Court of Quebec judge absolved by inquiry committee

A Court of Quebec judge under fire for allegedly lending more than $9 million in loans over the past few years has been absolved of any ethical breaches by a five-member panel of the Committee of Inquiry of the Conseil de la magistrature du Québec.

The inquiry committee concluded that Judge Manlio Del Negro, nominated as a Court of Quebec judge on March 2017, did not infringe article 129 of the Quebec Courts of Justice Act nor did he breach the Quebec Judicial Code of Ethics. Under article 129 of the Act, the office of judge is exclusive. In other words, a lawyer appointed judge is legally required to refrain from any activity which is not compatible with his functions, including carrying out – even indirectly — commercial activities.

The inquiry committee recommended that the judicial council reject the complaint lodged by the Quebec Minister of Justice Stephanie Vallée.

“The Committee concludes that a judge must be given a reasonable amount of time to put his affairs in order to meet the obligations of his new posting, and that Judge Del Negro demonstrated the necessary will and energy to so within an acceptable timeframe under the circumstances,” held the inquiry committee in a decision issued on May 1st.

Evidence at the hearing revealed that a week after being nominated Judge Del Negro resigned as trustee from the trust named Fiducie Famille Del Negro. He also “revealed his situation” at the first meeting he held with Chief Justice Lucie Rondeau and confirmed his commitment to “quickly take steps” to withdraw from his commercial activities and comply with the requirements of a judge.

Several months later the French-language television network TVA and the French-language tabloid Journal de Montréal disclosed that as of as of June 5, 2017, Judge Del Negro was still a creditor in four dossiers, where the mortgage guarantees allegedly amounted to $800,000, with interest rates ranging from six to 12 per cent.

The inquiry committee found that at the time that the news report was published, there were monies owed on three loans issued by the Del Negro trust. But Judge Del Negro, points out the inquiry committee, released and wrote-off the mortgage debts, and in fiscal 2016 declared a capital loss of more than $83,000, excluding interest.

The inquiry committee underscored that article 129 of the Act prohibits the “conduct” of commercial activities, and not passive investments.

Employer found guilty of manslaughter following fatal work accident

A general contractor has been found guilty of manslaughter after one of his employees was killed by being buried in a trench, marking the first time in Quebec that a breach of provincial occupational health and safety legislation served as the basis for a manslaughter conviction under the Criminal Code.

In a ruling lauded by health and safety lawyers and one of the province’s largest unions, Court of Quebec Judge Pierre Dupras found Sylvain Fournier, an excavation contractor, guilty of criminal negligence causing death under section 220(b) of the Criminal Code and manslaughter or involuntary culpable homicide under section 222(5)(a) of the Criminal Code, which provides that a person commits culpable homicide when he causes the death of a human being, “by means of an unlawful act.”

But while the Crown fulfilled its burden of proof on both counts, Judge Dupras issued a conditional stay of proceedings on the criminal negligence charge in respect of the Kienapple principle, emanating from the Supreme Court of Canada’s decision in R. v. Kienapple [1975] 1 S.C.R. 729], which in essence prohibits multiple convictions arising out of the same “cause or matter.” Fournier is scheduled to be sentenced in May.

“The majority of employers are mindful of health and safety (H&S) regulations they must respect but for those employers who are more delinquent towards their H&S obligations, this decision may lead to greater awareness over the consequences they may face,” said Laurence Bourgeois-Hatto, a Montreal H&S lawyer with Langlois Lawyers LLP. “It may as a result lead them to be more proactive towards H&S compliance.”

The Fédération des travailleurs et travailleuses du Québec too welcomed the verdict. In a statement issued after the ruling, it called on construction contractors to ensure the safety of their employees. “Let the message be clear: health and safety on construction sites is not negotiable since it can have serious consequences,” said the union.

On April 2012, Gilles Lévesque, one of Fournier’s employees, died on the job when the walls of a trench he was working in collapsed. Fournier suffered fractures in both legs and was hospitalized for 10 days.

Fournier, initially accused of criminal negligence, challenged the Crown when he was subsequently charged with an accusation of unlawful act manslaughter. But in Fournier c R. 2016 QCCS 5456, Quebec Superior Court Justice Guy Cournoyer concluded that a workplace death resulting from a violation of the Quebec Act respecting occupational health and safety could serve as the basis for an order to stand trial on a manslaughter charge under the Criminal Code. Justice Cournoyer held that the underlying unlawful act in a manslaughter charge can be a strict liability offence, including one related to occupational health and safety. Under these circumstances, it is however up to the Crown to prove, beyond a reasonable doubt, that the conduct of the accused constitutes a marked departure from that of a reasonable person.

