted). It further alleges that, despite a formal demand, Charest failed to attend at the notary to sign the hypothecary deed, leaving Gestion financière Turgeon inc. with no registered hypothec on the properties of Charest and TBA to secure its claim. As a result, the underlying main action seeks declaratory and injunctive relief compelling the defendant to sign the required documents to create and publish the hypothec, as well as a monetary condemnation for the alleged outstanding balance.

Procedural history and strict time limit to inscribe

The plaintiff served its originating application in recognition of a conventional hypothec on 10 May 2024. The defendant’s lawyers responded on 21 May 2024, giving notice of an intention to contest and to collaborate in establishing a case protocol. Under the Code of Civil Procedure (C.p.c.), the parties had 45 days to file the protocol. That period expired without either party filing a protocol proposal or engaging in exchanges between counsel. On 6 September 2024, plaintiff’s counsel finally filed a proposed protocol (also notified to the defendant’s counsel the same day). The proposal specified that the inscription for instruction and judgment would be filed within the strict delay set by article 173 C.p.c., noting that this delay normally runs from 20 days after the protocol is filed at the court office, “save in case of case management, court-ordered extension, or late filing of the protocol.” Because the protocol itself was filed after the 45-day period, article 173, read with article 83 C.p.c., meant that the strict inscription period instead expired six months from service of the originating application, i.e. on 11 November 2024. The protocol set 17 September 2024 as the deadline for the defendant’s summary statement of defence. On 24 September 2024, a judge (Michaud j.c.s.) examined the protocol and marked the file as “not retained for case management,” meaning the case would proceed under the usual party-driven timetable and delays.

Discovery of the missed deadline and motion for relief

On 1 December 2024, plaintiff’s counsel wrote to defence counsel, recalling that the protocol had been endorsed and that it had provided a 17 September 2024 deadline for the defendant’s summary of defence. In that same correspondence, he sought collaboration “for the continuation of the proceeding and putting the file in proper state” and attached a draft joint motion to extend the inscription delay, along with another proposed protocol for review and comment. On 5 December 2024, plaintiff’s counsel followed up by email asking for a response. On 6 December 2024, defence counsel replied that in his view any motion to extend would be tardy because the strict inscription date had already expired in November 2024 pursuant to article 173(3) C.p.c.; he stated that since 11 November 2024, the plaintiff must be deemed to have discontinued its action. Upon receiving this response, plaintiff’s counsel realized his error as to the computation of the strict six-month deadline. On 12 December 2024, Gestion financière Turgeon inc. filed a motion asking to be relieved from the consequences of failing to inscribe within the strict time limit and proposing a timeline to put the file in state by 1 May 2025, ahead of a general call of the roll set for 4 June 2025.

Applicable legal framework on impossibility to act and lifting the sanction

The Court framed the issue under the established two-step test developed by the Québec Court of Appeal for motions to be relieved from the consequences of failing to inscribe within a strict delay under article 177 C.p.c. First, the applicant must show an “impossibility to act” within the prescribed delay. Prevailing case law holds that an attorney’s error—whether due to ignorance or even gross negligence—can qualify as an impossibility to act, provided the party itself acted with diligence in overseeing the proceedings. In this first stage, the Court must consider whether the party, distinct from its counsel, has taken reasonable steps to monitor the case. In many instances, this requires a sworn statement by the party, not only by the lawyer whose error directly caused the default. Second, if impossibility to act is established, the Court then exercises a structured discretion considering four factors: (1) prejudice likely to result from granting or refusing relief; (2) the apparent seriousness of the underlying claim; (3) the length of time since expiry of the delay; and (4) the parties’ conduct in the management of the proceedings. The Court noted that when the impossibility stems from counsel’s error, that error may be considered again at this second stage in evaluating the way the case has been conducted.

Evidence regarding the lawyer’s error and the plaintiff’s diligence

Plaintiff’s counsel, Me Philippe Louis Tremblay, swore that he mistakenly believed the inscription delay would only expire on 6 March 2025, because he assumed the six-month period ran from the filing of the protocol on 6 September 2024, especially after the judge’s notation that the case was “not retained” for active case management. He explained that he had left his law firm on 30 May 2024 to restart practice on his own, that there were delays transferring the client’s file to him, and that he was preoccupied with his newborn son’s complicated birth and his partner’s difficult recovery. He stated that he only discovered his miscalculation when defence counsel informed him on 6 December 2024 that the strict delay had already expired, and that he never advised his client in time that the true strict deadline was 11 November 2024. The client, Mr. Gabriel Turgeon (sole shareholder and director of Gestion financière Turgeon inc.), also swore an affidavit. He explained that he had been undergoing treatment, surgeries, and chemotherapy for colon cancer, which significantly reduced the energy he could devote to the file, but that he nonetheless checked regularly on the progress of the case. He said he reasonably relied on his lawyer’s assurances that the file was being properly monitored. According to him, in a telephone conversation in September, counsel told him they might obtain a trial date in 2025 and that the deadline for having the file ready for trial was around 6 March 2025, which he accepted. The defendant responded with his own affidavit, emphasizing that he lived in the same small village as Mr. Turgeon, observed him regularly going about his business and managing multiple rental properties, and therefore doubted that illness had prevented him from dealing with the litigation. However, he did not contradict the specific evidence that the client followed up on the file or that he had been told by counsel that the critical deadline was in March 2025.

