Quebec man “returned” from his “legal” death

Sometimes a person who has been legally declared dead is not dead.

In a remarkably rare turnabout, a Canadian insurer successfully convinced Quebec Superior Court to annul a judicial declaration of death of a Montreal man who disappeared in 2008 after reliable signs of life were uncovered, freeing it of its obligation to pay $500,000 in life insurance.

“There is not much that has been written about such cases because they are exceptional,” noted Josianne Gelfusa, a Montreal notary with D & G Notaries, who co-wrote a chapter on absence and death for the book Droit des personnes physiques (Law of natural persons). “So there is not much case law to assist judges.” Continue reading “Quebec man “returned” from his “legal” death”

University can recoup pension monies

Carleton University won the right to reclaim nearly $500,000 in pension benefits made to a former political science professor who was missing for years before his remains were found in the woods near his Quebec home after the Quebec Court of Appeal held that the pension plan plainly states that the benefits ceased when the beneficiary died.

The ruling, which essentially upheld a lower court ruling but not for the same reasons, appears to have broadened the scope of several Civil Code of Quebec provisions by applying a “generous and liberal interpretation” to unjust enrichment and the legal presumption surrounding absentees, according to legal experts.

“The decision has broadened the understanding of how payments of undue amounts works,” noted Montreal pension lawyer Tina Hobday of Langlois Lawyers LLP.

George Rosme was 77 years old and suffering from early-stage Alzheimer’s disease when he went missing from his farm north of Gatineau in September 2007; an extended air and ground search failed to locate him.

Rosme, who was receiving pension benefits of about $6,000 per month from Carleton University, elected to receive a “life only” pension when he retired in 1996. Under that option, he received increased monthly pension benefits for his remaining lifetime but it required him to waive his rights to any benefits that might otherwise be payable to his beneficiaries, estate or heirs.

The university did not know Rosme was missing until a local newspaper article about the case appeared in January 2009. Two months later, the university’s pension manager wrote to Rosme’s universal legatee and former de facto spouse, Lynne Threlfall, informing her that the university was going to stop paying his monthly pension payments because “there are reasonable grounds to believe Professor Rosme passed away in September 2007.”  The university also sought the return of $70,000 in overpayment.

Threlfall, through her notary Sylvie Arsenault, pointed out that she was designated as tutor to the absentee, and that under article 85 of the Civil Code Rosme was presumed to be alive for seven years following his disappearance, and therefore the university could not terminate the pension payments. On December 2009 the university resumed the pension payments.

But on July 2013 a dog discovered Rosme’s remains in dense woods near his home. The coroner, who  recorded the death as taking place sometime in 2007, said there were no signs of foul play or suicide and that it was likely natural or accidental. The Quebec Registrar of Civil Status certified the act of death as having occurred on the day that he disappeared.

Carleton University then launched a $497,000 lawsuit against Threlfall personally as well as in her capacity as liquidator of the estate and as tutor to the absentee. In a brief ruling Quebec Superior Court Justice Martin Bédard ordered Threlfall to reimburse the university the pension benefits paid to Rosme, with legal interest. The trial judge held that the payments should have ended when Rosme died and not when he was found in 2013.

Threlfall appealed, arguing that the trial judge misinterpreted the contractual terms of the pension plan, misconstrued the presumption that Rosme was alive by holding that it was rebutted with retroactive effect, and that the judge could not order restitution because articles 1491 and 1492 of the Civil Code were not met.

In a 31-page ruling, the Quebec Court of Appeal unanimously held that under the pension plan’s “life only” option the university owed a contractual duty to pay Rosme monthly benefits until his death in 2007. Threlfall’s contention that under article 85 of the Civil Code the date of “proof of death” or when the act of death was certified was the relevant date for fixing the end date for entitlement to the pension too was dismissed.

“The presumption is temporary,” held appeal court Justice Nicholas Kasirer in Threlfall c. Carleton University 2017 QCCA 1632. “Not only is the simple presumption limited in time, it is protective in character: it is put in place so that the interests of absentees, and persons connected to them, will be preserved until the certainty as to whether they are dead or alive is lifted. The court may confer a tutorship to the absentee, as in the present case, but the tutor has the limited powers of simple administration of property of another.”

Just as importantly, Justice Kasirer held that while article 85 of the Civil Code does not specify the presumption is rebutted with retroactive effect, this can be inferred from a “consideration of the whole of the treatment of absentees in the Code.” That in turn “strongly suggests to me” that the effects of the rebuttal of the presumption in article 85 should be retroactive to the true date of death, added Justice Kasirer, in reasons that both Justice Jean-François Émond and Catherine La Rosa (Ad Hoc) concurred with.

“We have not found any case that dealt with the issue of how do you interpret that presumption of life and when does it end, and what impact does the determination of the end of that presumption of live have on relationships and contracts and assets that may have gone into the estate based on the presumption of life,” noted Benoit Duchesne, an Ottawa lawyer with Gowling WLG (Canada) who represented Threlfall.

According to Hobday, that finding is not necessarily a positive one for employers because if they are faced with a similar situation, they will have to keep on paying the pension benefits thanks to the presumption created by article 85 of the Civil Code which states that a missing person is presumed to be alive for a period of seven years unless proof of death is made before then. “Employers will have to keep paying, wait seven years and then the whole thing might be ‘undone’ as Justice Kasirer puts it,” said Hobday. “What is important for the recipient to realize is that in light of this decision you may have to give it (pension benefits) back.”

