Executive Summary: Key Legal and Evidentiary Issues

• Limitation periods and discoverability for disability insurance miscalculation, tax treatment of benefits, and alleged underpayment of long-term disability benefits
• Effect of prior judgments (res judicata) on re-litigating the claimant’s choice of coverage option and earlier findings about the insurer’s conduct
• Credibility and timing of the claimant’s reliance on “new” evidence (piece D-23) concerning communications between the insurer and employer
• Sufficiency of factual allegations to establish a contractual or delictual fault by the insurer in relation to benefit calculation, return-to-work management, and alleged complicity in the dismissal
• Threshold for declaring a civil action abusive under articles 51 and following C.p.c. where a reasonable person would see no legal foundation for the claim
• Criteria for designating a party as a vexatious litigant (plaideur quérulent) and imposing prospective filing restrictions against further proceedings

Factual background

Daniel Tanguay was an employee of the National Bank of Canada (BNC) covered under a group disability insurance plan administered by Industrielle Alliance, assurances et services financiers. Following the onset of disability, he began receiving long-term disability benefits calculated on the basis of an “assurable salary” that had been fixed since January 2013 and treated as taxable income by both the insurer and tax authorities. Over time, disputes arose about the proper level of coverage, the calculation of his disability benefits, the coordination of those benefits with public benefits from Retraite Québec (formerly RRQ), and the tax treatment of the payments. Tanguay also challenged how the insurer managed his proposed gradual return to work, claimed it had become complicit in his eventual dismissal by BNC on 11 January 2017, and accused it of obstructing his rehabilitation. In parallel, after Retraite Québec granted him disability benefits retroactive to 1 June 2017, Industrielle Alliance sought reimbursement of an overpayment, ultimately suing him in the Court of Québec for a $21,569.51 overpayment of disability benefits. That separate action resulted in a judgment ordering Tanguay to reimburse the insurer; the present Superior Court judgment treats that order as part of the factual and procedural background rather than re-opening it.

Prior proceedings

The parties’ conflict did not start with the 2025 claim that is the subject of this judgment. In December 2017, Tanguay sued both Industrielle Alliance and BNC in the Superior Court (file 700-17-014787-179, referred to as the “CS file”) seeking a retroactive and future increase of his disability benefits. He argued that he had selected an option providing 75% of his insurable salary, indexed, rather than the basic 50% protection. After trial in September 2022, the Superior Court rejected his claim. The Court found, among other things, that he had failed to exercise the higher-coverage option within the prescribed enrolment period, that he knew by December 2012 he had only 50% basic coverage, and that his own inaction or negligence explained the coverage in force. The judgment also noted his vindictive and retaliatory attitude, particularly his stated intention to use the defence evidence to fuel further litigation against BNC. Shortly before and after that trial, Tanguay focused intensely on a particular defence exhibit, “piece D-23,” a coded record of calls involving him. He later claimed that D-23 had not been provided to him before the hearing, but the Court found it had been notified to him four times between October 2020 and September 2022. In September 2022, he sought to re-open the evidence in the CS file, arguing he had not received D-23. The Superior Court rejected that request and, in the same time frame, warned him explicitly about the risk of being declared abusive or quérulent if he continued to launch further proceedings on the same themes. Separately, in the Court of Québec (file 700-22-043237-212, the “CQ file”), Industrielle Alliance sued in 2021 to recover the $21,569.51 overpayment, arising because his Retraite Québec benefits were granted retroactively. In April 2023, when the matter was set for hearing, Tanguay attempted to file a late defence and a $1.4 million counterclaim against the insurer, alleging collusion with BNC, obstruction of a progressive return to work, and mismanagement of his insurance file. The Court of Québec refused leave to file that late contestation and reconventional demand, found there was no serious defence to the overpayment claim, and allowed the insurer’s claim, again warning that his procedure approached the threshold of abuse.

Current claim before the Superior Court

Despite those warnings and adverse judgments, Tanguay commenced a new Superior Court action against Industrielle Alliance on 20 September 2025, framed as a Demande en dommages et intérêts under articles 1458, 2396 and following, and 2500 and following of the Civil Code of Québec. He alleged that the insurer had breached its contractual obligations, committed omissions and inaccuracies that had grave fiscal, financial and personal consequences, failed to represent him adequately, become complicit in his dismissal without cause by BNC, and produced incomplete or inaccurate documents, including D-23 and “other” documents. He sought $3.5 million in damages and asked that the Court order the insurer to produce all outstanding relevant documents. In October 2025, he also filed an application to revoke the 2022 Superior Court judgment in the CS file, claiming that the decision rested on a decisive piece, D-23, which his former lawyer had allegedly failed to transmit to him, thereby undermining the administration of justice. By December 2025 and January 2026, he had twice amended his 2025 damages claim against Industrielle Alliance, each version adding or altering allegations, though all iterations targeted the same core conduct. For clarity, the Court refers collectively to all three iterations as the “Demande principale.” In January 2026, the insurer responded by filing a consolidated application seeking dismissal in irrecevability, striking out the action on grounds of prescription and res judicata, and asking the Court to declare the claim abusive and to declare Tanguay a vexatious litigant (plaideur quérulent) under articles 51 and following, and 55 C.p.c.

