Commercial Litigation

Overview

We believe it is as important to prevent lawsuits as it is to settle them. That is why our commercial litigation team is prepared to take the appropriate actions at every step of the process, whether legal proceedings are planned or not. By combining their extensive litigation experience with the know-how of their network of professionals, they will easily meet your highest expectations.

Whether you are a major corporation or an SME in the manufacturing, financial services, real estate, distribution, or new economy sectors, you will find the answers you seek. Lavery’s expertise in this field is recommended by the Canadian Legal LEXPERT Directory.

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  1. A judge grants application to dismiss medical resident’s recourse for a second time and, of his own motion, considers declaring her quarrelsome

    On November 15, 2024,1 in Bouchelaghem v. Université Laval,2 Superior Court Mr. Robert Dufresne granted an application for dismissal on the grounds of res judicata and abuse. His judgment is a reminder of the importance of the presumption of judgments’ validity and stability, principles linked to the authority of res judicata. To put Mr. Justice Dufresne’s decision in context, it is important to explain plaintiff’s first recourse, which led to an initial judgment by Mr. Justice Bernard Tremblay, J.S.C., granting an initial application for dismissal.3 First recourse The plaintiff was as a doctoral student outside Canada and the United States. In July 2019, she began a residency program in family medicine. On November 24, 2020, the program’s Promotion Committee for the Faculty of Medicine decided to exclude the plaintiff from the program due to her results in the residencies completed to that date.4 On December 2, 2020, Plaintiff appealed this exclusion before the Faculty of Medicine’s Appeals Committee.5 On February 4, 2021, this committee held a hearing that ended with the Promotion Committee’s decision being upheld.6 On February 8, 2021, the Dean of the Faculty of Medicine communicated the Appeal Committee’s decision to the plaintiff.7 That same day, the plaintiff contacted the Dean to complain about the Appeal Committee’s decision.8 On February 18, 2021, the Dean reiterated to the plaintiff the contents of the Appeal Committee’s decision and informed her that the decision was final.9 All internal remedies had been exhausted. On May 17, 2022, the plaintiff filed an application against Université Laval for annulment of the final decision rendered on February 8, 2021, by the Appeal Committee, titled Demande introductive d'instance associée [à un] pourvoi en contrôle judiciaire (“Originating application associated with an appeal for judicial review”). In this 442-paragraph proceeding, she sought reinstatement in the family medicine residency program, plus damages. While a challenge to an exclusion decision must be made within a reasonable time,10 usually 30 days according to jurisprudence, the plaintiff initiated her appeal almost 15 months after her exclusion from the residency program. On September 28, 2022, the University therefore filed an application to dismiss her case, on the grounds that the delay in initiating it was unreasonable and that the plaintiff did not cite any valid exceptional circumstances in her proceedings to justify this delay.  On May 15, 2023, Mr. Justice Tremblay, J.S.C., concluded that the plaintiff’s recourse qualified as an application for judicial review and that it had been filed late.11 For these reasons, he declared the recourse inadmissible and dismissed it in its entirety, since he also considered that the damages claimed by the plaintiff arose directly from her exclusion from the residency program.12 Dissatisfied with Mr. Justice Tremblay’s decision, the plaintiff served the University with a Demande de permission d’en appeler d’un jugement mettant fin à l’instance (“Application for leave to appeal a judgment ending the proceeding”). On September 19, 2023, Ms. Justice Gagné, J.C.A., dismissed the plaintiff’s application for leave to appeal,13 thereby confirming the finality of the initial decision and giving res judicata to Mr. Justice Tremblay’s ruling. Second recourse On January 30, 2024, the plaintiff initiated a new action against Université Laval, this time titled Demande introductive d'instance en dommages et intérêts (“Originating application for damages”), in which she claimed a total amount of nearly $9.5 million from the University. This 213-paragraph proceeding largely repeated the allegations made in the first recourse, generally accusing the same parties of the same faults. However, the plaintiff had removed all allegations relating to the application for judicial review and the justification for her delay in pursuing a recourse, choosing instead to group her complaints against each representative or member of the University. The University filed a Demande en irrecevabilité pour cause de chose jugée et en rejet pour abus (“Application for dismissal on the grounds of res judicata and abuse”)against this new recourse, considering that the plaintiff was attempting to revive a dispute that had already been decided by the Quebec courts, and that she had already availed herself of her right of appeal. In response to the University’s application for dismissal, the plaintiff amended her originating application to add thirteen (13) defendants, namely the individuals targeted by her allegations.  The hearing on the defendants’ application for dismissal on the grounds of res judicata and abusetook place on October 9 and November 7, 2024, before Mr. Justice Dufresne. The law The principle of res judicata is codified in article 2848 of the Civil Code of Québec. To establish the legal presumption of validity of judgments (res judicata), two conditions must be met: Triple identity must be established to ensure that the same cause, between the same parties applying for the same purpose, has already been decided.  