The appeal court also found that Threlfall had to repay the university even though Threlfall maintained that the trial judge was not entitled to rely on article 1491 and 1492 of the Civil Code to order her to reimburse the university. Under article 1491 three conditions must be met before a person who received a payment must restore it to the person who made it: there must be a payment by the payor to the payee, that payment must be made in the absence of a debt, and the payment must be made by the payor in error or to avoid injury while protesting that he or she owes nothing.

Unlike the trial judge, Justice Kasirer held that the pension payments were not made in error. “While articles 1491 and 1492 C.C.Q. as traditionally interpreted do not readily apply here, I am of the view that the judge made no mistake in ordering restitution of the pension benefits,” said Justice Kasirer. He held that the source of the obligation to return the benefits may be traced beyond article 1491 to the general principles of the civil law relating to the performance of obligations and unjust enrichment. A valid payment, added Justice Kasirer, presupposes an obligation with cause.

“In my view, the requirements of article 1491 C.C.Q. may be adjusted to encompass this variant on the remedy for the receipt of a payment not due,” said Justice Kasirer.

According to Duchesne, that finding may reach beyond contract or pension law. “If the decision is that you can adjust the requirements that are set out in the Civil Code to try to get to some principle in equity, that raises a number of questions about the predictability of how the law is going to be applied and how lawyers can advise their clients,” said Duchesne. “How that is going to be interpreted and how that could possibly be applied is an open question.”

Julien Ranger, a Montreal pension lawyer with Osler, Hoskin & Harcourt LLP, said that an expansive reading of article 1491 of the Civil Code is justified given that this is a clear-cut case of unjust enrichment. “The appeal court decision, correctly in my view, underlines the notion of unjust enrichment,” said Ranger. “The appeal court adopted a more liberal and expansive reading of article 1491 C.C.Q. to meet the objectives behind this article, which is unjust enrichment. If Rosme had passed away in his yard, there would be no legal debate as to whether the estate was entitled to the pension monies.”

Michelle Cumyn, a law professor at the Université Laval Professor who has an expertise in contract law, concurs. “The appeal court’s broad interpretation of 1491 seems entirely justified,” said Cumyn in an email. “When a payment is made without obligation, it must be reimbursed.”

Duchesne said his client is now considering filing leave to appeal before the Supreme Court of Canada.

This story was originally published in The Lawyer’s Daily.

Appeal court overturns $5.6 million award

A lower court ruling that awarded $5.6 million to a vessel fleet operator was overturned by the Quebec Court of Appeal after it held that the trial judge erred by applying the Civil Code of Quebec to settle a dispute instead of Canadian maritime law.

In a majority decision, the appeal court held that disputes concerning the repair and supply of engine parts to a ship is subject to Canadian maritime law, and therefore common law rules apply rather than civil law rules of delictual liability. As Canadian maritime law applies, the appeal court reaffirms it is the common law of contract and tort that applies to these cases.

The ruling, met with a sigh of relief by the maritime business world, dispels confusion and uncertainty engendered by the lower court ruling as it reaffirms that Canadian maritime law applies uniformly across Canada and “ousts” the application of provincial law, according to maritime lawyers.

“It’s an important decision because until the end of September it looked like the repair of a ship didn’t come under Canadian maritime law in Quebec which was confusing because in other provinces it was the contrary,” noted John O’Connor, a Quebec City maritime lawyer with Langlois Lawyers LLP. “So there was a bit of confusion.”

Wärtsilä Canada inc, a Dutch-based manufacturer and supplier of marine engines and propulsion systems, sold a bedplate and reconditioned crankshaft on February 2007 to Transport Desgagnés inc. (TDI), which along with Desgagnés Tansarctik Inc. and Navigation Desgagnés Inc., forms part of a large Canadian merchant shipping conglomerate that principally operates in Eastern Canadian and Arctic waters. Some two and a half years later on October 2009, the cargo ship’s main engine suffered a major failure after it had been in operation for approximately 13,600 hours. TDI sued Wärtsilä for recovery of its damages and profit loss while the ship was out of service.

Quebec Superior Court Justice Marie-Anne Paquette ordered Wärtsilä to pay $5.6 million after she found that Canadian maritime law did not apply because the sale of a marine engine is not integrally connected to marine matters. She also held that since the contract for the sale of the engine and bedplate was formed in Montreal, Quebec civil law applied which in turn had a “determinative” consequence to the resolution of the factual and legal dispute.

In the case of a sale by a professional seller, the latent defect is presumed to have existed at the time of the sale unless the seller or manufacturer proves on the balance of probabilities that the defect is due to improper use by the buyer, under articles 1726 to 1730 of the Civil Code. Moreover, the seller is presumed to have known the existence of the defect at the time of the sale. As well, the professional seller or manufacturer cannot rely on a limitation of liability clause unless it rebuts the presumption that it knew of the existence of the defect at the time of the sale.

Both parties agreed that the damages sustained by TDI was about $5.6 million. Wärtsilä also admitted that the cause of the breakdown was insufficient tightening of a bolt on a connecting rod of one of the pistons attached to the crankshaft. According to TDI, this “insufficiency” was caused by Wärtsilä’s plant employees at the time of assembly but Wärtsilä countered that it was the result of subsequent actions carried out by the TDI’s employees. Wärtsilä also invoked clauses limiting the contractual warranty to six months and limiting their liability in the case of latent defects, which TDI argued are not enforceable under Quebec civil law. The trial judge held Wärtsilä liable for the defect in the crankshaft and bedplate assembly and ordered it to pay TDI $5,661,830.