Heeding guidance that spelt out a five-point test by Justice Cournoyer, Judge Dupras concluded that Fournier was guilty of manslaughter because his conduct was tantamount to an illegal act as he had breached a regulatory provision related to occupational health and safety. Evidence at trial, where 16 people testified, revealed that the walls of the trench were not adequately supported as required by Québec health and safety legislation. Further, dirt excavated from the trench had been piled too close to its edges, which caused the trench wall collapse, and in violation of s. 3.15.3 of the provincial Safety Code for the Construction Industry. That unlawful act caused Levesque’s death, held Judge Dupras.

Moreover the failure to bolster the walls of the trench was objectively dangerous and “represented a marked deviation from the conduct of a reasonable person,” added Judge Dupras in R. c. Fournier 2018 QCCQ 1071 issued on March 1st. Judge Dupras also found that the risk of the collapse of the walls was foreseeable and a reasonable person in the same circumstances would have foreseen a risk of injuries. Indeed, an inspector from the Committee on Standards, Equity, Health and Safety at Work described the situation as “scary,” and should have required an immediate work stoppage.

“Such conduct stands out by the indifference, detachment, disinterest and reveals a total absence of consideration towards foreseeable consequences,” said Judge Dupras.

According to Montreal health and safety lawyer Linda Lauzon, the ruling is a clear signal that employers need to increase due diligence efforts to ensure compliance with provincial health and safety legislation. “If industry is frightened following the decision, all the better,” said Lauzon of Monette Barakett LLP.

But Lauzon warns that the real impact of the decision will stem from the sentence that Fournier receives, which could be up to life imprisonment. Since Bill C-45 or the Westray Bill was enacted in March 2004, which established new legal duties for workplace health and safety, and imposed serious penalties for violations that result in injuries or death, it has become easier to bring criminal negligence charges in cases involving workers’ health and safety, points out Lauzon. The number of convictions has risen over the years, but Lauzon believes that employers have gotten off relatively lightly in terms of sentencing. “I’m eagerly looking forward to the sentence – that’s where we will see what kind of message the courts will send,” said Lauzon. “If he ends up in prison, that to me will have much more of an impact than a guilty plea.”

Bourgeois-Hatto does not believe that the decision will open the floodgates, but she warns that employers must nonetheless be aware that workplace fatalities can lead to charges not only of criminal negligence but also manslaughter.

Montreal criminal lawyer Brigitte Martin of Sylvestre & Associés LLP, who represented Fournier, told The Lawyer’s Daily that the decision may be appealed. She declined to comment on the decision.

This story was originally published in The Lawyer’s Daily


Montreal man ordered to pay largest fine ever issued for Quebec securities offences

A Montreal man was fined $11.2 million, the largest fine ever issued in Quebec for securities offences, and sentenced to a three-month jail sentence for fraudulent penny stock practices commonly referred to as a “pump and dump” scheme.

Jean-François Amyot is among one of five people and two companies that plead guilty to charges laid against them nearly three years ago by the Quebec financial watchdog, Autorité des marchés financiers, during a trial earlier this year.

They were accused of market manipulation involving five companies, including Spencer Pharmaceutical Inc., Energy 1 Corp., Andes Gold, Kender Energy et Wanderport Corp. They were accused of attempting to influence the market price or the value of securities by means of unfair, improper or fraudulent practices, and misrepresentation, breaching articles 195.2 and 207 of the Quebec Securities Act.

A plea agreement reached earlier this year that was approved by the Court of Quebec led Amyot to plead to five counts of market manipulation and two counts of conspiracy.

  • Under the same deal, Francis Mailhot plead guilty to three counts of market manipulation and one count of conspiracy, and was fined $5 million.
  • Daniel Ryan plead guilty to two counts of market manipulation and was fined $500,000. Ryan plead guilty to another count of market manipulation in another matter and was fined $225,000.
  • Conseils Hilbroy Inc. plead guilty to one count of market manipulation and was fined $1 million.
  • IAB Média Inc. plead guilty to one count of market manipulation and was fined $500,000.
  • Andrew Barakett plead guilty to one count of market manipulation and was fined $50,000.
  • Eric Boyd plead guilty to one count of market manipulation and was fined $30,000.

“The manipulation of securities on the markets is a very serious offence that deserves appropriate sanctions,” said Louis Morisset, AMF’s president, in a statement. “The convictions obtained in this case are the culmination of lengthy investigative procedures and the sustained work of our teams of investigators and prosecutors.”