Policy terms and contractual framework

The dispute sits at the intersection of group disability insurance and general contractual obligations under Quebec civil law. The group policy had a FlexiPlan-style structure under which the employee could choose between basic coverage (50% of insurable salary) and higher options, such as 75% of insurable salary with indexation. The earlier CS judgment had already held that by failing to make the election within the designated enrolment window in November 2012, Tanguay remained with the basic 50% option, notwithstanding his later claim that he believed he had 75% coverage. The policy also specified that long-term disability benefits were taxable. For over a decade, Industrielle Alliance and the tax authorities treated the payments as taxable, sending T4A slips reflecting taxable income and withholdings accordingly. In 2019, the insurer sent a letter adjusting his monthly benefits in light of the newly granted Retraite Québec disability pension, setting out both the gross disability amount and the net insurer share after deduction of public benefits. That letter erroneously stated that the insurer’s disability benefits were not taxable, an assertion the insurer later characterized as a mistake. The Court emphasised that the contract had always provided that the benefits were taxable and that Tanguay had long received tax forms evidencing that treatment. Finally, the policy permitted integration of public disability benefits and recovery of overpayments resulting from retroactive awards by the public scheme. It was under this framework that the insurer pursued the $21,569.51 overpayment in the CQ file, and the Court of Québec accepted that legal basis.

Findings on prescription and res judicata

In addressing the insurer’s preliminary application under article 168 C.p.c., the Superior Court first confirmed that the procedural requirements for bringing an irrecevability motion had been met. The focus then shifted to whether, assuming the pleaded facts true, the Demande principale could legally support the claimed relief. The Court concluded it could not, for two principal reasons: prescription and res judicata. On prescription, the Court held that all of the alleged wrongful acts either occurred more than three years before the filing of the 2025 claim or were known (or reasonably should have been known) to Tanguay long before 2025, thus triggering the three-year limitation under Quebec civil law. The allegedly erroneous “new” calculation of disability benefits, including the impugned taxable benefit status and the underlying insurable salary figure (approximately $75,600), had been in place since 2013, and he had accepted and litigated that baseline in earlier proceedings. The 2019 letter that mistakenly described the employer-provided disability benefits as non-taxable should, in the Court’s view, have alerted him to the issue at that time, not six years later. Any challenge to the calculation or tax treatment was therefore prescribed by 2022 at the latest. Claims arising from the 2017 dismissal and the alleged complicity of the insurer in that termination were likewise time-barred, as the dismissal occurred on 11 January 2017 and no plausible reason was given for not acting within three years. As for his argument that D-23 constituted “new” evidence reviving his rights, the Court pointed to its own earlier finding that he had received D-23 as early as October 2020 and again multiple times before the 2022 CS trial. Any claim grounded on that exhibit was thus also prescribed. On res judicata, the Court stressed that certain issues had been definitively adjudicated in the earlier CS judgment, notably the conclusion that his failure to select the higher-coverage option in 2012 was his own responsibility and that he knew by December 2012 he had only 50% basic coverage. Having chosen not to appeal that judgment, he could not now re-plead that question in a new action or indirectly attack it through a fresh damages claim. To the extent his 2025 allegations attempted to revisit the same coverage-option issue or to refashion previously rejected arguments about the insurer’s obligations under the policy, the Court found those parts of the claim barred by res judicata as well as prescription.

Abuse of process and quérulence

After finding the Demande principale irrecevable, the Court turned to the abuse-of-process request under articles 51–54 C.p.c. It adopted the standard that an action is abusive when, viewed objectively, a reasonable and prudent litigant in the same circumstances would conclude there is no legal foundation for the proceeding. Tanguay’s new action, in the Court’s assessment, re-packaged issues that had been decided in prior judgments or that were plainly out of time, and it did so without pleading concrete, credible facts establishing a fault by the insurer or causation of the massive $3.5 million loss he claimed. He also failed to offer any coherent explanation for why he waited years to sue over events and documents he had known about since at least 2019, if not earlier. In light of this, the Court held that the action was not only prescribed and unfounded but also abusive, clearly doomed from the outset. It therefore declared all iterations of the Demande principale abusive within the meaning of article 51 C.p.c. The Court then considered whether his overall litigation conduct justified a declaration of quérulence under article 55 C.p.c. Applying the recognized criteria for vexatious litigants, the judge highlighted several features of Tanguay’s conduct: he systematically acted as a plaintiff rather than a defendant; he multiplied proceedings on overlapping factual bases; he repeatedly attempted to re-litigate matters already decided by the Superior Court and the Court of Québec; he advanced inventive but legally incongruous arguments, including reliance on provisions such as article 2503 C.c.Q. and certain procedural articles that did not apply to his situation; he sought very large monetary awards out of proportion to the alleged harm; he pursued a retraction of the 2022 Superior Court judgment three years after it was rendered; and he did all of this self-represented, despite explicit prior warnings about abuse. In aggregate, these factors led the Court to conclude that he met the profile of a quérulent litigant, at least in relation to Industrielle Alliance.

Outcome and orders

Having found the Demande principale prescribed, unfounded in law, and abusive, the Superior Court allowed the insurer’s application in full. It rejected the damages action in all its versions, formally declared the action abusive under articles 51 and following C.p.c., and declared Daniel Tanguay a vexatious litigant vis-à-vis Industrielle Alliance. Exercising its power under article 55 C.p.c., the Court imposed a broad filing injunction: Tanguay is prohibited from filing any new proceeding or any procedural step of any kind against Industrielle Alliance in the Superior Court, the Court of Québec, or before any tribunal or administrative body subject to Superior Court superintending control, unless he first secures written authorization from the appropriate chief judge or designated official. Court officers are ordered to refuse to file any such unauthorized proceedings, and any non-compliant filings must be struck. The Court also awarded costs (“frais de justice”) against Tanguay in favour of Industrielle Alliance and reserved to the insurer the right, under article 54 paragraph 2 C.p.c., to later quantify and prove any additional damages it suffered as a result of the abusive proceedings at a separate hearing. Because this judgment does not itself fix a dollar amount for such damages and the quantum of costs is not specified in the text, the total monetary award in favour of the successful party cannot be determined from this decision alone.