But the appeal court overturned the decision after it was “self-evident” that the repair and supply of engine parts is “intrinsically related to its seaworthiness and therefore directly and integrally connected to navigation and shipping.” Informed by the Supreme Court of Canada’s seminal decision in ITO-Int’l Terminal Operators v. Miida Electronics, [1986] 1 SCR 752, 1986, the appeal court noted that Canadian maritime law is defined in the Federal Courts Act (Act). Any claim with respect to goods, materials or services wherever supplied to a ship for its operation or maintenance or any claim arising out of a contract relating to the construction, repair or equipping of a ship “clearly” falls within the scope of paragraphs 22 (2)(m) and (n) of the Act, added appeal court Justice Robert Mainville in Wärtsilä Canada inc. c. Transport Desgagnés inc., 2017 QCCA 1471.

The trial judge however did not refer to the Act, and analyzed the issue of the applicability of Canadian maritime law in a “statutory vacuum,” said Justice Mainville in reasons that Justice Patrick Healy concurred with. Her “conclusions not only run counter to the clear language of section 22 of the Federal Courts Act, they are also at odds with general principles of maritime law as well as the unbroken jurisprudence of the Supreme Court of Canada and of the Federal Courts,” added Justice Mainville.

According to George Pollack, a Montreal commercial litigator who successfully plead the case, Justice Mainville “applied well-settled principles” that repairs to a ship is an activity “intimately” related to shipping and navigation and “therefore attracts the application of common law.”

“He also makes it very clear that Canadian maritime law is not the law of each province; it is a uniform body of law applicable across the country that ousts the application of provincial law and that’s a pretty significant statement of law,” added Pollack of Davies Ward Phillips & Vineberg LLP.

Unlike Quebec’s civil law, under common law a latent defect must affect an essential characteristic of the good and make the good unfit for its intended use. Also, under common law the onus is on the buyer to prove that the latent defect was known to the seller or that the seller showed reckless disregard for what it should have known. In the case at hand, the appeal court deferred to the factual findings of the trial judge and concluded that TDI met their burden of proving that the goods supplied by Wärtsilä had a latent defect affecting an “essential characteristic,” making it unfit for its intended use. But, added Justice Mainville, there is “no doubt” that the limitations of liability terms apply.

“TDI bargained for what it got and clearly accepted the allocation of risks set out under the contract terms,” said Justice Mainville. “It cannot rely on the courts to reallocate those risks in its favour. Between commercial parties, pricing and costs (notably insurance costs) are driven in part by the allocation of risks, and it is not the function of the courts to transfer such risks from one commercial party to the other when they have themselves allocated it.” Wärtsilä was ordered to pay jointly to TDI and its insurer $78,900.

According to Darren McGuire, national leader of the maritime law group at Borden Ladner Gervais LLP, the decision is a “good one” because it underscores the importance of having uniformity of laws throughout the country and it fosters certainty for business in terms of contractual obligations for sophisticated and international players.

“What business is looking for is certainty in contracts, especially in the international context,” said McGuire. “They don’t want to be in a situation where they may be subjected to different rules in different provinces or countries.”

Appeal court Justice Paul Vézina however would have dismissed the appeal because Wärtsilä limited the warranty against latent defects without discharging their obligation to repair the damages caused to others by their fault. In his view, Quebec civil law should apply.

Jean-François Bilodeau, a Montreal maritime lawyer with Robinson Sheppard Shapiro, believes that the SCC should proffer new guidance on these matters if TDI decides to lodge an appeal. Bilodeau points out that Justice Mainville makes a distinction between the sale of a ship, which falls under provincial jurisdiction, and the repair and supply of engine parts to a ship, which is subject to Canadian maritime law.

“I’m not quite in agreement with the distinction,” said Bilodeau. “Put yourself in the place of a shipbuilder. A shipyard sells and repairs ships. When he sells a ship, it falls under provincial jurisdiction, and when he repairs, federal. And when the buyer purchases a part he is subjected to federal law and when he buys a boat or ship, provincial. In my opinion, that is a shaky distinction.”

Quebec court rules that religious marriages do not necessarily carry any legal obligations

A controversial Quebec Superior Court decision that ruled that religious marriages do not necessarily carry any legal obligations under civil law may have alarming and sweeping consequences, according to family law experts.

The “disturbing” ruling creates a new category of civil status in Quebec, undermines long-held views of religious marriages, and will possibly expose women to vulnerable situations where they will be pressured into celebrating a religious marriage without the protection afforded by civil law, cautioned family lawyers.

“This ruling is very disturbing,” remarked Alain Roy, a family law professor at the Université de Montréal and head of a government-mandated committee that last year issued a 600-page report with 82 recommendations calling for sweeping reforms to Quebec’s family law regime. “It risks opening a Pandora’s box. If this ruling stands I wouldn’t be surprised if ten years from now there will be a lot of unpleasant surprises, with some women finding out that they are not married under civil law.”

In a ruling that has completely baffled family lawyers, Judge Christiane Alary held in Droit de la famille — 16244, 2016 QCCS 410 that a minister of religion who performs a religious marriage does not have to send a declaration of marriage to the Registrar of civil status of Québec. Couples however who pursue this avenue would not be recognized as being legally married under civil law and would therefore not benefit from the legal protections granted to married couples, warned family lawyers.

Family lawyers are just as perplexed by the stance taken by the Quebec Attorney General who successfully argued that a religious celebrant can perform a  religious marriage that does not necessarily lead to “civil effects.” (The Attorney General declined to issue comments over its stance).