Amyot was involved in a similar scheme several years ago. In October 2015, the U.S. Securities and Exchange Commission (SEC) described Amyot as a “Canadian Pump-And-Dump Operator” and fined him, IAB Media Inc. and Hilbroy Advisory Inc. (two Canadian companies controlled by Amyot, according to the SEC) and Spencer Pharmaceutical Inc., a publicly-traded company with addresses in both Boston, Massachusetts, and Canada, to more than $7 million.

According to the SEC’s complaint, filed on December 17, 2012, Amyot, Spencer, Hilbroy, and IAB Media were involved in a “pump-and-dump” scheme in 2010 and 2011 involving Spencer’s publicly-traded stock.

According to the complaint, Amyot worked with the three companies, as well as Spencer’s two officers and directors, to create and disseminate false and misleading press releases and to otherwise promote Spencer’s stock, including via websites and newsletters.

Quebec Superior Court judges launch suit against governments

In an extraordinary development at a time when the justice system in Quebec is grappling with the after-effects of the landmark Jordan ruling, Quebec Superior Court judges have launched a suit against the federal and provincial government over the exclusive jurisdiction of the Court of Quebec in some civil matters.

The suit against the Attorney General of Canada and Quebec is seeking a declaratory judgment to determine whether the Quebec government has violated the Constitution Act, 1867 by giving the provincial court exclusive jurisdiction to hear claims over $10,000.

The constitutional challenge, initiated by Quebec Superior Court’s chief justice, senior associate chief justice and associate chief justice, also questions whether the Court of Quebec has the jurisdiction to hear appeals from administrative tribunals.

“The Quebec Superior Court judges consider it to be their duty, their role as custodians of law, to submit this question over the jurisdiction of the Court of Quebec because it has been a problem for years on end,” said Madeleine Lemieux, Ad. E., of Paradis Lemieux Francis. She is the acting spokesperson for the lawyers who filed the lawsuit on behalf of the judges.

Lemieux said that the judges have repeatedly — and unsuccessfully — asked the Quebec Minister of Justice Stéphanie Vallée over the years to refer the matter to the Quebec Court of Appeal to deal with the constitutional issue. The Quebec minister has no comment to make given that the issue is now before the court,” said Paul-Jean Charest, a spokesperson with the Quebec Ministry of Justice.

Matters came to a head when the Quebec government raised the monetary thresholds for cases the Court of Quebec could hear from $70,000 to $85,000, even though the reform was well received by the legal community because the new ceiling was aimed at addressing court delays and increasing access to justice. Under article 35 of the new Quebec Code of Civil Procedure (Code), which came into force on January 1, 2016, the Court of Quebec has “exclusive jurisdiction” to hear matters where the amount claimed is lower than $85,000. That increase does not respect the compromise that was reached in 1867 when the Constitution was enacted, said Lemieux. In 1867 the monetary threshold was $200 which in today’s terms represents $10,000.

“The amendments to the Code which raised the monetary ceiling led the judges to launch the suit,” noted Lemieux. “The question the judges would like to the court to answer is who does what, and then necessary resources should be provided to deal with the situation. The judges believe that the Quebec government does not have the authority to assign the Court of Quebec with exclusive jurisdiction. If there had been concurrent jurisdiction where citizens had the choice, perhaps we would not be in this situation.”

But the timing of the unusual suit leaves a lot to be desired, according to the president of the Quebec legal society. “At a time when the Barreau du Québec and citizens are concerned about better access to justice and the consequences stemming from the Jordan ruling, we believe that the timing of this suit is far from ideal,” said Paul-Matthieu Grondin, the bâtonnier of the Barreau, in a statement. “Under the circumstances, the Barreau requests this issue be directly referred to the Court of Appeal to accelerate the process.”

Simon Potter, the former president of the Canadian Bar Association, too laments the action. Like Grondin, he too believes the matter should have been referred to the Quebec appeal court as the case will likely end up being heard by them anyways, and perhaps even wind its way to the Supreme Court of Canada.

“It is very unfortunate that we have to go through this,” remarked Potter, a Montreal litigator with McCarthy Tétrault LLP. “It looks bad. It is very hard for normal human beings to understand that one set of judges has to do something that looks like suing another set of judges over who is going to handle which kind of cases.”

There are also concerns that if the judges win their case it may end up wreaking havoc on Quebec Superior Court as they may be overwhelmed with cases. But Lemieux said that judges are not concerned about that because the court could grant a delay on the application of the ruling to give both the federal and provincial government time to work out the kinks.

The case is being financed by the judges themselves who last fall voted to contribute $1,500 each. While acknowledging that it is very “peculiar” that a suit launched by their superiors will hear the case, Lemieux pointed out that four judges with an expertise in public law were left out of any discussions around the case. One of those four judges will hear the case. A date for the hearing has yet to be scheduled.

