Executive Summary: Key Legal and Evidentiary Issues

• Dispute over whether the seller and its broker breached the civil law duty of good faith in precontractual negotiations by misdirecting emails and failing to clearly flag a tight acceptance deadline.
• Controversy regarding the legal effect of a counter-offer that set a fixed date and time for acceptance, and whether the buyer could rely on an assumed six-day delay from receipt instead.
• Argument about whether the seller’s acceptance of a third party’s conditional offer, and limited disclosure of that competing offer, violated duties of honesty, loyalty and collaboration during negotiations.
• Question of whether the buyer could invoke a fin de non-recevoir (bar to a defence) to neutralize its own late acceptance and treat the counter-offer as a binding promise of sale.
• Failure by the buyer to respect an essential contractual condition requiring a 100,000 $ deposit within five business days of acceptance, undermining the existence of a valid and enforceable promise to purchase.
• Challenge to the buyer’s action in passation de titre given doubts about its ability to actually pay the 9,800,000 $ purchase price and the impact of its preinscription and hypothec on the property’s title and leasing.

Factual background and competing offers

Les Viandes du Breton inc. (VDB), a Québec agri-food company, owned a refrigerated warehouse in Longueuil that it wished to sell to free up capital for other projects. To market the property, VDB retained a real estate broker, Frank Bomba. Gotham Devraker Developments Inc. (Gotham) submitted an initial offer to purchase on 10 July 2020, proposing a price of 8,000,000 $ and fixing 16 July 2020 at 16:00 as the deadline for VDB’s response. VDB chose not to accept but instead prepared a counter-offer, signed on 15 July 2020, with a higher purchase price of 9,800,000 $ and an express expiry of 21 July 2020 at 17:00. Due to a series of emailing errors by the broker, the counter-offer and a follow-up message were repeatedly sent to the wrong “Jean-Philippe” inside VDB rather than to Gotham’s broker. These mistakes meant that Gotham did not actually receive the counter-offer until 20 July 2020 at 13:44, leaving a little more than 24 hours before the stated deadline. During this period, a third party, 8944989 Canada Inc. (Groupe Dumont), submitted its own promise to purchase on 17 July 2020 for the same price of 9,800,000 $. VDB accepted that promise subject to conditions, including that it would only become effective if Gotham’s counter-offer lapsed or was rejected. An annex to the Dumont offer expressly referred to the existing offer from a third party and to VDB’s counter-offer being valid until 21 July 2020 at 17:00, after which the Dumont promise would take effect if the first offer became “caduque”.
Gotham’s broker finally received the misdirected counter-offer on 20 July and briefly acknowledged receipt, but Gotham’s principals did not review it immediately. They only discussed it on 22 July. Gotham then sought a Word version and considered making its own counter-proposal. The company did not sign the VDB counter-offer until 24 July 2020, yet it backdated the signature to 21 July 2020 in an attempt, by admission of its principal, to avoid appearing “in bad faith” for being out of time.

Key contractual clauses and timing conditions

Although the case is not about an insurance policy, it turns heavily on contractual terms that function like strict “policy conditions.” Both Gotham’s original offer and VDB’s counter-offer used hard calendar dates and specific times for acceptance rather than a certain number of days following transmission or receipt. Time was expressly “of the essence,” which in Québec civil law underscores the strictness of deadlines in a commercial transaction for immovables. Gotham argued that the parties had effectively envisaged a six-day delay from reception to respond, pointing to the fact that the expiry dates in both the original offer and the counter-offer were six days after the signing dates. The Superior Court rejected this reading, emphasizing that the text of the instruments did not speak in terms of “x days from receipt” but specified an explicit date and hour; a clear deadline clause cannot be reinterpreted in a flexible way.
Another critical clause in VDB’s counter-offer concerned the structure of the 9,800,000 $ purchase price. It required Gotham to “make a deposit” of 100,000 $ to its notary in trust within five business days of acceptance and to “provide proof thereof” to VDB in the same delay, with the balance of 9,700,000 $ payable at closing. The Court treated these words as creating imperative conditions for a binding promise of sale, not mere logistical modalities. Gotham never made the 100,000 $ deposit within the stipulated time and did not furnish proof to VDB, which the Court found to be a fatal non-compliance with an essential term of the counter-offer.

