On July 4, 2025, in Boudreau v. Dallaire, the Québec Court of Appeal dismissed an application for leave to appeal a decision of the Superior Court, upholding a seizure before judgment of two properties. The Superior Court decision reiterated two fundamental principles regarding seizure before judgment: first, failure to disclose a relevant fact in ex parte proceedings does not automatically lead to the quashing of a seizure before judgment; and second, an objective fear that a claim is in jeopardy, based on sufficient allegations of fraudulent behaviour and poor solvency, can justify a seizure before judgment.
The Court of Appeal ruled that the application for leave to appeal did not raise any question of principle, a new issue or an issue of law that has given rise to conflicting judicial decisions, contrary to the requirements of article 30 para. 2(7) of the Code of Civil Procedure. The Court emphasized that seizure before judgment is a provisional measure intended to protect a claim, and that any questions raised regarding the claim will be decided on the merits. In short, the Court of Appeal held that the conclusions of the Superior Court, which we explore in this article, are consistent with established principles, and that it would not be in the public interest to grant leave to appeal.
Background to the dispute before the Superior Court
Before the Superior Court, the plaintiffs alleged that they lost over $1.4 million in a real estate project as a result of the defendants’ fraudulent tactics. They asked the Court for a declaration that they were the owners of two properties held by one of the defendants or, failing that, damages equivalent to the losses incurred in connection with this “real estate misadventure.”
On November 13, 2024, alleging that the defendants were preparing to sell these properties and that their claim was in jeopardy, the plaintiffs obtained court authorization to proceed with a seizure before judgment of the two properties.
On April 29, 2025, the defendants challenged the seizure before judgment of the properties and brought an application for it to be quashed. They argued that: 1) the plaintiffs failed to disclose a relevant fact to the court, namely that they had filed a notice of advance registration of their judicial application against the properties, and 2) the evidence in support of the seizure was insufficient, as the plaintiffs had failed to demonstrate that the defendants were unable to pay the damages claimed, even if both properties were sold during the course of the proceedings.
Decision
The Superior Court dismissed the defendants’ application, relying on two important principles regarding seizure before judgment.
1. A party’s failure to disclose a relevant fact to the court on an application for seizure before judgment does not necessarily result in the seizure being set aside
First, the Superior Court noted that, in order to rule on an application to quash a seizure, it is necessary to examine both the circumstances and consequences of a failure to disclose a relevant fact. In support of this approach, the Court cited Marciano (Receiver of), in which the Court of Appeal set out specific criteria that courts must consider, including: 1) the importance of the omitted facts to the issues in dispute; 2) whether the omission was unintentional, the relevance of the facts was misconstrued, or there was an intention to mislead the court; 3) the prejudice to the party subject to the ex parte order; and 4) whether the decision would have been different in light of the omitted facts.
The Superior Court acknowledged that the existence of a notice of advance registration on the properties was an important fact that should have been disclosed to the court. This information was particularly relevant for determining whether the defendants’ claim was jeopardized and whether the conditions for seizure before judgment had been met. However, the Court ruled that this omission was unintentional and attributable to a change of attorneys who were unaware of the notice prior to their involvement, and that it did not reveal any intention to mislead the court.
Moreover, the defendants did not demonstrate that they had suffered any actual prejudice as a result of this omission. The Superior Court rejected the defendants’ argument that advance registration offers protection equivalent to seizure before judgment. Unlike a seizure, which places the properties under the control of the courts, advance registration does not block their disposal nor guarantee that they will remain in the same condition during the proceedings, especially since the defendants had encumbered the properties with a mortgage without the plaintiffs’ knowledge. On this point, in its ruling on the application for leave to appeal, the Court of Appeal noted that these remedies would be at most redundant, but not conflicting.
Finally, given the allegations of fraud, links with organized crime, and the defendants’ lack of assets, the Superior Court concluded that the seizure before judgment was necessary to protect the plaintiffs’ claim, in addition to the publication of the notice of advance registration, and that the failure to disclose the latter did not justify setting aside the seizure.
2. An objective fear that a claim is in jeopardy based on the defendants’ poor solvency is sufficient grounds for a seizure before judgment
In this case, the properties in question were the defendants’ only valuable assets, as they had no significant personal property other than a car lease. The Superior Court also noted that two of the defendants were of questionable solvency, one facing civil proceedings totalling over $100 million, and the other being involved in 26 lawsuits. These facts supported the conclusion that, at the time of the seizure, there was an objective fear that the plaintiffs’ claim was in jeopardy. The Court therefore rejected the defendants’ second argument.
Conclusion
The Superior Court’s decision, endorsed by the Court of Appeal, confirmed two fundamental principles regarding seizure before judgment. First, failure to disclose a relevant fact in ex parte proceedings does not automatically lead to a seizure before judgment being set aside. The court must assess the circumstances of the omission, whether it was intentional or not, and whether the party subject to the order suffered any prejudice as a result. Second, an objective fear that a claim is in jeopardy, based on sufficient allegations of the defendant’s fraudulent conduct, poor solvency, and lack of sufficient assets, can justify a seizure before judgment.
These judgments also confirmed that the protections afforded by a notice of advance registration do not always suffice to protect against the risk of dissipation of assets by a defendant. In such cases, seizure before judgment may be appropriate in addition to a notice of advance registration to preserve a party’s rights without the two remedies conflicting.
The authors would like to thank law student Mariya Teodosieva for her valuable contributions to this article.