This article originally appeared in The Lawyer’s Daily , published by LexisNexis Canada Inc.

Number of photo radar tickets issued in Quebec has dramatically plunged

The number of photo radar tickets that have been issued has dramatically plunged over the past couple of months following two decisions that called into question the rules around the province’s use of the automated speed and red-light enforcement technology.

According to figures compiled by the Quebec transport ministry that the French-language tabloid Le Journal de Québec obtained through access-to-information requests, only 309 photo radar tickets were issued in May 2017 compared to 41,721 in November 2016. Government coffers have borne the brunt: In November 2016 the provincial government was able to recoup $5.4 million compared to a meagre $95,000 in May 2017.

“It’s been quite a while since we have received requests to challenge photo radar tickets,” told me a Montreal lawyer working for a law firm that specializes in challenging tickets.

Two precedent-setting decisions that held that evidence from the current photo system is “inadmissible” and “illegal” at a time when Quebec is increasing the number of photo radar sites are to blame for the noteworthy decrease, added the Montreal lawyer.

In late November 2016 Court of Quebec Judge Serge Cimon held that the evidence in a photo radar fine was not admissible because it was based on hearsay evidence. Contrary to the Highway Safety Code, the police officer who issued the ticket did not check to see if there was a sign posting the speed limit in the area where the car was driving. The officer also could not say if the device was properly calibrated. Instead the officer relied on statements from other officers who made the checks, said Judge Cimon.

More significantly, Judge Cimon served “formal notice” to the Crown that the evidence used in the prosecution of fixed photo radar cases is based on “insufficient evidence,” and that in the future defendants can seek costs if the Crown “persists” to submit evidence “it knows is illegal.” The Crown did not appeal the case.

Another decision that largely went unnoticed may prove to be just as significant, if not more important, than the Cimon decision. Quebec Superior Justice Daniel Payette held in Audette c. Directeur des poursuites criminelles et pénales, 2016 QCCS 4706 that when tickets are issued under Article 359, the Crown must prove that the defendant himself was driving the vehicle. The Crown in this case did lodge a motion to appeal before the Quebec Court of Appeal.

“These two decisions have created a precedent that makes it easier to challenge photo radar tickets,” said the Montreal lawyer.

Those two decisions also spurred two separate motions seeking authorization for class action lawsuits against the Quebec government to have hundreds of thousands of speeding and red-light tickets issued with photo radar evidence thrown out or refunded.

Number of photo radar tickets from November 2016 to May 2017

  • May 2017 – 309 tickets                       = $95,270 (total amount of fines)
  • April 2017 – 274 tickets                      = $73,157
  • March 2017 – 293 tickets                   = $66,063
  • February 2017 – 1,973 tickets            = $288,902
  • January 2017 – 3,370 tickets             = $494,336
  • December 2016 – 8,311 tickets          = $986,156
  • November 2016 – 41,721 tickets        = $5,390,260

(Source: Le Journal de Québec)

Court of Quebec Judge acted as a private lender before being appointed

A recently appointed Court of Quebec judge has lent more than $9 million in loans over the past few years, according to an investigation by a French-language newspaper.

Judge Manlio Del Negro, who was formally inducted as a Court of Quebec judge yesterday during a ceremony held at the Montreal courthouse, allegedly provided more than 45 loans from 2006 to 2017 before being appointed as a judge this spring, according to the Journal de Montréal.

The revelations raise ethical questions, according to Véronique Hivon, a Parti Québécois member and a former Minister responsible for the Die in Dignity commission, a commission about the right for a terminally-ill patient to end their own life. The Conseil de la magistrature du Québec, a provincial body that supervises the conduct of judges, should investigate the matter to determine whether a lawyer who was a private lender is compatible with the role of a judge, added Hivon.

But Judge Del Negro’s “commercial activities” while he was a lawyer did not render him ineligible to be a judge, asserts the Court of Quebec in a press release. A lawyer appointed judge is legally required to refrain from any activity which is not compatible with his functions, added the Court of Quebec.

According to the Court of Quebec communiqué, Judge Del Negro “revealed his situation” at the first meeting he held with Chief Justice Lucie Rondeau and confirmed his commitment to “quickly take steps” to withdraw from his commercial activities and comply with the requirements of a judge.

“Aware that time must be granted to each new judge to take the necessary steps from the transition from his previous situation to his new functions, the Court is satisfied by those taken by Judge Del Negro,” said the press release.

But the Journal de Montréal reports that as of June 5, 2017, he was still a creditor in four dossiers, where allegedly the mortgage guarantees amounted to $800,000, with interest rates ranging from six to 12 per cent.