The judgment in a contentious matter must be rendered by a competent court and must be final.14 Before beginning his analysis of the triple identity, Mr. Justice Dufresne first examined this second criterion. He noted that the judgment in a contentious matter was rendered by a court of competent jurisdiction, since Mr. Justice Tremblay was seized of the application for dismissal. He also concluded that the judgment had become final as more than thirty days had elapsed since its pronouncement and permission to appeal had been refused. The second criterion is therefore satisfied.15 Mr. Justice Dufresne then proceeded to analyze the triple identity criterion. He found it had been established that the parties were legally identical in both recourses. Hundreds of allegations were compared between the first and second recourses, as were dozens of exhibits produced in support of both proceedings.16 He also noted that the plaintiff formulated the same complaints in both recourses, although the way of describing those to whom they were addressed was somewhat different. He put it this way: “[24] The faults, failures and complaints raised before Mr. Justice Tremblay, J.S.C., against the defendants are the same as those raised in the present case. Those responsible are identified. Whether they are identified as managers, employees or civil servants, does not change the fact that, legally, the defendant is the same in both recourses." As recognized in jurisprudence, adding defendants to a recourse does not prevent the court from finding that the parties are identical, since this identity does not have to be perfect.17 As for identity of cause, Mr. Justice Dufresne noted that although the vocabulary is sometimes different, the complaints of bad faith, falsification of documents, illicit and illegal application of standards, violation of certain fundamental rights, and discrimination are repeated or renewed from one proceeding to the next. In both recourses, the plaintiff raises the same issues (which she confirmed when examined by the judge on this subject during her closing arguments).18 The second recourse again sought compensation for the harm resulting from the plaintiff’s exclusion from her residency program. Mr. Justice Tremblay had already ruled that the plaintiff’s damages stem from her exclusion from the program. He had already concluded, in his judgment of May 15, 2023, that the entire recourse is inadmissible.19 Finally, on the question of identity of purpose, Mr. Justice Dufresne wondered whether the new recourse would expose the court to contradict an earlier decision. He soon discovered that this was indeed the case; allowing the plaintiff’s recourse would require rejecting the conclusions of the previous judgment.20 The abusive nature of the recourse Mr. Justice Dufresne then considered whether the plaintiff’s recourse was abusive. He considered this to be the case, since the plaintiff was repeating the allegations of a recourse that had already been dismissed. He concluded that she has not acted in good faith and that she was trying to harm the people she holds responsible for her exclusion: “[41] These modifications, by adding defendants and increasing the amount claimed, constitute an excessive and unreasonable use of proceedings. This only serves to harm these people, whom the plaintiff holds culpably responsible for her exclusion from the Program. This is a misappropriation of the ends of justice, whereby the plaintiff is attempting to take justice into her own hands to make these people pay for their faults. Moreover, the plaintiff appears to meet many of the criteria for being declared quarrelsome.” [Our translation] In closing, Mr. Justice Dufresne reminds us that article 51 C.C.P. allows the Court to act, even of its own motion, when a party engages in vexatious or quarrelsome behaviour. He considers that the plaintiff meets several criteria that would allow her to be declared quarrelsome. He mentions having examined these criteria and having considered doing so, but given that the plaintiff did not have the opportunity to present her arguments on the question of quarrelsomeness at the hearing, he concludes that he could not act in violation of the audi alteram partem principle. He grants the University’s application for dismissal on the grounds of res judicata and abuseand dismissed the plaintiff’s recourse in its entirety. Conclusion The principle of res judicata, codified in article 2848 of the Civil Code of Québec, is a pillar of our legal system. Once a court has rendered a final decision, that judgment cannot be called into question again. In the Bouchelaghem case, Mr. Justice Dufresne had to examine numerous allegations and exhibits, and he came to the conclusion that despite the different wording of the allegations and the addition of thirteen parties as defendants, the nature of the plaintiff’s second recourse remains in practice identical to the first. This judgment is a reminder that excessive and unreasonable use of proceedings, with the aim of harming the opposing party, can lead to a party being declared quarrelsome and having to pay additional costs, at the initiative of the judge hearing the case, even without an application from the party subject to the complaints. The plaintiff applied for leave to appeal Mr. Justice Dufresne’s judgment. On February 12, 2025, Mr. Justice Michel Beaupré of the Quebec Court of Appeal dismissed this application.21 The case was pleaded on October 9 and November 7, 2024. 2024 QCSC 4232. The plaintiff filed an application for permission to appeal this decision on December 30, 2024. The hearing is scheduled for February 11, 2025. Bouchelaghem v. Université Laval, 2023 QCSC 4483. Bouchelaghem v. Université Laval, 2023 QCSC 4483 para. 8. Id., para. 9. Id., para. 10. Id., para. 10. Id., para. 149. Id., para. 151. An application for judicial review must be filed within a reasonable time, in accordance with article 529 para.3 C.C.P. Bouchelaghem, supra note 3, para. 116 and para. 162 to 165. Id., para. 120 to 125. Bouchelaghem v. Université Laval, 2023 QCCA 1443. Bouchelaghem v. Université Laval, supra note 2, para. 16. Id. Bouchelaghem v. Université Laval, supra, note 2, para. 23. Bouchelaghem v. Université Laval, supra, note 2, para. 8. Bouchelaghem v. Université Laval, supra, note 2, para. 27-28. This was also noted by Ms. Justice Gagné, J.C.A., in her judgment dismissing the application for leave to appeal, supra, note 13, para. 6. Bouchelaghem v. Université Laval, supra, note 2, para. 36. Bouchelaghem c. Université Laval, 2025 QCCA 144.