“The judgment is blatantly wrong in law,” stated renown Montreal family lawyer Anne-France Goldwater of Goldwater, Dubé. “And shame on the Attorney General of Quebec for arguing that. If you read the sequence of articles from 365 to 375 of the Civil Code, a celebrant has no choice. Once he has performed the marriage he draws up a declaration of marriage and sends it without delay to the Registrar of civil status.”

In Quebec, a declaration of marriage or civil union is mandatory under the Civil Code of Quebec, and it must be filed before the Registrar of civil status, otherwise the marriage will not be recognized, points out Roy. Article 118 of the Civil Code stipulates that the declaration of marriage has to be made without delay to the Registrar by the person who solemnized the marriage while article 366, among other things, authorizes ministers of religion to solemnize marriages. According to Roy, a minister of religion then is not only a “religious officer” who must solemnize a marriage that conforms to his faith’s rites but also a “civil official” who has no choice but to forward “without delay” the declaration of marriage to the Registrar.

“I admit that I do not understand her understanding of the Civil Code,” remarked Roy. “Would it be acceptable for a notary who celebrates a marriage to not send the declaration of marriage to the Registrar? Of course not. From the moment that a religious officer is conferred with a civil status to solemnize a marriage, he has no discretion but to send the declaration of marriage to the Registrar.”

According to Michel Tétrault, a lawyer and author of several books on Quebec family law, a religious marriage celebrated with a minister of religion who does not transmit the declaration of marriage to the Registrar is not legally recognized as a marriage under Quebec law. “Marriage is an institution that the courts take very seriously and they strive to ensure that the rights and duties of spouses are fulfilled and respected,” said Tétrault. “A marriage therefore must necessarily involve commitments compatible with public policy. It must lead to the creation of a matrimonial regime, whatever form it may take. When a religious union is celebrated but the Registrar does not receive a declaration of marriage, it has no civil effect.”

The case involves two accountants who married in a Catholic church. After 11 years of marriage, the man, a Baptist, asked for a divorce and then an annulment of their union. He argued that articles 118 and 366 of the Civil Code were unconstitutional and breached both the Canadian Charter of Rights and Freedoms and the Quebec Charter of Human Rights and Freedoms. He maintained that people who are not religious have a choice to live together, and therefore able to establish between themselves financial and patrimonial agreements that suit their needs. He further argued that people of faith do not have that option because as soon as they are married religiously there are obligatory rules that kick in that dictate the sharing of matrimonial patrimony and matrimonial property.

His challenge was rejected, albeit unsatisfactory and erroneously, according to Université of Montréal constitutional law professor Stéphane Beaulac. But more importantly, Beaulac believes that the decision opens the door to uninformed consent. In Quebec, future spouses must be able to give free and enlightened consent before marrying. “The big concern is that it will open the door to situations where there will be uninformed consent and situations where a spouse – usually women — will face undue pressure to marry religiously without receiving the protection afforded by the civil law,” said Beaulac, who believes that the decision creates a new category of civil status in Quebec – a religious marriage without civil consequences.

The decision leaves many unanswered questions around informed consent and the legal duties of ministers of religion, added Roy. Religious institutions such as the Catholic Church have always worked under the premise that a minister of religion who performs a religious wedding was legally obligated to send a declaration of marriage to the Registrar. But while that no longer appears to be the case, the judgment does not stipulate whether ministers of religion are legally compelled to inform couples of the new option available to them. Nor does it provide clues on how ministers of religion will ensure that the spouses have given their free and enlightened consent under this new scenario. “How will it work?” asks rhetorically Roy, adding that. “Will the minister of religion who performs a religious wedding automatically send a declaration of marriage to the Registrar? Or will he send it only at the request of the spouses? If he does not send a declaration of marriage at the request of the parties, how will he ensure that the validity of their consent? The infrastructure is not in place following this decision to ensure the integrity of consent.”

Roy believes that the ruling provides the Quebec government with an ideal opportunity to implement one of the recommendations made by the government-mandated committee that proposed changes to Quebec’s family law regime. Besides repealing the concept of civil union, the committee recommends that couples without children be left to define the contractual arrangement they would like to live under, whether in a common-law relationship or a regular marriage. But couples who choose to opt out of the legal consequences under civil law of their marriage would have to formalize their agreement by a notary, added Roy.

Tobacco companies do not have to pay initial $1.13 billion in tobacco class action suit

Three Canadian tobacco companies will not have to make an immediate $1.13 billion payment to Quebec smokers who won a landmark class action suit after the Quebec Court of Appeal held that the justification for the provisional execution is weak, the prejudice to the firms serious, and that the balance of convenience weighs in their favour.

An initial payment of $1.13 billion was due this weekend after Quebec Superior Justice Brian Riordan held in Létourneau c. JTI-MacDonald Corp., 2015 QCCS 2382 that it was “high time that the companies started to pay for their sins” and “high time” for the plaintiffs and their lawyers to receive some relief from the “gargantuan” financial burden of bringing the tobacco companies to justice.

But the three-judge appeal court panel found that the existence of those “sins” is sub judice, or under judicial consideration, by the Court of Appeal, and therefore this “weakness in the order behooves our intervention.”

Delays as a justification for ordering provisional execution of an immediate initial $1.13 billion payment “does not stand up to scrutiny,” added appeal court. “If delays in appeal were in themselves sufficient to satisfy the criteria of article 547 of the Code of Civil Procedure (C.P.P.) then provisional execution would become the rule instead of the exception,” said the appeal court in its 17-page ruling.