Judge Del Negro, who graduated from the Université de Sherbrooke, was admitted to the Quebec Bar in 1984. He was a Montreal criminal lawyer who founded in 1989 the law firm Del Negro Polnicky Perron, which later became Del Negro et Associés. He was appointed a Court of Quebec judge on March 27, 2017.

In 2013 Judge Del Negro donated $50,000 to his alma mater, half of which was given towards modernizing the law library, the other half to create a scholarship fund bearing his name to help grad students studying criminal and penal law.

Judge Del Negro is overseeing a case in which former Montreal Canadien winger Zack Kassian is expected to testify in the case involving 22-year old Alison de Courcy-Ireland who is charged with impaired driving causing bodily harm.

Quebec government appoints three new judges

The Quebec government is ramping its judicial appointments to ease the growing backlog of cases in the justice system.

Quebec Justice Minister Stéphanie Vallée announced the appointment of three new Court of Quebec judges, making it the 20th judge the provincial government has appointed this year. Last December the Quebec government announced it was going to pour $175.2 million over the next four years to recruit new judges, prosecutors and support staff to help curb mounting court delays. So far the Quebec government has hired 52 Crown prosecutors and 50 support staff, 38 correctional services officers, 16 special constables, 32 probation officers and more support staff at the Quebec Ministry of Justice. All told more than 300 have been hired.

The new Court of Quebec judges are Nathalie Duchesneau, Peggy Warolin and Patrick Choquette.

Judge Duchesneau, a graduate from the Université de Montréal, was admitted to the Quebec Bar in 1993 and began her career with the Quebec Director of criminal and penal prosecutions (DPCP). She has been a Montreal municipal judge since 2012, and will sit in the criminal and penal division in Montreal.

Judge Warolin, a solo lawyer with experience in litigation, civil law, administrative law, family law, and youth protection, will sit Rouyn-Noranda. Born in France, Judge Warolin moved to Canada for her education and graduated from the Université Laval and was admitted to the Quebec Bar in 2004. She was president of the Bar of Abitibi-Témiscamingue, member of the General Council of the Quebec Bar, and member of the Board of Directors of the Association des avocats et avocates de province (provincial lawyers’ association). As a member of the Quebec Bar, Judge Warolin has been involved in several missions to Inuit communities across Canada’s North and co-authored the report entitled, le Rapport sur les missions du Barreau du Québec auprès des communautés autochtones du Grand Nord québécois.

Judge Choquette, a partner with the law firm Prévost Fortin D’Aoust, began his practice in 1985 as a civil and commercial litigator and focused his career on real estate, construction law, and labour relations. He was appointed chair of the disciplinary committee of the Association des courtiers et agents immobiliers du Québec by the Québec government in 2006 and then vice-chair of the disciplinary committee of the Organisme d’autoréglementation du courtage immobilier du Québec by the Minister of Finance in 2010 – a position he held until 2015. He will be hearing civil matters in Joliette.

The hunt for new provincial judges is not over. The Quebec government is looking for candidates to sit in the criminal and penal division in Trois-Rivières and the youth protection division in Saint-Hyacinthe, More information can be found here.

Matchmaking service fined by Quebec consumer protection watchdog

A matchmaking company has been fined $14,000 by the Quebec Consumer Protection Office after it was found to have breached the province’s consumer protection laws.

Lifemates, owned and operated by Elite Singles Canada Corporation, was found guilty of drafting contracts in a language other than French without the consent of the consumer.

The firm was also found guilty of receiving a single payment from a consumer and failing to reimburse the consumer within ten days after she had annulled the contract.

In 2016, Elite Singles Canada Corp lost four cases before Quebec small claims court for failing to meet the terms of the contract. A Montreal woman who signed a contract on January 2014 with Lifemates is a case in point. She paid $174.36 a month for 18 months, for a total of $2,132 to Lifemates and in exchange they were supposed to provide her with potential matches, based on her preferences and criteria she spelled out. The Mississauga-based matchmaking service provided her with a potential mate, but it was not someone who met her criteria. She never met with him because she did not “want to waste his time,” according to the ruling.

She then tried several times to call the company but they never replied. She then cancelled her credit card because she did not know how to rescind the contract. The contract drafted by Lifemates did not include an annex that she could fill out to annul the contract, as per article 190 of the Quebec Consumer Protection Act, pointed out Court of Quebec Judge Sylvie Lachapelle.

Judge Lachapelle held that Lifemates breached article 40 of the provincial consumer legislation by failing to provide a service that did not conform to the description in the contract. It was ordered to pay the entire amount paid by the Montrealer and $500 in damages.

