Quebec notaries can now heave a huge sigh of relief after the Court of Appeal found that their duty to inform depends on the circumstances and relationship they have with their client.
Nearly two years ago, Quebec Superior Court found that a notary had committed a professional fault for failing to inform the testatrix of the foreseeable legal consequences arising from a will.
Justice Marc St-Pierre, alluding to Article 16 of the Quebec Code of Ethics of Notaries (Code), which provides that a notary must inform parties of “normally foreseeable legal consequences,” held that it was “clear” that (the notary) has not fulfilled this obligation.”
Justice St-Pierre added, in Succession de Caron c. Malenfant, 2019 QCCS 5440:
“In fact, even if the Code of Ethics of Notaries specifically provided for tax consequences as part of their duty to advise, and even if (the notary) did not have the mandate to prepare a tax plan, as his attorney pointed out, the Court is of the opinion that he could have at least warned his client that it would be her husband who would pay the tax on the income properties bequeathed to his consanguineous family.”
The notary was held partly liable for harm suffered, and was ordered to pay more than $250,000 in damages and over $50,000 in extrajudicial fees.
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The judgment was appealed. The notary, supported by the Liability Insurance Fund of Quebec Notaries, argued that he warned the deceased of the tax consequences of his death on the income properties and that there is no proof that the deceased would have changed his will if he had not done so.
The Quebec Court of Appeal overturned the ruling.
In a succinct ten-page decision the three-member panel of judges found that a notary’s liability may be incurred when he commits a fault in the exercise of his professional duties, which includes the duty to inform the parties to an act or agreement. That is a duty plainly outlined by Article 16 of the Code, added the Appeal Court in Succession de Caron c. Lemieux, 2021 QCCA 1676.
But the duty to provide information must be “assessed in the particular context in which the notary’s services are rendered.” It also varies according to the knowledge of the parties and their relationship with the notary, pointed out the Appeal Court.
In this case the Appeal Court found that the trial judge committed a manifest and decisive error as he “wrongly imputes to the notary a duty that was not his responsibility.” The notary did not have a mandate to advise his client on the tax impact of the legacies by particular title, found the Appeal Court.
Although there may be circumstances in which such a mandate could be implied, this was not the case, added the appellate court.
At the time the will was written, the client was on her deathbed and the notary was called to the hospital to put the client’s last wishes in a notarized will. They did discuss each provision of the will, including a provision that stated that the duties and taxes payable due to her death would be paid by the succession. But the notary was not asked to provide an opinion on the tax implications of bequests and was not given any information to do so, held the Appeal Court.
The notary had no obligation to provide the client with information regarding the tax treatment of the immovables, concluded the Appeal Court. “Nor did he have any general obligation in this regard.”