The appeal court also points out that it’s far from clear on a “strict legal basis” whether provisional execution is “incompatible” with class actions. Article 1030 of the C.P.P. provides that it is only upon the judgment acquiring “the authority of res judicata” (“l’autorité de la chose jugée”) that the process to have class members file claims is commenced. “Whether the legislator meant to require that the judgment becomes final (“passé en force de chose jugée”) in the sense that the appeal court process is exhausted, or merely binding upon the parties (“autorité de la chose jugée”) need not be decided in this case because the appeal suspends the effect of the “l’autorité de la chose jugée” and prevents the judgment from acquiring the “force” of the “chose jugée,” said the appeal court.

There are also other legal and practical considerations that have to be taken into account, noted the appeal court, beginning with what happens if the tobacco companies are successful in appeal. The tobacco giants successfully argued that the amount would not be recoverable if they eventually won on appeal. “The potential necessity of seeking reimbursement of $10,000 from each of the 100,000 class members is by any objective standard a prejudice that cannot be ignored,” said the appeal court.

tobacco class action. Share value of tobacco companies June 2015The initial $1.3 billion payment would also cause a “significant impact” on the tobacco companies – Imperial Tobacco Canada Limited, Rothmans, Benson & Hedges Inc., and JTI-MacDonald Corp. – despite that they are profitable and sizeable, added the appeal court. In the case of JTI-MacDonald, its portion of $142,530,000 exceeds its annual earnings before interest, taxes and other expenses and well exceeds cash on hand of approximately $5.1 million, said the appeal court. Rothmans, Benson & Hedges’ $246,030,000 exceeds its projected cash on hand at the end of July 2015 by approximately $125 million while Imperial Tobacco’s provisional execution amount of $742,530,000 is approximately double its annual profit (before extraordinary items) and greatly exceeds current cash and credit availability to pay such a sum, added the appeal court.

“The judge based his calculations of appellant’s ability to pay on historical earnings and balance sheet worth,” said the appeal court. “He obviously did not analyze current cash and credit availability as set forth in the affidavits submitted to us.”

Cynthia Callard, the executive director of the Physicians for a Smoke-Free Canada, told Canadian Press that she was not “really” surprised by the appeal court ruling. “They were successful but the court made it very clear in this ruling that they’re only successful on this particular pre-payment. They said it was administratively difficult to see how the money could come back.”

The landmark ruling that ordered three leading Canadian tobacco companies to pay $15.5 billion in moral and punitive damages to Quebec smokers will likely serve as a road map for provinces who have filed medical cost recovery lawsuits against the so-called Big Tobacco, according to legal observers.

tobacco class action 4. cigarette prices in Canada 2015After a trial that spanned over 253 days of hearings, heard 76 witnesses, with 43,000 documents filed as exhibits, Quebec Superior Court Justice Brian Riordan found that the three tobacco companies committed four separate faults under Quebec law. The decision covers two class actions that were heard as part of the same trial, with one obtaining damages for 918,218 Quebecers afflicted with tobacco dependence and the other for 99,957 Quebec smokers and ex-smokers who developed emphysema, lung cancer, or throat cancer.

“The outcome of the Quebec class action demonstrates that the tobacco industry can be defeated, and defeated in a big way,” noted Rob Cunningham, a lawyer and senior policy analyst with the Canadian Cancer Society. “So provincial governments have to simply persevere, get the cases to trial, and they can see from Quebec what the potential result will be. The wrongful behaviour at issue in the provincial government lawsuits is fundamentally the same as in the Quebec class action.”

tobacco class action 2. Smoking rates in CanadaEvery provincial government is suing the tobacco industry, including their foreign-based parent companies, to recoup health-care costs emanating from smoking-related disease. The Ontario government is seeking $50 billion, Quebec $60 billion, and other provinces have yet to stipulate a dollar figure in their statements of claim. Much of the evidence and testimony stemming from the Quebec class action will be available to the provinces. “What we now have is a bit of a road map for cases that are going before the courts in other provinces in terms of the evidence and issues,” noted Glenn Zakaib, a Toronto class action and product liability lawyer with Cassels Brock & Blackwell LLP.

The Quebec class action suits were launched in 1998, consolidated and certified seven years later, and the case began sitting in 2012. In between, countless proceedings and appeals were filed that delayed and interrupted the trial. The suit essentially alleged that the tobacco companies were liable because they knew they were putting out a harmful product, failed to inform the public of the risks and dangers of cigarettes, and conspired to “disinform” the public and government officials of those dangers to prevent “knowledge of the nature and extent of the dangers inherent in cigarettes from being known and understood.”

“It should have been an easy case because it is rare for a manufacturer to put in the market a dangerous product that creates dependence all the while lying about the dangers the product poses and fabricating false science to induce people to use and continue to use their product,” remarked Bruce Johnston, a class action lawyer with Trudel, Johnston & Lespérance, a Montreal law firm that joined forces with three other firms to represent class action plaintiffs. All told, about 10 class action plaintiff lawyers worked on the case, with five or six working full-time during the trial.

