Executive Summary: Key Legal and Evidentiary Issues

• Timely inscription for instruction and judgment under article 177 C.p.c. and whether the plaintiff could be relieved from the sanction of presumed discontinuance
• Effect of counsel’s error or gross negligence on a party’s “impossibility in fact to act,” and the extent to which the client’s own diligence must still be demonstrated
• Impact of multiple related files, shared parties, and overlapping conference de règlement à l’amiable (CRA) on the computation and management of procedural delays
• Legal significance of post-CRA settlement discussions and suspensions in other related files on the plaintiff’s reasonable belief that this file was also suspended
• Prejudice arising from refusal to relieve the plaintiff from default, including prescription of the recourse and the apparent seriousness of the underlying hypothecary action
• Defendant’s preserved right to seek compensation and raise alleged procedural abuses at the hearing on the merits despite the lifting of the default

Factual background

Construction CRG inc. is a construction company that registered a legal construction hypothec for an amount of $527,927 against an immovable owned by Les Immeubles KEJJM inc. It then instituted proceedings seeking forced surrender (délaissement forcé) and sale under judicial control of the property to enforce that hypothecary security. The plaintiff’s action is therefore a hypothecary remedy anchored in construction and real estate law, in which it seeks to realize on a registered legal hypothec following work it claims to have performed and invoiced. The litigation does not turn on insurance or contractual policy wording but rather on the validity and enforcement of a construction legal hypothec and the procedural steps required to move the matter toward a determination on the merits.
The dispute arises in a broader litigation context. Construction CRG inc. is involved in several disputes, some of which have been judicialized, and these files involve a mix of three corporate entities and four individuals. Many of these matters intersect commercially, creating a web of related conflicts and separate proceedings. Since 2022, Construction CRG inc. has been represented by the law firm Services juridiques Inter-Rives and, within that firm, by at least two different lawyers over time. This turnover and the multiplicity of related files form part of the backdrop to the misunderstanding that ultimately gave rise to the present procedural issue.

Procedural history and missed delay

Under the Code of Civil Procedure of Québec, a plaintiff must bring the file to a state of readiness within six months by seeking inscription for instruction and judgment. This six-month delay is one of strict rigour (délai de rigueur), and article 177 C.p.c. provides that, if the inscription is not sought within the prescribed time, the plaintiff is presumed to have discontinued the action, unless another party inscribes within 30 days of expiry. The court nonetheless retains a discretionary power to lift this sanction if it is convinced that the plaintiff was in fact unable to act within the time limit. In that event, the court may modify the case protocol and set a new, non-extendable delay absent compelling reasons.
In this case, the deadline for Construction CRG inc. to request inscription expired on 8 November 2024. The file was not inscribed in time, so the statutory presumption of discontinuance under article 177 C.p.c. was triggered. Subsequently, on 11 December 2024, the defendant Les Immeubles KEJJM inc. obtained a certificate of discontinuance of the action in conservation of certain legal hypothecs. The plaintiff later moved for relief from its default and sought annulment of that certificate, prompting the present judgment by the Superior Court.