Alleged lack of good faith and conduct of the parties

Gotham’s central theory was that VDB and its broker had breached their civil law duty of good faith, as codified in articles 6, 7, 1375 and 2805 C.c.Q., during the negotiation stage. Gotham maintained that VDB should have proactively explained the series of email errors, highlighted that only roughly 24 hours remained to accept the counter-offer, and fully disclosed that it had already accepted a conditional third-party promise from Groupe Dumont. Gotham argued that had it known both the tightness of the deadline and the existence of the competing accepted offer, it would have accepted the counter-offer promptly.
The Court acknowledged that the broker committed three consecutive emailing mistakes, sending the counter-offer and related messages to the wrong internal recipient within VDB rather than to Gotham’s broker. However, on the evidence, the judge found these to be genuine, unintended errors and not part of any stratagem to disadvantage Gotham. When the broker finally realized the problem on 20 July, he forwarded the counter-offer to Gotham’s broker, attaching the prior misdirected emails and offering an apology, which the Court characterized as reasonably proactive and transparent in the circumstances. The judge also accepted that in commercial real estate practice, short acceptance periods are not inherently unfair, and Gotham still had more than 24 hours to act once it properly received the counter-offer.
On the existence of the Dumont offer, the Court recognized that precontractual good faith and the broker’s regulatory obligations required informing Gotham of other proposals, at least in existence if not in full content. Here, the broker had in fact sent an email explicitly mentioning that another offer had been received on the property, and that message was later included intact in the 20 July email chain. While better drafting or more emphasis would have been preferable, the Court viewed this as sufficient to satisfy the duty of honesty and loyalty rather than evidence of bad faith concealment.
In contrast, the Court was critical of Gotham’s own conduct. Gotham’s broker and principal waited 48 hours to read a counter-offer they knew was pending in a time-sensitive transaction for a property they considered a strategic opportunity. Their contemporaneous emails showed they were considering submitting a further counter-offer rather than simply accepting VDB’s terms. Most importantly, Gotham’s principal deliberately backdated the signature on the counter-offer from 24 July to 21 July to make it appear that the acceptance was within the prescribed deadline. The Court considered this a more serious lapse of judgment than the broker’s email mistakes attributed to VDB and rejected Gotham’s attempt to paint the narrative as a one-sided “comedy of errors” by the seller side alone.

Limits of precontractual good faith and available remedies

Even if VDB had acted in bad faith during negotiations, the Superior Court held that the remedy in Québec civil law would be damages, not a forced sale. The Court relied on appellate authority emphasizing that abusive or disloyal conduct in precontractual negotiations might lead to liability in damages, but cannot give rise to an action in passation de titre to compel conclusion of the envisaged contract. Good faith duties at the stage of “pourparlers” are meant to frame how parties negotiate, not to strip them of their freedom to contract or not to contract. In this case, the alleged wrongful acts all occurred while the parties were still exchanging offers and counter-offers; no final, mutually binding promise of sale was ever perfected. Gotham did in fact launch a separate damages action later, which the judge noted, but that was not the subject of this particular judgment.

Fin de non-recevoir and failure of conditions in the counter-offer

Gotham attempted to invoke the doctrine of fin de non-recevoir to block what it called a “technical” defence by VDB, namely Gotham’s late acceptance of the counter-offer. The idea was that VDB should not be allowed to profit from any confusion it had helped create around timing and the competing offer. However, the Court explained that the fin de non-recevoir mechanism is used to sanction disloyal or non-cooperative conduct by preventing a party from relying on an otherwise valid claim or defence where doing so would offend good faith and equity. Because the Court found no bad faith or disloyalty on VDB’s part, there was no basis to apply a fin de non-recevoir to neutralize the expiry clause.
Even if such a bar were theoretically available, the judge stressed that Gotham still had to meet all other conditions laid down in the counter-offer to claim passation de titre. Chief among these was the 100,000 $ deposit obligation. Gotham never made this deposit within five business days of its purported acceptance, nor did it provide timely proof to VDB. The Court rejected Gotham’s attempt to treat the deposit clause as a mere payment modality; the language “will make a deposit” and “shall provide proof thereof” was held to create an imperative, suspensive condition for the binding nature of the promise. The failure to comply meant that no valid and enforceable promise to purchase had ever arisen, independent of any discussion on deadlines or good faith.