In a scathing ruling that described the actions of the tobacco companies as brutally negligent, immoral, and malevolent, Justice Riordan found that the three cigarette manufacturers breached their general duty not to cause injury to another person and violated their duty as manufacturers to inform clients of the risks and dangers of its products under Civil Code of Quebec. As well, they were found to have infringed the rights to life, personal security, personal inviolability and dignity under the Quebec Charter of Human Rights and Freedoms and their obligation not to hide the truth or mislead clients concerning their products under the Quebec Consumer Protection Act.

tobacco class action. lung cancer“Over the nearly fifty years of the Class Period (from 1950 to 1998), and in the seventeen years since, the Companies earned billions of dollars at the expense of the lungs, the throats and the general well-being of their customers,” said Justice Riordan. “If the Companies are allowed to walk away unscathed now, what would be the message to other industries that today or tomorrow find themselves in a similar moral conflict?”

The liability however was not apportioned equally, with Imperial Tobacco ordered to pay 67 per cent of the damages, RBH 20 per cent, and JTM 13 per cent. Justice Riordan held that Imperial Tobacco’s culpable conduct surpassed that of the two other companies because it was the industry leader on many fronts, including that of hiding the truth from – and misleading – the public. Moreover, Justice Riordan found that it acted in bad-faith by blocking court discovery of research reports by storing them with outside counsel. In the summer of 1992, lawyers at the now defunct Montreal law firm Ogilvy Renault supervised the destruction of some 100 research reports in Imperial Tobacco’s possession, conduct that Justice Riordan held to be unacceptable, bad-faith and possibly illegal, and designed to “frustrate the legal process.”

“The most important thing that Justice Riordan has done is that he has held accountable an industry that manufacturers a product that is dangerous, that it knows to be dangerous, and he painstakingly, carefully and methodically went through mountains and mountains of evidence and said you cannot get away with this,” said Gordon Kugler, a Montreal medical malpractice and class action lawyer with Kugler Kandestin LLP, one of the other law firms who represented the class.

Though the ruling was based on Quebec law, many legal observers believe that the outcome would most likely have been the same if the case was heard elsewhere in Canada thanks to the voluminous medical evidence, including epidemiological studies, and expert evidence that was introduced at trial. “I don’t see how based on the facts a court in another jurisdiction could come to a different conclusion,” said Jean Saint-Onge, a Montreal class action lawyer with Lavery, de Billy. “Although the law may differ, the principles remain the same and are not unique to Quebec.” But equally important, the tobacco class action underscores the amount of proof that is required when a class action “of this magnitude” is heard on the merits. “You need to rely on massive expertise on many horizons, and that makes for extremely costly cases.”

The judgment may not have created new law as it applied well-known principles under various Quebec laws but it has possibly opened the door to a new tactic for class action plaintiffs, said Johnston. Tobacco companies argued that causation for each member of the class must be established. In essence, they wanted each class member to testify. But under Quebec’s Tobacco-Related Damages and Health Care Costs Recovery Act of 2009 (TRDA), a law created especially for tobacco litigation and one that other provinces have as well, adequate proof of causation with respect to each member of a class can be made through epidemiological evidence. “I always felt that this this is the path to take in cases of mass tort involving the responsibility of manufacturers,” said Johnston. “Because if one has to prove causation on an individual basis, it renders the class action inefficient. I will not hesitate to plead collective causation in other cases, and I believe the courts will eventually adopt it.”

The case is far from over. Other issues still need to be settled. Class action plaintiffs sought a judgment declaring the tobacco companies guilty of “improper use of procedure.” But Justice Riordan decided to mull over the issue until after the judgment on merits. And if the ruling is executed, there remains the thorny issue of how individual claims are going to be proved. “That’s going to be a significant issue – what do you do with the $15.5 billion?,” remarked Zakaib.

In the meantime, Mario Bujold, the executive director of the Quebec Council on Tobacco and Health, one of the plaintiffs in the class action, is elated with the “historical” ruling even though he knows the battle is far from over. “It’s a victory for the victims and all of society,” said Bujold. “It recognizes the responsibility of an industry that acted irresponsibly for more than 50 years. Now governments will have no choice but to take measures to reduce smoking, and even better, introduce better controls on tobacco products.”

Confidentiality breach proves expensive for federal government

The federal government and two employees who worked for an Employee Assistance Program were ordered to pay nearly $175,000 for breaching the rights of an employee who sought their assistance in a case that underlines the importance for employers and personnel to safeguard confidential information.

“Employers must draw lessons from this ruling on how to deal with confidential and private information of employees,” said Sébastien Lorquet, a labour and employment lawyer with Fasken Martineau DuMoulin LLP. “They must understand that if confidential and private information is disclosed and that it causes harm to an employee, then employers and employees at fault can be held liable for damages incurred by the employee who suffered harm.”

Five years ago J.T., a “discreet and competent” software programmer who worked for the federal government for 18 years, sought help from an Employee Assistance Program (EAP) offered by the government after having two nightmares over a period of a couple of weeks in which she dreamt of killing her father. The nightmares occurred shortly after she refused to financially help her father, a compulsive gambler. The counsellor, who worked for the EAP for a little more than a decade, was not fully bilingual and misinterpreted J.T.’s French-spoken admission. She mistakenly thought that J.T. “had two plans to kill her father,” which was not the case. The counsellor interrupted the consultation and asked her supervisor, a social worker in charge of the EAP program, to call police because “this is serious.” When police arrived, J.T. tried to explain that it was a misunderstanding but to no avail. J.T. was then escorted by police to a hospital where she was seen by a mental health counsellor who concluded that J.T. posed no danger to herself or to her father and she was released from the hospital that same evening.

When J.T. went to work the following day, her supervisor informed her that following the revelations she made, she was not authorized to be in the workplace without a medical certificate demonstrating she was mentally fit. J.T. returned to work a month later, and had the impression that her colleagues knew what took place. She transferred to another department, and she believed that her new colleagues too were aware of the events that transpired. She then stopped working altogether.