Assessment of impossibility to act

The Court found that the missed inscription date clearly resulted from counsel’s miscalculation of the strict six-month period, and that such an error, though negligent, can ground a finding of impossibility to act if the client has been diligent. On the evidence, the Court accepted that Mr. Turgeon, despite health issues, stayed in contact with his lawyer and relied in good faith on his explanations of the relevant deadlines and expected trial timeline. The judge emphasised that impossibility in this context is “relative”; the party need not prove an absolute, insurmountable obstacle beyond its control, but rather that, despite reasonable diligence, the default occurred due to circumstances such as counsel’s serious mistake. The Court also examined the defendant’s attempt to portray the plaintiff as chronically negligent based on an earlier case between the same parties, which had been deemed discontinued (under another file number) when no inscription was filed in time. Although that prior file had progressed through several procedural steps—commencement of proceedings, notice of default judgment, case management hearing at which both sides undertook to conduct examinations and exchange further pleadings, and an examination of Mr. Turgeon—the plaintiff had ultimately allowed the inscription delay to lapse in that earlier action. The Court noted that nothing in the record explained why the earlier action was abandoned, but considered that there was nothing in that history that, by itself, conclusively showed a lack of diligence sufficient to negate impossibility to act in the present, separate file. Taking together the affidavits of counsel and client, the correspondence showing counsel’s efforts to arrange an agreed extension with defence counsel, and the medical and professional context, the Court concluded that Gestion financière Turgeon inc. had met its burden on the first stage and was, in fact, in a situation of impossibility to act within the strict deadline because of its attorney’s error.

Balancing prejudice, seriousness, time, and conduct

Turning to the discretion stage, the Court began with prejudice. If relief were refused, the plaintiff ran a real risk that its loan claim against Charest would be prescribed, because a deemed discontinuance under article 177 C.p.c. causes the original action to lose its interruptive effect on prescription under article 2894 C.c.Q. Denial of relief would therefore likely cause an “irreparable prejudice,” extinguishing the plaintiff’s ability to collect a significant alleged balance of $433,541.21. By contrast, if relief were granted, the defendant would lose no vested right, but would simply have to defend on the merits. The Court recalled that the mere interest in “judicial peace” is not, by itself, a sufficient basis to leave a plaintiff bound by the strict default when the other discretionary factors point toward relief. On the seriousness of the underlying action, the Court was careful, as instructed by appellate authority, not to pre-judge a case that was not yet “in state,” especially given that no defence had yet been filed in this file. The defendant pointed to his summary defence filed in the earlier action, where he had argued that the agreed interest rate should have been 7% and that the 20% rate stipulated in the written loan convention was illegal and “cannot be more than 5%,” and alleged set-off against sums he claimed were due to him. However, he did not assert there that no amount at all was owed. The Court concluded that the lender’s claim—based on a written loan agreement for over $800,000, an alleged outstanding balance in the hundreds of thousands of dollars, and a disputed hypothecary security—was not manifestly ill-founded, frivolous, or devoid of reasonable chances of success. This favoured lifting the sanction. On the time factor, only 31 days had elapsed between the expiry of the strict delay (11 November 2024) and the filing of the motion (12 December 2024), and just six days had passed between counsel’s discovery of his mistake on 6 December and service of the motion, counting a weekend. The Court found these lapses were not excessive and supported relief. Finally, regarding conduct in managing the proceedings, the Court acknowledged that several weeks passed with no step taken after the deadline for the defendant’s summary of defence had expired, and that the plaintiff’s counsel had been negligent in tracking and calculating deadlines. However, the judge stressed that the defendant also took no initiative to move the case forward in that interval. The plaintiff’s representative had monitored the case and credibly relied on his counsel’s assurances about deadlines and progress. Given these circumstances, the Court held that the delays and inactivity were essentially attributable to counsel’s failings and not to any negligence by Gestion financière Turgeon inc. itself.

Outcome, orders, and monetary consequences

Having found both that an impossibility to act existed and that the discretionary factors weighed in favour of relief, the Superior Court granted Gestion financière Turgeon inc.’s motion. The Court formally relieved the plaintiff from the consequences of its failure to file the inscription for instruction and judgment within the strict delay. It ordered the parties to agree, within 30 days, on a case protocol that would bring the file to a ready-for-trial state and, for that purpose, prorogued the inscription deadline to 7 March 2025. It also scheduled the matter for a brief case-management hearing on 7 March 2025, and convened counsel to a practice-roll conference call the day before to confirm the time required. Importantly, the Court expressly reserved court costs, stating that judicial fees would “follow the outcome of this litigation,” leaving any ultimate costs order, as well as any damages or monetary condemnation on the underlying loan and hypothec claim, to be decided at the merits stage. In this decision, therefore, Gestion financière Turgeon inc. is the successful party on the procedural motion, but the Court does not award or order any specific amount of damages, costs, or other monetary relief in its favour, and the total monetary award or costs granted in this judgment cannot yet be determined.