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  2. The elected domicile appearing in the Québec Enterprise Register cannot provide a basis for the Superior Court’s territorial jurisdiction within the meaning of article 41(3) of the Code of Civil Proce

    Introduction On July 11, 2024, the Court of Appeal1 rendered a decision that, for the first time, addresses the question of whether the elected domicile appearing in the Québec Enterprise Register (the “REQ”), established under the Act respecting the legal publicity of enterprises,2 can provide a basis for the Superior Court’s territorial jurisdiction within the meaning of article 41(3) of the Code of Civil Procedure.3 Upholding the decision rendered by the Superior Court,4 the Court of Appeal answered that it cannot. The Facts On April 25, 2023, Promark Electronics Inc. and Electrical Components International Inc. (collectively, “Promark”) filed a claim for damages against Bombardier Recreational Products Inc. (“BRP”) in the judicial district of Montréal, alleging that a letter of agreement had been terminated and related purchase orders cancelled. On June 22, 2023, BRP raised a declinatory exception asking the court to issue an order transferring the case to the judicial district of Bedford, where its head office is located. Promark argued that filing its claim in the judicial district of Montréal was warranted because of BRP’s elected domicile indicated in the REQ, which corresponded to the office of its counsel located in Montréal. On September 5, 2023, the Honourable Tiziana Di Donato, J.S.C. (the “Judge”) allowed BRP’s declinatory exception and issued an order referring the case to the judicial district of Bedford. On November 10, 2023, the Honourable Stephen W. Hamilton, J.C.A., granted leave to appeal the Judge’s decision, indicating that the courts have never settled the question of whether the domicile elected under section 33 ALPE is sufficient to make paragraph 3 of article 41 of the C.C.P. apply. He added that it appeared to him that the lower courts had rendered contradictory judgments in this regard.5 The Trial Judgement The Judge began by pointing out that, generally, for a purely personal action, the judicial district of the defendant’s domicile is the natural forum (article 41(1) C.C.P.) and that, in the case of a corporation, the domicile would be that of its head office. The Judge further clarified this principle by explaining that, where more than one judicial district has jurisdiction, the plaintiff may institute its proceedings before another court having territorial jurisdiction (article 42 C.C.P.), provided that it establishes that it is entitled to make such an election. In support of its contestation to the declinatory exception, Promark argued that it was entitled to institute the proceedings in the judicial district of Montréal because BRP had elected its domicile under the ALPE, and that, consequently, that district constituted an “elected domicile” under article 41(3) C.C.P., which reads as follows: So far as public order permits, the court of the defendant’s elected domicile, or the court designated by an agreement between the parties other than a contract adhesion, also has territorial jurisdiction. [Our emphasis] To render her decision, the Judge determined that article 41(3) C.C.Q. should be interpreted using modern rules of statutory interpretation, adding in particular that it is useful to refer to prior provisions of a law to ascertain the legislature’s intent. The Judge thus revisited the legislative history of article 41 C.C.P., affirming that it essentially restates the prior law, in particular article 68 of the former Code of Civil Procedure, CQLR c. C-25, which provided in paragraph 1, subparagraph 1 that “. . . a purely personal action may be instituted: (1) [b]efore the court of the defendant’s real domicile or, in the cases contemplated by article 83 of the Civil Code, before that of his elected domicile.” Although paragraph 3 of article 41 C.C.P. no longer specifically refers to article 83 of the Civil Code of Québec (the “C.C.Q.”)6 the Judge, following an interpretive analysis, found that said article still applies to determine whether a party has elected domicile, and stressed the fact that the election of domicile must be express and unequivocal. The Judge added that election of domicile is the exception and must be interpreted restrictively.  