Law in Quebec

News about Quebec legal developments

Quebec Superior Court

  • Revenue Quebec ordered to pay $2 million in punitive damages

    A Montreal businessman who was forced to shut down his business after Quebec tax authorities mishandled his case was awarded nearly $4 million, including a staggering $2 million in punitive damages, following a precedent-setting ruling by Quebec Superior Court.

    In an extremely harsh judgment that sheds light on Revenue Quebec’s tax collection policies and questions its administrative practices, Justice Steve Reimnitz held that the provincial tax agency abused its powers, acted maliciously and in bad faith, and exhibited unjustified and blameworthy administrative doggedness in the way it handled the tax file of Groupe Enico Inc. and its founder Jean-Yves Archambault. The comprehensive 197-page ruling in Groupe Enico inc. c. Agence du revenu du Québec 2013 QCCS 5189 details a series of bizarre and improbable events, triggered by a dishonest auditor,  that has been likened by Quebec tax lawyers to an absurd “horror story” that “was bound to happen.”

    “There have not been many decisions that have been rendered by the courts where Revenue Quebec has been sued for damages,” pointed out Alexandre Dufresne, a Montreal tax lawyer and managing partner of Spiegel Sohmer. “Not only that, Revenue Quebec lost and the damages were very substantial so in that sense it is a very important decision. The judgment outlines what I would call a horror story – it really was an abusive audit.”

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  • Quebec companies barred from bidding on public contracts have little chance of obtaining legal relief

    Companies that have been barred from bidding on public contracts stand little chance of obtaining injunctive relief that would temporarily suspend a new law aimed at curbing corruption in the construction industry, following a closely-watched ruling by Quebec Superior Court.

    In the wake of allegations of bribes, collusion, influence peddling, and widespread corruption in the construction industry, corroborated by testimony before the Charbonneau commission, the Quebec government passed legislation last December that compels companies to obtain a seal of integrity if they wish to bid on the billion dollars in contracts awarded annually in the Quebec public sector.

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  • Former lawyer ordered to pay $77,000 in damages

    A former lawyer and her companion who made the lives of their neighbours so miserable that they fled to Alberta before even selling their home have been ordered to pay more than $77,000 in damages by Quebec Superior Court recently.

    Sonia Desrosiers, a lawyer no longer enrolled in the Barreau du Québec, and Renée Jetté lodged or penned during a three-year stretch no less than 22 “malicious” complaints and demand letters against their neighbours before the provincial police, fire department, municipality, the Quebec Human Rights Tribunal, and the Society for the Prevention of Cruelty to Animals (SPCA).

    “The defendants have in a well-thought-out manner planned and repeatedly committed different acts with the intention of harming the applicants,” said Judge Charles Ouellet in a 15-page ruling.

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  • A sad reminder that friendship and business do not always mix

    “This case is a sad reminder that friendship and business do not always mix.” So begins a lengthy ruling by Quebec Superior Court Justice Geneviéve Marcotte recounting the sombre saga of a successful Montreal businessman, a former corporate lawyer and his wife.

    It is a story about a friendship that turned so sour that Justice Marcotte ordered Earl Takefman, formerly chief executive officer of a number of public companies, to pay Montreal lawyer Elliot Bier and his wife $20,000 each in moral damages, $25,000 each in punitive damages and nearly $42,000 in extra-judicial fees incurred by the couple in the proceedings, together with legal interest.

    What’s more, Takefman has been ordered to cease and desist from communicating to the Biers or to third parties directly or indirectly in writing, including electronic commu­nications such as emails and text messages, any details on the private life, the assets and property of Elliot and Dawna Bier and their financial situation, save and except to his legal counsel and staff.

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  • Court orders franchisor to pay $16.4 million to franchisees

    In a “sad saga” of a once successful franchise operation that fell precipitously from grace in less than a decade, a nine-year legal battle came to a bittersweet end after Quebec Superior Court condemned Dunkin’ Brands Canada Ltd. to pay 21 Quebec franchisees $16.4 million for failing to protect its brand in the Quebec market.

    In a 43-page ruling, Justice Daniel Tingley castigated the franchisor, formerly Allied Domecq Retailing International (Canada) Ltd. (ADRIC), for trying to pin the blame of its “stunning fall from grace” to the “Tim Hortons’ phenomenon” and underperforming, even poor, franchisees.