It turned out that the social worker ended up calling more than just police. She had informed her employer, including security, human resources, and a ministerial committee on workplace violence “even though the situation was not related to work,” notes Quebec Superior Court Justice Carole Therrien in her 38-page ruling in J.T. v. Barber 2014 QCCS 4726. All told, more than a dozen people knew what took place.

The case was mishandled on several fronts, concluded Justice Therrien. The counsellor who misinterpreted J.T.’s revelation did not meet her professional obligation to fully understand the language spoken by the client. “A helping relationship demands more than a functional mastery of the client’s language,” said Justice Therrien. “In this context, a counsellor has the duty to understand the client’s discourse, with all its subtleties. Each word has a precise meaning and the message cannot be understood in part or poorly decoded.”

The counsellor also “erroneously” breached her confidentiality obligations, added Justice Therrien. Before breaching their confidentiality obligations, a counsellor must “fear” that a client will execute their homicidal ideas before taking appropriate steps. While the counsellor argued that she did not possess the skills to evaluate the risk J.T. represented, Justice Therrien noted that her employer gave her the responsibility to determine the level of potential danger when responding to clients involved in crises. “An EAP client has the right to expect that a counsellor who she confides in has the requisite skills to correctly manage their difficulties,” added Justice Therrien.

But even if the counsellor was justified in believing that J.T. should be evaluated by a doctor or psychiatrist, she failed to follow steps outlined by the EAP policy and Quebec’s Civil Code, pointed out Justice Therrien. Under s. 27 of the Civil Code, a person may be placed under preventative confinement if the danger is grave and immediate, without the authorization of the court, as provided for in the Act respecting the protection of persons whose mental state presents a danger to themselves or to others (Act). However under s. 8 of the Act, a peace officer may, without the authorization of the court, take a person against his will to an institution only if there is no member of a crisis intervention unit available in due time to assess the situation. The EAP policy also states that counsellors are expected to refer patients to the appropriate resources. But the counsellor did not take steps to contact a crisis intervention center and nor she did ask J.T. whether she would consent to going to a hospital and consult with a doctor or psychiatrist.

“One of the interesting things about the case is that the government put in place a policy to avoid these situations and it seems that the employees did not follow the procedures,” remarked Lorquet. “It’s important for employers who implement such policies around confidential information that they train its employees and ensure employees respect such policies.”

The Attorney General of Canada argued that the two EAP employees – even though they worked as a service provider for the government – “represented the employer” and that as a result had the responsibility to ensure the security of the workplace. The social worker’s decision to inform their supervisors was therefore fully justified. But Justice Therrien dismissed the argument, pointing out that the “State cannot invite employees to take advantage of a confidential service for their personal problems and then oblige its counsellors to…divulge information to the employer.”

Justice Therrien concluded that by “illicitly and intentionally” breaching their confidentiality obligations, the two EAP employees as well as the federal government infringed J.T.’s rights under the Canadian Charter of Rights and Freedoms. Justice Therrien awarded J.T., a self-represented litigant, nearly $175,000, including $109,000 for loss of salary, $60,000 for breaching her integrity, and $8,000 in expert fees.

“The issue of confidential information in the workplace is continuously evolving, and represents a risk to employers,” noted Lorquet. “Employers who implement an employee assistance program have an obligation to ensure that its employees are trained and qualified.”

Employers have duties towards employees working abroad

An electrician who launched a $190,000 suit against the scandal-plagued engineering firm SNC-Lavalin for failing to “rapidly and efficiently” evacuate him from Libya while the African nation was in the midst of a civil war lost his court battle after Quebec Superior Court held that the “troubles and inconvenience” he suffered were due to the “insurrection” in the country.

In a ruling that sheds light on the responsibilities employers have towards employees who work abroad, Justice Louis Lacoursière held that while article 51 of the Quebec Act Respecting Occupational Health and Safety (Act) does not apply beyond the borders of Quebec, employers are nevertheless bound under article 2087 of the Civil Code of Québec to take “any measures” to protect the health, safety, and dignity of employees even if they work out of the country.

“Although the Act does not apply outside of Quebec, that does not mean that employers do not have obligations towards employees who work outside of the country,” noted Orélie Landreville, an employment and labour lawyer with Dunton Rainville in Montreal. “Employers have a general duty, including the duty to act in good faith, to keep its employees informed, to respect the obligations spelled out in the contract, that are inherent in contracts because the contract was signed in Quebec. That it was executed elsewhere changes absolutely nothing.”

The ruling underscores yet again the importance that Quebec legislators have given to safety and security of workers, adds Sylvain Toupin, an employment and labour lawyer with Cain Lamarre Casgrain Wells in Montreal. That safety and security is clearly emphasized in two completely different pieces of legislation highlights its importance, added Toupin. “The bottom line is that these two articles have a vocation that for all intents and purposes is identical,” said Toupin. “Even its wording is extremely similar. I can tell you that in practice I use both articles interchangeably.”

Francis Proulx, an electrician who headed a team of 20 people on a water-irrigation project in in the middle of the Sahara desert in the town of Sarir, alleged that the Montreal engineering giant failed to protect the dignity of employees by keeping employees in the dark over its evacuation plans. Proulx also alleged that SNC-Lavalin failed to ensure the safety and security of its personnel while the nation became embroiled in civil strife beginning in 2011. Proulx, who was hired on a year-long fixed-term contract, also claimed that SNC-Lavalin rescinded its promise, without just cause, to extend his contract by five years. As well, Proulx alleged that since returning to Quebec he suffers from “enormous stress” and insomnia. In a counter suit, SNC-Lavalin sued Proulx also for $190,000, including $130,000 in damages for harming its reputation following critical comments Proulx made in the media about SNC Lavalin’s efforts to evacuate personnel.