Correction: May 29, 2017

An earlier version of this article misstated that Elite Singles Canada Corporation was owned by Affinitas GmbH. In fact, Affinitas GmbH is the owner of, which is different from Elite Singles Canada Corporation. Affinitas GmbH and were not the objects of the proceedings described in the article.

Quebec judge may be a step closer to being removed from the bench

A Quebec judge who refused to hear a quarrel between neighbours and emphatically insisted that they negotiate a settlement may be a step closer to being removed from the bench after the Quebec Court of Appeal announced it will launch an inquiry on his conduct following a request by the Quebec Minister of Justice Stephanie Vallée. Continue reading “Quebec judge may be a step closer to being removed from the bench”

Photo radar under the gun in Quebec

Photo radar tickets are under the gun in Quebec, following a series of decisions that have put thousands of tickets in jeopardy after the courts called into question the rules around the province’s use of the automated speed and red-light enforcement technology.

The fallout from the precedent-setting decision that held that evidence from the current photo system is “inadmissible” and “illegal” is already beginning to be felt at a time when Quebec is increasing the number of photo radar sites. Shortly after the landmark ruling issued in late November by Judge Serge Cimon of the Court of Quebec, another Court of Quebec judge heeded his guidance and tossed out 422 photo radar tickets. More recently still, two Montreal lawyers have filed two separate motions seeking authorization for class action lawsuits against the Quebec government to have hundreds of thousands of speeding and red-light tickets issued with photo radar evidence thrown out or refunded.

“Perhaps it is time to redraft certain provisions of the Quebec Highway Safety Code that regulates the photo radar system because there seems to be a lot of cracks,” observed Charles Daviault, a Montreal litigator with Gowling WLG.

In a decision that seemed to catch the Quebec government off-guard, Judge Cimon held that evidence emanating from a photo radar in the case involving Montreal resident Maria Carmela Bove was not admissible because it was based on hearsay evidence. The $1,160 ticket issued by the Sûreté du Québec, the provincial police force, accused Bove of driving 141 kilometres per hour in a 70 kilometre per hour zone on a highway. But contrary to the Highway Safety Code, the police officer who issued the ticket did not check to see if there was a sign posting the speed limit in the area where the car was driving. Nor was the officer able to confirm whether the photo radar device was properly calibrated. Instead the officer relied on statements from other officers who made the checks, said Judge Cimon who acquitted Bove.

“An offence report is not a magical shortcut that allows the author to not respect the elementary rules of the rules of evidence,” said Judge Cimon in an 11-page ruling in Directeur des poursuites criminelles et pénales c. Bove 2016 QCCQ 13829. “The Court is perplexed why the Bureau des infractions et amendes (the provincial agency that processes tickets) would allow such a system to be put in place,” adding that the case seemed to give credence to the common criticism that photo radars are “a ‘cash cow’ used to generate revenue.” More significantly, Judge Cimon served “formal notice” to the Crown that the evidence used in the prosecution of fixed photo radar cases is based on “insufficient evidence,” and that in the future defendants can seek costs if the Crown “persists” to submit evidence “it knows is illegal.”

“This is a fundamental ruling in penal matters, in evidentiary matters and in cases involving photo radars,” remarked Camille Taillefer, a Montreal lawyer who along with her colleagues, successfully plead the Bove case. “It’s an important case because it puts a spotlight on what may have been a widely-practiced system, and this single case has had a domino effect on many other cases.”

To the surprise of legal observers, the Director of Criminal and Penal Prosecutions (DPCP) decided not to appeal the Cimon decision, a move that lead Montreal lawyer Joey Zukran to seek permission to launch a class action suit. According to the class action application, there have been 877,000 statements of offence issued between August 2009 and November 2016 for infractions captured by photo radars and red light camera technology. The fines for these infractions totalled $116 million, according to the Quebec Ministry of Justice. The class action, which lists the DPCP, the provincial police force and the Bureau as defendants, is seeking an order to cease the use of photo radar and red light cameras, an order that evidence yielded by these technologies as inadmissible and illegal, and $50 million in damages on top of reimbursed penalties and fines because of the defendant’s “misconduct and bad faith.”

“When you receive one of these tickets, it looks like it’s super solid evidence against you but in reality even a first-year law student knows that you cannot rely on hearsay evidence,” said Zukran. “The decision really rips into the government and basically says that they should have known that the evidence they have been providing is inadmissible. I’ll even say it was illegal because of the way the evidence was presented and the way citizens were taken advantage of.”