As for the scope of an election of domicile under the ALPE, the Judge pointed out that subsection 33(1) ALPE indicates that a business may elect domicile and appoint a person to “receive documents for the purposes of this Act.” Article 98(5) ALPE also indicates that the domicile elected by a business under the ALPE is intended to inform third parties of the address where the business wishes to receive documents “for the purposes of this Act.” The Judge was thus of the opinion that sections 33(1) and 98(5) ALPE, as drafted, cannot have the scope that Promark seeks to ascribe to them, as they are clear and they do not need to be interpreted. In the case of an election of domicile under the ALPE, the purpose of the election is to provide an address where documents can be sent to the business, unless there is specific evidence to the contrary. For these reasons, the Judge allowed the declinatory exception and referred the case to the judicial district of Bedford. The Judgement on Appeal From the outset, the Court of Appeal confirmed that the Judge did not commit a reviewable error: (1) the domicile elected for purposes of attributing territorial jurisdiction under article 41 (3) C.C.P. is the domicile designated by the parties for the execution of their agreement within the meaning of article 83 C.C.Q., and (2) the domicile elected under the ALPE is elected for the purposes of applying the ALPE (para. 23). The Court of Appeal is of the opinion that the Judge’s decision is consistent with what the legislature had prescribed in article 68 of the former Code of Civil Procedure and upholds stability in the law, which is particularly important in matters of jurisdiction. After analyzing the parliamentary debates surrounding the enactment of article 41 C.C.P. and the Commentaires de la ministre de la justice, the Court indicated that there is a presumption of the survival of the existing legal rule and that, contrary to what the appellants claimed, the wording of article 41 C.C.P. and articles 33 and 98 ALPE do not give the courts territorial jurisdiction other than that of the defendant’s domicile. The removal of the reference to article 83 C.C.Q. in article 41 C.C.P. does not constitute a clear indication of the legislature’s intent to set aside the requirements of article 83 C.C.Q., under which, for the purposes of determining territorial jurisdiction, the parties must establish the elected domicile in their agreement. On that basis, the Court of Appeal dismissed the appeal without costs and confirmed the Judge’s reasoning that territorial jurisdiction of the courts under article 41(3) C.C.P. is established based on the election of domicile made under article 83 C.C.Q., and not on the election of domicile made by a corporation under the ALPE, whereby a business elects a domicile for the purposes of the application of that law. Conclusion This case serves as a reminder that the C.C.Q. establishes the general law in our province. It is therefore important to refer to it when interpreting other laws enacted by the Quebec legislature. Because the legislature is “deemed to know its legislative fabric as well as the existing law,”7 the Court cannot interpret a given law—such as the ALPE—in a way that would amend a substantive statutory provision of general application—in this case, the C.C.Q.—where there is no clearly expressed intention to that effect. Promark Electronics Inc. c. Bombardier Recreational Products Inc., 2024 QCCA 906 CQLR, c. P-44.1 (the “ALPE”) CQLR, c. C-25.01 (the “C.C.P.”) Promark Electronics Inc. c. Bombardier Recreational Products Inc., 2023 QCCS 3405 Promark Electronics Inc. c. Bombardier Recreational Products Inc., 2023 QCCA 1427, para. 8 83. “The parties to a juridical act may, in writing, elect domicile with a view to the execution of the act or the exercise of the rights arising from it. Election of domicile is not presumed.” Promark Electronics Inc. c. Bombardier Recreational Products Inc., 2024 QCCA 906, para. 24