“There is no doubt that Mr. Proulx was affected by the incertitude and anguish he experienced in Sarir,” said Justice Lacoursière in Proulx v. SNC-Lavalin inc. 2014 QCCS 4823. “However, the cause of these troubles and inconveniences was the insurrection in the host country rather than actions committed by SNC.” In fact, SNC-Lavalin established a crisis team to deal with the highly-charged situation in Libya, somewhat kept employees informed over evacuation plans, and evacuated personnel two weeks from the onset of the crisis, pointed out Justice Lacoursière.

Besides having to take measures to protect the health, safety, and dignity of employees, employers are bound by article 2087 of the Civil Code to keep employees informed of developments related to their work, said François Fleury, an employment and labour lawyer with Monette Barakett Avocats S.E.N.C. in Montreal. But it is contextual, adds Fleury. SNC-Lavalin decided to parcel out information over its evacuation plans because it feared that a leak could compromise the security of its employees. “The judge recognizes that SNC-Lavalin gave out evasive responses but it doesn’t amount to a civil fault because of the unique circumstances that it faced,” said Fleury.

Since SNC-Lavalin was not at fault for the manner in which it fulfilled its obligations and responsibilities before and during the evacuation from Sarir, the judge held that if Proulx wants to seek compensation for his psychological harm and loss of enjoyment of life he should be turning to the Quebec workers’ compensation board because it is an occupational injury under the Act Respecting Industrial Accidents and Occupational Diseases. That Act applies to employees who are Quebec residents and employers who have a place in business in Quebec, regardless of where the work was done, said Landreville.

Justice Lacoursière also dismissed Proulx’s allegation that he was hired under a permanent contract and was fired without just cause. Justice Lacoursière held that Proulx signed a fixed-term contract that could last up to 12 months or for the duration of the project requirements. The project came to an end following the political strife in Libya, circumstances that were beyond SNC-Lavalin’s control, said Justice Lacoursière. What’s more, upon termination of the contract the engineering firm gave Proulx a reasonable indemnity that included four weeks’ pay, plus time owed and vacation pay, which he cashed in. While Proulx had hoped to work for SNC-Lavalin, and repeatedly – albeit unsuccessfully — applied for new job postings, the Montreal firm was under no obligation to hire him, added Justice Lacoursière. “The issue of fixed-term contracts or permanent contracts is one that is regularly raised by employees and one we deal with often,” said Landreville. “The qualification of the contract is decisive in terms of the obligations each party has upon termination of employment.”

Justice Lacoursière also rejected SNC-Lavalin’s counter-suit. The engineering firm asserted that its reputation was harmed from comments Proulx made to the media over SNC-Lavalin’s evacuation efforts. “SNC-Lavalin found itself at the center of tough media coverage, and it is difficult to conclude from the evidence that Proulx’s affirmations…had an impact on its reputation,” said Justice Lacoursière.

That surprises Toupin. “It’s as if the ruling is saying that if you have a poor reputation, you are going to provide additional evidence to prove your case for damages. That finding is going to certainly have an impact.”

Quebec court authorizes privacy class action against Apple

A privacy class action suit launched by a software engineer against Apple Inc. and Apple Canada Inc. was granted authorization by Quebec Superior Court.

Gad Albilia alleges that Canadian residents who purchased an iPhone or iPad and who downloaded free software applications from the Apple’s virtual App store onto their devices have had their privacy rights infringed. He claims that personal identifiable information was collected through the apps and was transmitted, without the knowledge or permission of class members, to third-parties for purposes “wholly unrelated to the use and functionality of their iDevices or the apps.”

Albilia alleges that the information collected would have included precise home and workplace locations and current whereabouts; unique device identifier (UDID); personal name assigned to the device; and the consumer’s gender, age, postal code and time zone. He also alleges that information was collected on search terms entered, selections of movies, songs and restaurants as well as app-specific activity.

He also claims that resources such as storage, battery life and bandwidth of their iDevice were consumed and diminished without permission by Apple and downloaded free apps.Albilia, who launched the class action after learning that two similar class actions were filed in the U.S., is suing Apple because it has full control over the apps and the Apple ecosystem.

He alleges that Apple allowed “for the making of clandestine and intrusive use of personally identifiable information while representing to its clients that they will protect their privacy,” noted Quebec Superior Court Justice Pierre Nollet.

But because Albilia’s legal arguments are principally based on the application of privacy laws in Quebec, including the Quebec Charter of Human Rights and Freedoms and civil liability arising from the Civil Code, Justice Nollet found that the petitioner failed to establish a real and substantial connection for residents outside Quebec.“The Petitioner has not demonstrated that the legal systems in the twelve and more different jurisdictions that he wishes to apply to this case rely on similar laws and concepts,” noted Justice Nollet.

The class action is seeking compensation and punitive damages, though it does not state how much. It is also seeking injunctive relief against Apple to stop allowing third parties to collect and disseminate personally identifiable information.

While “respondents have raised very serious issues and difficulties arising from the motion for authorization as drafted,” Justice Nollet concluded that the “action is clearly not frivolous and manifestly destined to fail.”