A second class action motion seeking authorization lodged by Montreal lawyer Jamie Benizri covers only infractions caught by photo radars. It too is seeking the reimbursement of penalties and fines and $100 in damages for each ticket issued by photo radar. The case hinges on Cimon’s decision as well but is also relying on guidance issued by the Quebec Court of Appeal in Baie-Comeau (Ville) c. D’Astous 1992 J.Q. 475, J.E. 92-950 (C.A.Q). In that case the appeal court held that the user of a radar gun must be used by a person who is trained, that the radar gun be tested before and after its usage, and that the test showed that the instrument was precise. “The proposed class action is using the criteria established by the Quebec appeal court when it adjudicated on the validity of a speeding test,” said Benizri.

Benizri is open to collaborating with Zukran in the class action suit, but Zukran is not interested. In fact, Zukran has already filed a motion seeking to have Benizri’s class action suspended. “Jamie is actually a friend of mine and he is free to file whatever action he wants but it has be done within the confines of the law and in class action law in Quebec the rule is clearly established as first to file – and we were first to file here.”

Another decision that largely went unnoticed may prove to be just as significant, if not more important, than the Cimon decision. Montreal lawyer Ronald Audette, who was accused of burning a red light in December 2009, won his case after Quebec Superior Court Judge Daniel Payette overturned a decision by Justice of the Peace Johanne White. Audette successfully plead that he was not behind the wheel at the time of the infraction even though the ticket identified him as the driver of the vehicle at the time of the offense. Under article 592.1 of the Quebec Highway Safety Code, the owner of a vehicle whose name appears in the (provincial vehicle) registry may be convicted of “every offense” under the Code or any municipal traffic or parking by-law committed with the vehicle, unless he proves that at the time of the offence the vehicle was in the possession of a third person without his consent. The ticket that Audette received was issued under Article 359 of the Code, which states that when facing a red light, the driver of a road vehicle or any person riding a bicycle must stop his vehicle. Following guidance issued by the Supreme Court of Canada in R. v. Saunders, ]1990] 1 SCR 1020, Judge Payette noted that “it is a fundamental principle of criminal law that the offence as particularized in the charge must be proved.” Judge Payette held in Audette c. Directeur des poursuites criminelles et pénales, 2016 QCCS 4706 that when tickets are issued under Article 359, the Crown must prove that the defendant himself was driving the vehicle.

According to Daviault, who plead the case for his colleague, the Crown admitted that it was standard practice to issue such tickets under Article 359 instead of Article 592.1 which targets the owner of the vehicle. “The judge places a lot of emphasis on the fact that this is a matter not just of form but of substance and procedural equity,” said Daviault.

The Crown in this case has appealed the decision and the appeal court granted the motion. A date has yet to be set for the hearing.

This story was originally published in The Lawyers Weekly.

Revenue Canada investigation highly reprehensible, says court

A “highly reprehensible” and illegal probe by the Canada Revenue Agency that failed to draw the distinction between a civil tax audit and a criminal tax investigation has put into jeopardy several tax evasion criminal cases involving Quebec construction companies and corruption charges against former federal civil servants, according to tax experts.

In a precedent-setting ruling that appears to bring more clarity to the leading Supreme Court of Canada decision in R. v. Jarvis , [2002] 3 SCR 757, Court of Quebec Justice Dominique Larochelle held that the evidence produced to charge the owner and three other company officials of a Montreal company, B.T. Céramiques, was obtained illegally because federal tax officials crossed the “Rubicon” and failed to inform the taxpayers that the inquiry had turned into a criminal investigation, thereby breaching their right to freedom from self-incrimination and right to reasonable expectation of privacy guaranteed under s.7 and s.8 of the Charter of Rights and Freedoms.

In Jarvis, the SCC stated that a CRA officer may shift his focus during an inquiry into a taxpayer’s affairs from a civil tax audit to an investigation. But once the “predominant purpose” of the CRA’s inquiry becomes investigative, an adversarial relationship between the taxpayer and the state takes hold because “of the liberty interest that is at stake.” CRA officials are then obliged to caution taxpayers and make them aware of their right to remain silent and the right to counsel under the Charter. If the CRA believes that the taxpayer has documents that are necessary to its investigation, the tax authority must obtain warrants in order to lawfully search and seize taxpayer records.

““The issue in Jarvis was a very simple one: when do those powers of constraint against taxpayers that an auditor has can no longer be used because the objective is now to gather evidence for the purpose of prosecution,” explained Montreal tax lawyer Christopher Mostovac who successfully plead the case. “In this particular case, it obviously deals with when an audit becomes an investigation but it also examines if the actual warrant was legal and deals with what happens with information obtained through a warrant and. Jarvis had nothing to do with getting a search warrant.”