    “ADRIC had assigned to itself the principal obligation of protecting and enhancing its brand,” wrote Justice Tingley. “It failed to do so, thereby breaching the most important obligation it had assumed in its contracts.

    “This particular breach was not the result of a single act or omission. It was a failure over a period of a decade (1995 to 2005) to protect the brand brought about by a multiplicity of acts and omissions during the period. Brand protection is an ongoing, continuing and ‘successive’ obligation.”

    Dunkin Donuts has a long history in Quebec, going back to over half a century. In the mid-nineties it was still the leader in the coffee and donut market in terms of sales and number of stores, numbering 218 in 1998. But between 1995 and 2005, virtually all the franchisees experienced stagnant sales, despite a growing fast food market. The Dunkin Donuts’ market share in Quebec had plummeted from 12.5 per cent in 1995 to 4.6 per cent in 2003. Today, only some 13 stores are still operating.

    In stark contrast, Tim Hortons’ stores experienced on average annual sales increases of 7.5 per cent, or over 70 per cent between 1995 and 2005. Tim Hortons’ stores had multiplied five times from 60 stores in 1995 to 308 by 2005, prompting Justice Tingley to observe, “literally, (this is) a case study of how industry leaders can become followers in free market economies.”

    The 21 franchisees have closed their stores or sold them for a fraction of their traditional value, noted Justice Tingley. Until the turn of the century, Dunkin Donuts’ stores could be sold for roughly 50 per cent of annual sales, something that was all but impossible in the new century.

    “This is not a case where the Court has to estimate future damages,” said Justice Tingley. “The franchisees have suffered the losses they claim. They have lost their business; their livelihoods.”

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  • News roundup: Tainted water, a falling-tree fatality and a lawyer fined for tax evasion

    The Minister of National Defence is considering appealing a recent class action ruling that awarded $15,000 to residents of a small town near Quebec City inconvenienced  by the contamination of well water by a known carcinogen.

    Quebec Superior Court Justice Bernard Godbout ruled that the class action suit launched by the townspeople of Shannon failed to prove that trichloroethylene (TCE), a solvent used on a nearby army base to clean artillery and ammunition, was responsible for abnormally-high cancer rates in the town. Shannon, a community of 2,000 people, is located near the Canadian Forces Base Valcartier, a huge military defence complex.

    “The evidence did not demonstrate that it is probable that the spilling of TCE contaminated the groundwater under the municipality of Shannon, making it the cause of an abnormally-high number of cancer cases, disease and other allergic reactions,” Godbout wrote in his judgment.

    Justice Godbout found however that the contamination of well water of TCE was an inconvenience to residents and ordered the government to pay compensation of $15,000 to about 300 affected residents who were among the 2,700 present and former residents lending their name to the class-action suit.

    “We will review the decision in order to evaluate next steps,” said Minister of National Defence Peter MacKay in a press release.

    In August 2006, a 27-year old Quebecer was in the driver’s seat of his parked car when an old poplar tree crashed down onto his vehicle during a violent storm, and killed him.

    A coroner’s report on Gabriel Rossy’s death confirmed the tree that fell on him was found to be 90 per cent rotten and had been “dangerous” for at least one or two years.

    His family sued the City of Westmount for failing to maintain the tree, but a Superior Court judge dismissed the action, saying it was a matter that should be dealt with through the province’s Automobile Insurance Act – a ruling that was overturned by the Quebec Court of Appeal in November 2010 who found that the car had nothing to do with Mr. Rossy’s death.

    In a ruling that marked the first the Supreme Court of Canada tackled Quebec’s no-fault insurance plan, the nation’s highest court restored the lower court ruling and dismissed the lawsuit against Westmount. The top court ruled Rossy was using his vehicle as a means of transportation when the accident occurred, and as a result his family must turn to Société de l’assurance automobile du Québec (SAAQ), the provincial automobile insurance board, for compensation.

    “This is enough to find that the damage arose as a result of an “accident” within the meaning of the Act and that the no-fault benefits of the scheme are triggered. Therefore, the respondents’ civil claim is barred and they must turn instead to the SAAQ for compensation,” wrote the SCC in a 7-0 decision.

    “The Court of Appeal erred in interpreting the Act too narrowly,” added Justice Louis LeBel who penned the decision. “Such an interpretation risks unduly restricting the  intended application of Quebec’s no-fault scheme and must therefore be rejected.”