The plaintiff’s explanation for its default

Construction CRG inc. argued that it should be relieved from default because it was, in fact, unable to act within the meaning of article 177 C.p.c. It pointed to the complexity and multiplicity of its related matters, as well as the way its lawyers had managed those files. Dozens of files existed, many judicialized, and they involved overlapping corporate and individual parties. This complex litigation landscape, spread among at least three corporations and four individuals, was being handled by the same firm, Services juridiques Inter-Rives, which had more than one lawyer working on the plaintiff’s matters.
Of particular importance were events in late September 2024. On 25 and 26 September 2024, a conference de règlement à l’amiable (CRA) was held to attempt to resolve four files involving Construction CRG inc., including the present one. Three of the four files were settled. The remaining file was this hypothecary action. However, three of those files had been formally suspended until 8 November 2024 in order to allow the CRA process to proceed on a common basis with the present case. Because the majority of the files were formally suspended, and because the CRA covered all four matters, the plaintiff formed the belief that the present case was also effectively on hold through December 2024 while negotiations continued.
This understanding was, according to the plaintiff, reinforced by discussions with its lawyers. The plaintiff believed that active settlement discussions following the CRA meant that the file was being managed and that no immediate procedural step, such as inscription, was required. Compounding this, one of the plaintiff’s lawyers at Inter-Rives left the firm a few weeks before the CRA, creating a change in file management. The continued negotiations between counsel through to December 2024 gave the plaintiff a sense of security that the file was advancing toward resolution without the need for immediate formal steps on its part.
The plaintiff stated that it only learned on 28 December 2024 that its understanding was mistaken. On that date, its counsel, Me Plourde, informed it that, on 20 December 2024, he had noticed the inscription delay had expired without an inscription being filed. The plaintiff then instructed that steps be taken quickly to remedy the situation.

The defendant’s opposition and allegations of negligence

Les Immeubles KEJJM inc. opposed the motion, characterizing the plaintiff’s conduct and that of its counsel as grossly negligent. It noted that, on 22 October 2024, it had sent a communication to the plaintiff’s representatives inviting them to seek an extension of the inscription delay and that this warning appeared alongside other requests in a single email. It also relied on the fact that it had obtained a certificate of discontinuance on 11 December 2024, prior to any move by the plaintiff to regularize the situation.
The motion for relief from default was served on 3 January 2025, almost two months after the expiry of the inscription delay. The defendant argued that this sequence showed a lack of diligence and that the plaintiff’s pursuit of the action was neither serious nor substantive, but purely dilatory. On this view, refusing to relieve the plaintiff from default would cause it no unfair prejudice because the action lacked merit and should fail in any event.

Applicable legal framework

The Superior Court reviewed the governing principles under article 177 C.p.c. and the case law of the Court of Appeal. The court emphasized that the analysis proceeds in two stages. First, the plaintiff must demonstrate that it was in fact unable to act within the prescribed time. Second, if impossibility is shown, the court must exercise its discretion to determine whether, in light of the evidence and the circumstances, it should actually grant relief from default. In that second stage, case management objectives, procedural rigor, and the promotion of a culture of diligence must all be balanced against the fundamental right of access to the courts and the right to be heard.
The court noted, in line with Court of Appeal authority, that the error, incompetence or even gross negligence of a lawyer can constitute an impossibility in fact for the represented party, provided the party itself has acted diligently in the management of its case. Jurisprudence such as Heaslip v. McDonald confirms that it would be illogical to distinguish simple error from gross negligence in this context and that, in both cases, the lawyer’s conduct can translate into impossibility for the client, subject to an assessment of the client’s own diligence. At the same time, the discretion conferred by article 177 C.p.c. is not automatic; judges must also safeguard efficient case management and the timely conduct of proceedings.

Findings on impossibility to act

On the first issue, the Superior Court found that Construction CRG inc. had indeed been in a situation of impossibility to act within the meaning of article 177 C.p.c. The court acknowledged that the mere fact that counsel were handling many files for the same client is not, by itself, a convincing reason to excuse non-compliance with a strict delay. However, in this case, that factor was combined with the specific procedural configuration of four closely related files, three of which were formally suspended until 8 November 2024 to enable a common CRA with the present case.
Three of the four CRA files were later settled, leaving only this dispute unresolved. Yet discussions between counsel continued even beyond the expiry of the inscription delay and into December 2024. This, along with the shifting of responsibility among lawyers at Inter-Rives and the overall tone of negotiations, reasonably reinforced the plaintiff’s belief that its file was proceeding toward resolution and that the deadline was either suspended or not yet critical. The court found there was clear error or negligence by the plaintiff’s lawyers in computing and managing the time limits. That professional failing, in the particular factual circumstances, placed the plaintiff in an impossibility to act.
Crucially, the court held that the plaintiff itself could not reasonably be expected to detect that the inscription delay had lapsed. There was visible activity on the file—participation in the CRA, subsequent discussions, and interactions with counsel—which supported its good-faith belief that the case was still being actively shepherded through the system. The plaintiff’s misapprehension therefore resulted from its lawyers’ error rather than from its own indifference or passivity. The court rejected the notion that the plaintiff’s conduct amounted to negligence. Accordingly, the first step of the analysis—demonstrating impossibility to act—was satisfied.