Ability to pay the purchase price and strict approach due to preinscription

Gotham’s lawsuit was an action in passation de titre seeking a judgment that would stand in for a deed of sale under article 1712 C.c.Q. The Court recalled the classical conditions for such an action: prior mise en demeure, presentation of a deed of sale conforming to the promise, offer and consignation of the full purchase price, and filing of the action within a reasonable time. Those formalities are applied more strictly where a preinscription (preliminary registration) has been published, because that registration is akin to a seizure before judgment and can seriously impact the property.
Here, Gotham had not only published an avis de préinscription on the land title, but also burdened the immovable with a hypothec in favour of its financier. The Court accepted that Gotham had met several preliminary conditions: sending demand letters, providing a draft deed of sale in line with its claimed rights, and filing the action relatively promptly. The real dispute was over whether Gotham had adequately offered and consigned the full 9,800,000 $ and whether it remained able to pay if it won.
The evidence showed that Gotham had obtained a 9,800,000 $ financing from Rainbow Finance Corporation in 2020, with the full amount deposited into its notary’s trust account for a period. Counsel for Gotham also wrote contemporaneously to VDB’s lawyers to say the notary held sufficient funds and that Gotham had already signed an act of sale in anticipation. However, those funds were later returned to the lender. In 2024, a separate entity, Rainbow Capital Investments Limited, deposited two tranches totalling 9,800,000 $ into the trust account of a different notary acting for Gotham, but the notary’s sworn declaration confirmed only that 4,900,000 $ was available on demand, unconditionally, for the purchase. There was no clear financing contract between Gotham and this second corporate funder, and the Court had no evidence of the instructions or conditions tied to the remaining amount.
Given the stricter test applicable when a preinscription encumbers the property, the Court held that Gotham had not convincingly demonstrated that it would actually be able to pay the full price if its action were granted. The earlier, time-limited funding in 2020 did not solve the problem, and the opaque structure and documentation in 2024 left the Court unconvinced that 9,800,000 $ was truly at Gotham’s unconditional disposal.

Relief ordered: title clearing and rejection of abuse claims

Because there was no valid, executory promise of sale and Gotham had not met the conditions of an action in passation de titre, the Superior Court rejected Gotham’s originating application. Without a contractual right or real right to assert against the property, Gotham had no legal basis to maintain either its preinscription or the hypothec registered on the lot. The Court therefore ordered the Land Registrar (Officier de la publicité des droits) to strike both the notice of preinscription and the hypothec from the land register for the specified lot in the Chambly registration division. This had the effect of clearing the title for the benefit of VDB and Groupe Dumont.
VDB and Groupe Dumont had also sought to portray Gotham’s conduct as abusive under article 51 C.p.c., claiming that the filing of the action, the preinscription and the hypothec were reckless tactics that caused serious leasing problems and forced them to incur heavy extrajudicial fees. They asked the Court to order significant monetary compensation for those alleged abuses. The judge emphasized that the legal threshold for abusive proceedings is deliberately high in Québec, to avoid chilling legitimate access to justice. Although Gotham ultimately failed on the merits and its legal theory had “fragile” underpinnings, the case raised serious questions about good faith and contractual enforcement that warranted a full, five-day trial. The Court therefore declined to classify Gotham’s action as abusive, refused to grant the claimed extrajudicial-fee damages to VDB and Groupe Dumont, and treated the financial consequences as limited to ordinary legal costs.
In the end, the successful parties in this judgment are Les Viandes du Breton inc. and 8944989 Canada Inc. (Groupe Dumont), who obtained dismissal of Gotham’s action and an order clearing their property of Gotham’s registrations, together with an award of standard court costs against Gotham. The decision does not fix any specific monetary amount for those costs or any damages, and the total sum ordered in their favour cannot be determined from the judgment alone.