Weekly recap – 20 Jan 2024

Weekly recap - Jan 20, 2024


A road construction company has been ordered to pay $1.5 million under an agreement to settle an action concerning alleged bid-rigging for paving contracts awarded by the ministère des Transports du Québec (MTQ) in the Granby region of Québec, according to the Competition Bureau.

The payment is part of a settlement between the Public Prosecution Service of Canada and Construction DJL Inc. filed before Quebec Superior Court.

The settlement, which ends the Competition Bureau’s investigation into the role the company played in a bid-rigging scheme between 2008 and 2009, took into account that the company previously reimbursed overpayments related to the bid-rigging scheme through the Government of Québec’s Voluntary Reimbursement Program. It also took into consideration that the individuals involved in the scheme no longer work for the company.

Quebec Superior Court ordered Construction DJL to follow a corporate compliance program and maintain appropriate control procedures to ensure its effectiveness.

Criminal charges were laid in September 2023 before the Court of Quebec against two individuals in connection with alleged bid-rigging for paving contracts awarded by the ministère des Transports du Québec. One of the executives was the vice president of operations while the other was vice president, secretary and general manager.



The battle over how to classify digital assets is still raging.

A series of recent decisions by the Quebec Financial Markets Administrative Tribunal held that crypto contracts, non-fungible token contracts and crypto futures meet the definition of securities because they are investment contracts.

In a closely watched crypto case south of the border, Judge Jed Rakoff of the Southern District of New York held that four crypto tokens offered by Terraform Labs were unregistered securities. “Defendants’ first argument (that those digital assets are not investment contracts) in effect asks this Court to cast aside decades of settled law,” said Judge Rakoff in 23-cv-1346 (JSR). “The Supreme Court held in no uncertain terms that ‘an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.’

The U.S. Securities and Exchange Commission sued Terraform and co-founder Do Kwon, alleging they offered and sold unregistered securities as part of a fraudulent scheme that wiped out at least $40 billion in market value. It is part of the regulator’s efforts to crack down on unregistered securities, including the likes of Coinbase, Kraken, and Ripple.



Smokers beware. Landlords too.

The Quebec Rental Board gave a landlord the go-ahead to evict a tenant from Joliette, some 70 kilometres east of Montreal, in part because he refused to stop smoking cigarettes and marijuana. In another case, a landlord was ordered to pay $1,000 in moral damages to a tenant because she experienced “various moral inconveniences” due to cannabis odours and smoke seeping into her home.

All told, the Quebec Rental Board heard more than 50 cases in 2023 dealing with complaints of cigarette and marijuana smoking.

The price that condominium owners can pay for breaching smoking regulations can be far steeper. In Syndicat des copropriétaires du condominium Club Marin II c. Mokaddem, 2023 QCCS 4126, Quebec Superior Court Justice Martin Sheehan ordered a condo owner to pay more than $100,000 in extrajudicial fees to a condo corporation. He was also ordered not to smoke cannabis in the building, his balcony, or in any and all common areas of the building. “Bylaws prohibiting co-owners from smoking in their private areas have already been deemed valid by the courts,” noted Justice Sheehan. “These are justified by the health risks posed by second-hand smoke and the inconvenience caused by odours.”



The Federal Court of Canada became the latest court to issue a notice over the use of artificial intelligence in court proceedings.

Following on the heels of other courts such as Quebec Superior Court, Alberta courts, Nova Scotia’s Supreme and Provincial Court, and the Manitoba Court of King’s Bench, the Federal Court will require all parties, lawyers and intervenors to issue a declaration when using AI to prepare documentation filed with the Court.

Barry Sookman, senior counsel and co-chair of McCarthy Tétrault’s technology law group, believes the requirement is “overly broad and could actually impede the use of innovative legal tools.” It is problematic, states Sookman, that the declaration appears to be required even where a human is in the loop and has done a proper job of verifying the AI generated content.

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