CRA’s probe into B.T. Céramiques and its officials overstepped the boundaries from an audit into a criminal investigation when a tax official obtained information that some civil servants working for the tax authority might have been corrupted. On April 2008, CRA officials asked the RCMP for assistance because they expected search warrants would be needed. Defence argued however that before the RCMP became involved in the matter two different CRA divisions – one that investigated civil tax matters and another that handled criminal investigations, both of which were headed by the same person – worked closely together.

Justice Larochelle held that the defence proved by a “preponderance of the evidence” that the purpose of the CRA investigation, which eventually became known as Project Legaux, was to investigate B.T. Céramiques as well as to conduct a criminal investigation into certain CRA civil servants. Justice Larochelle noted that when B.T. Céramiques’ accountant asked CRA officials whether the audit had turned into a criminal investigation, the tax authority denied it. Even the CRA’s so-called Information, a legal document that spells out the grounds for requesting a search warrant, did not paint a true picture of the origin and circumstances surrounding the investigation, noted Justice Larochelle in Agence du Revenu du Québec et Sa Majesté La Reine c. B.T. Céramiques et Francesco Bruno et Gisella Palmerino et Alfredo Magalhaes et Rodolfo Palmerino (540-61-061227-135).

“CRA’s conduct is highly reprehensible,” said Justice Larochelle. The Income Tax Act grants the fiscal authority with “wide discretionary powers in terms of its application and execution. The corollary is the obligation to use it judiciously, in a transparent way and with respect to the Constitution. This case demonstrates that the investigation conducted under the guise of an audit lasted a year. Despite the red flags that were raised and the availability of resources, the case was not re-directed towards an investigation that respected the rules,” added Justice Larochelle.

According to Martin Delisle, a Montreal tax litigator with De Grandpré Chait LLP, the ruling is a “serious notice or reminder” to both federal and provincial tax authorities that they must be transparent and conduct “legally” their audits and investigations. “It’s also a serious reminder that tax authorities cannot conduct investigations under the cover of a regular audit,” said Delisle.

Justice Larochelle also held that the evidence obtained by Revenue Quebec during the course of its own probe against the same company and individuals was inadmissible because it originally emanated from the CRA investigation. That finding seems to suggest that the “fruit of the poisonous tree” doctrine, an American doctrine first described in 1920, too applies in Canadian tax law even though Revenue Quebec argued that this doctrine does not apply either in Canada or in Quebec, said Mostovac. The doctrine holds that if the source (or the tree) of the evidence is tainted, then anything gained (or the “fruit”) from it is tainted as well, noted Mostovac.

“We showed that the tree and the roots were poisoned from day one and that Revenue Quebec was not entitled to the evidence even though they asserted they had acted in good faith and that they should be entitled to use this evidence even though Revenue Canada could not use the information,” said Mostovac.

The ruling also underscores the impractical nature of the seven-prong test elaborated by the SCC in Jarvis to help determine when an inquiry’s purpose is to investigate penal liability, notes Paul Ryan, a Montreal tax lawyer with Ravinsky Ryan Lemoine LLP. Taxpayers often cannot figure out when an audit becomes an investigation, in large part because the Jarvis test is objective and not subjective. “It’s never easy to distinguish at what point in time a civil audit turns into an investigation,” said Ryan. “The Jarvis test in practical terms is not very clear, particularly since when they launch a criminal probe they still want to tax you. So which one is predominant? There are more and more lawsuits being launched over this issue.”

Since the B.T. Céramiques investigation lead to other probes, it is widely expected that defence lawyers will have a field day with the Larochelle ruling. B.T. Céramiques was accused of inflating the expenses of other construction companies, including those owned by construction magnate Tony Accurso, through false billing in order to help them reduce their reported revenues. The B.T. Céramiques inquiry also lead to Project Coche, an RCMP investigation that yielded charges against eight CRA auditors based in Montreal. One of the auditors was convicted earlier this summer on charges of breach of trust and extortion while three others are currently at the preliminary inquiry stage.

“If I am the lawyer of a CRA official, and I am convinced that the warrant obtained against my client has as its source the B.T. Céramiques investigation, then I am going to use it to say that this whole thing is poisoned,” remarked Mostovac.

But that may not be as easy to do as it seems, suggested Ryan. It was widely assumed following the Jarvis ruling that a constitutional breach would lead to a stay on charges. But the SCC’s ruling in R. v. Grant, [2009] 2 SCR 353 created a new test for determining whether evidence obtained by a Charter breach should be excluded. “The Grant ruling has considerably narrowed the remedies that exist when there is a breach,” noted Ryan. “A court must assess and balance the effect of admitting the evidence taking into account the seriousness of the Charter infringing state breach against society’s interest in the adjudication of the case against its merits.”