    A Montreal lawyer, charged following a Canada Revenue Agency investigation of an art-donation scheme, was fined $840,000 after pleading guilty to a tax evasion charge before the Court of Quebec.

    Stéphane Saintonge “voluntarily contravened the Income Tax Act in 2003 by enabling a third party to obtain an ineligible amount of tax deductions for the donation of artwork to the Municipality of Larouche,” said Canada’s Revenue Agency.

    The scheme consisted of backdating a series of transactions in order to unduly boost the tax credits claimed, according to the Revenue Agency.

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  • Class action authorized against three accounting firms in Mount Real financial scandal

    Nearly six years after 1,600 investors were bilked, left holding an estimated $130-million of worthless promissory notes when Montreal financial group Mount Real Corp. was shut down by the Quebec securities regulator, a Quebec judge authorized a class action against two former executives, two financial service companies and three accounting firms.

    In a ruling that appears to have lowered the bar for class action certification against accounting firms, Quebec Superior Court Justice Jean-François Buffoni held that the representative plaintiff demonstrated that the allegations she is trying to establish between the fault allegedly committed by the accounting firms and the harm suffered by the class does not “appear to be frivolous nor manifestly unfounded” and stands a reasonable chance of succeeding, even though the representative plaintiff admitted that she did not rely on the audited financial statements to make an investment decision.

    “This ruling represents an important precedent regarding the civil responsibility of accounting firms,” noted Bruce Johnston, a Montreal lawyer for one of the three law firms representing the investors. “I hope it sends a message to auditors. It’s very important that auditors do their work properly and be held accountable if they fail to do so.”

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  • Doing business in China – With rewards comes risks

    When Montreal toy maker Mega Brands Inc. was awarded $1.3 million by Quebec Superior Court following a legal tussle with a Chinese supplier, it highlighted the perils of doing business abroad but also underscored the value of putting pen to paper a comprehensive, detailed and binding contract that clearly spells out the obligations of each party.

    Keen to strengthen ties with the world’s fastest-growing economic juggernaut, Canadian business all too often gloss over the risks and exposure of doing business with Chinese suppliers. Risk management is frequently eschewed, due diligence shirked, and contracts inadequately drafted.

    “What is so surprising is that in Canada even small business would not conceive of entering into a relationship without having a contract, yet when we go into China we lose our minds and don’t undertake the due diligence because we are so eager to have the business relationship,” observed Cyndee Todgham Cherniak, a leading lawyer in international trade.

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  • Anti-SLAPP – A look at Quebec developments

    Barely three weeks after a Quebec judge rendered a landmark ruling that dismissed a $150,000 action after it was held to be a strategic lawsuit against public participation, otherwise known as SLAPPs, a national organization approved a Model Act aimed at reinforcing existing remedies to deter abusive lawsuits.

    In an eagerly awaited judgment, Quebec Superior Court Justice Danielle Turcotte found that a defamation suit launched by Les Constructions Infrabec Inc. against a citizen who asked questions at a municipal council meeting was “motivated by an attempt to intimidate,” marking the first time that a ruling has applied an anti-SLAPP bill sanctioned by the Quebec government on June 2009.

    Only Quebec has anti-SLAPP legislation. In April 2001, British Columbia enacted anti-SLAPP legislation but it was short-lived as it was repealed five months later. Anti-SLAPP bills were also introduced in New Brunswick in 1997 and in Nova Scotia in 2003, but were never passed.

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  • News roundup – Impaired driving, tax evasion & co-founder suing law firm

    About 2,500 Quebecers are challenging impaired driving charges, a situation that is becoming “less and less manageable,” according to the Quebec Attorney General.

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  • News roundup – Tainted water class-action, asbestos & $4.3 million condemnation

    Days before a class-action over tainted water opened, a lawyer representing citizens living in Shannon, a small town in Quebec, in its legal battle against the federal government and an ammunition company faced an audit by federal tax authorities. “I tried to explain that I should be devoting all my time to the trial for the next six months, asking them to delay the audit until July but they said no,” said Charles Veilleux. Questions are surfacing around the timing of the audit.