Exercise of judicial discretion and assessment of prejudice

Turning to the second stage, the Superior Court considered whether it should exercise its discretion to relieve the plaintiff from default. A key factor was the gravity of the prejudice that would befall the plaintiff if relief were refused. Because the missed inscription would cause the recourse to be prescribed, the plaintiff would lose its hypothecary action entirely. The court characterized this as a serious and undeniable prejudice.
The court also looked at the apparent seriousness of the action based on the allegations of the introductory application. While the defendant maintained that the claim was weak, dilatory, or doomed to fail, the judge was not prepared to accept that characterization at this procedural stage. Relying on the face of the pleadings, the court held that the plaintiff’s recourse appeared serious enough to justify being heard on the merits, rather than being extinguished by a procedural misstep primarily attributable to counsel.
Another central consideration was the speed and diligence with which the error was addressed once discovered. After noticing the problem on 20 December 2024, the plaintiff’s lawyer informed the client on 28 December 2024 and immediately began preparing the motion to be relieved from default, even during the holiday period. The motion was then served on the defendant on 3 January 2025, less than two weeks after the lawyer discovered the mistake. The court viewed this reaction as diligent and consistent with the notion that the plaintiff wished to pursue its claim actively.
In addition, the judge underscored that the plaintiff had participated in the CRA in September 2024 and maintained discussions with the defendant’s lawyer through December 2024. These facts further supported the conclusion that the plaintiff was not indifferent to the course of the proceedings and that it reasonably believed the file was progressing. Under these circumstances, denying relief would produce an obvious injustice by sacrificing a potentially meritorious claim to a rigid application of procedural deadlines, even though the legislative scheme does allow flexibility when genuine impossibility is demonstrated.

Outcome of the motion and reserved rights

Having accepted both that impossibility to act was established and that discretion should be exercised in the plaintiff’s favour, the Superior Court granted Construction CRG inc.’s motion. The court relieved the plaintiff from its default in failing to file the inscription for instruction and judgment within the original delay and extended the deadline by a further three months from the date of the judgment. This new delay was set in accordance with the remedial mechanism contemplated by article 177 C.p.c.
The court also annulled the certificate of discontinuance issued on 11 December 2024 with respect to the action in conservation of certain legal hypothecs. By doing so, the judge effectively revived the proceeding and restored the plaintiff’s ability to pursue its hypothecary claim on the merits, including its request for forced surrender and judicial sale of the immovable. However, the court explicitly reserved the defendant’s rights to seek compensation or other remedies at the hearing on the merits based on the alleged shortcomings and procedural mismanagement it attributes to the plaintiff and its counsel. The judge considered that only a full evidentiary record at trial would allow a complete and global assessment of those issues. Finally, the judgment leaves the issue of costs to follow the cause, meaning that court costs will be determined at the merits stage.
In this procedural decision, the successful party is Construction CRG inc., which obtained relief from default, restoration of its action, extension of the inscription delay, and annulment of the certificate of discontinuance. No monetary damages, lump-sum costs, or quantified compensation are awarded at this stage; the court expressly reserves costs and any potential compensation to be decided at the hearing on the merits. As a result, while the plaintiff emerges as the successful party in this interlocutory ruling, the total monetary award or costs in its favour cannot yet be determined from this judgment alone.