    A Quebec university suspended, with salary, a professor teaching psychology. Paul Bellemarre, a psycholgist, was suspended from practicing for two years by the Ordre des psychologues du Québec (a professional corporation that oversees psychologists) for committing uncalled for gestures on two patients several years ago, one of whom was a psychology student at the university. The Université du Québec à Trois-Rivières has been criticized for reacting slowly.

    The Supreme Court of India rejected an appeal to ban asbestos, on the grounds of “lack of specific data.” The nation’s highest court said that ‘what is required is better supervision and regulatory control rather than banning of the activity.” A  consortium of international investors that wants to buy Jeffrey mine in Asbestos, Quebec and increase chrysotile exports to developing countries salutes the landmark decision while groups calling for its ban decry the latest in “a long line of missed opportunities.”

    Quebec Superior Court ordered an enterprise, Roch Lessard 2000 Inc.,  to reimburse $4.3 million, plus court costs and interest, to the town of Saint-Augustin in Quebec, for failing to respect the terms of a contract it obtained to clean up muncipality’s water. The enterprise began its work in 2000 but stopped two years later after it sought to renogiate terms of the contract. The town used the services of another company to complete the work.

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  • News roundup – Alcoa charged, accountant sues tax man, & slow justice

    Following an investigation by Transport Canada, the world’s leading producer of aluminum has been charged with two counts of failing to ensure the health and safety of a man who died in an accident at the Alcoa smelter in Baie Comeau, Quebec, some 400 km northeast of Quebec City.

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  • Growing trend of unrepresented litigants is disturbing, says judge

    The surging number of unrepresented litigants trying to navigate the complex demands of law and procedure may leave legislators with little choice but to review and enact simplified rules of practice to make justice more accessible, said the chief justice of Quebec’s Superior Court at a conference examining the disturbing trend.

    The figures are alarming, with an average of 37 per cent of parties representing themselves in civil matters before Quebec Superior Court, revealed Judge François Rolland. In divorce cases before Quebec Superior Court, 36 per cent of Quebecers are unrepresented litigants, a figure that rises to 42.1 per cent in family matters dealing with child custody and separation. Almost 42 per cent of parties appealing a sentence in criminal matters before Quebec Superior Court are unrepresented litigants while 38.8 per cent of individuals facing a motion that could authorize their psychiatric treatment do not have legal representation, prompting Justice Rolland to remark that if anybody “should be represented it seems to me it’s the treatment cases.”

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  • Law society urges improvements for people suffering from mental illness

    The figures are disturbing. Barely five per cent of individuals facing a motion ordering their psychiatric confinement were represented by a lawyer before the Court of Quebec in the small town of Alma in the Saguenay–Lac-Saint-Jean region. In neighbouring Chicoutimi, the figures over a ten-year stretch between 1998 and 2008 were just as appalling. The situation was not much better in Montreal, with less than 25 per cent of individuals facing the same fate even present at such hearings, and of those scarcely half had legal representation.

    Spurred by the wrongful conviction of an intellectually disabled Quebec City man who served six years in prison after confessing to a series of sexual assaults that a DNA test proved he did not commit, a sober report penned by a nine-member committee of the Barreau du Québec issued a slew of recommendations to improve the way the provincial justice system deals with people afflicted with mental illness or suffering from intellectual disabilities.

    “We must absolutely find ways to treat people with mental illness or the intellectually handicapped just like every other citizen,” remarked Jean-Pierre Ménard, a Montreal lawyer specializing in health and medical liability who was part of the committee. “People who are afflicted with mental health problems face atypical legal procedures that infringe fundamental rights. So it is unacceptable that the justice system allows these people to be treated without the right to defend their rights.” (more…)

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  • Quebec Court of Appeal nixes children’s access to English schools

    In a ruling that deftly circumvented the politically sensitive issue surrounding Quebec’s controversial language law while underlining the need to respect the “boundaries” established by the nation’s highest court, the Quebec Court of Appeal overturned a lower court judgment that would have temporarily allowed ten private-school students from pursuing their studies at English-language schools.

    In an 11-page ruling rendered just two days after Quebec Superior Court granted a safeguard order that allowed the children of nine families to attend government-subsidized English schools until an administrative tribunal ruled on whether they have the right to do so, Appeal Court Justice Pierre Dalphond held that granting the students an exemption would not be in the public interest because it could lead to “serious problems” on the eve of the new school year. (more…)

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Law in Quebec
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