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  3. A tenderer’s failure to comply with the preliminary complaint process as part of a municipality’s public call for tenders leads to a fin de non-recevoir

    Introduction On June 14, 2024, the Superior Court of Québec issued a decision1 interpreting section 938.1.2.2 of the Municipal Code of Québec, which came into force in 2019. This provision gives a person interested in participating in the awarding process the opportunity to file a preliminary complaint about a requirement in the tender documents that they believe does not ensure the honest and fair treatment of tenderers. To our knowledge, this is the first time a court has considered the impact on a claim for damages for loss of profits2 when an unsuccessful tenderer fails to comply with this relatively new provision  The Superior Court concluded that a tenderer’s failure to submit a complaint in a timely manner should be considered as [translation] “a form of fin de non-recevoir, or at the very least, a break in the chain of causation between the alleged fault and the damages claimed” (paragraph 40). Facts The dispute at hand pitted Transport Martin Forget Inc. (“Transport Forget”) against the Municipality of Saint-Alexis (the “Municipality”). On May 6, 2019, the Municipality issued a call for tenders for a snow clearing and salting contract. Transport Forget submitted the lowest bid, which was $150,000 below that of the winning tenderer. Transport Forget was excluded from the call for tenders given its failure to comply with the tender specifications requiring it to provide a Régie du bâtiment du Québec (“RBQ”) licence number, together with an attestation that its licence was in good standing. Further to the Municipality’s refusal to award the contract to Transport Forget, it claimed $300,000 in damages for alleged loss of profits. Transport Forget believed that its tender was compliant, that the RBQ licence requirement imposed by the Municipality was frivolous and unreasonable, that the Municipality failed to uphold the principle of equal treatment of tenderers and that the complaint process provided for in section 938.1.2.2 of the Municipal Code of Québec did not deprive it of its rights. As for the Municipality, it considered the irregularity in Transport Forget’s tender to be major and Transport Forget’s failure to comply with the complaint process concerning this requirement—both reasonable and in the public interest—was fatal to its legal action. The evidence showed that the RBQ licence number provided in Transport Forget’s tender was invalid and that Transport Forget deliberately chose not to renew said licence before submitting its tender, as it was unsure as to whether it would win the bidding process and wished to avoid needlessly paying the $1,000 annual fee required for the licence renewal. Applicable principles In order to determine the outcome of this dispute, the Court analyzed the case based on the decision in Tapitec,3 a landmark ruling in tendering matters. It reiterated the Court’s view that the decisive factor in determining whether an irregularity is minor or major is the equal treatment of tenderers. It also pointed out that municipalities can set out conditions aimed at limiting the number of tenderers, provided that this is done for an important and legitimate purpose. As for section 938.1.2.2 of the Municipal Code of Québec, the Court viewed it as a mechanism for monitoring all contracts awarded by public bodies which is designed to establish a process to ensure compliance with the principles of integrity needed to protect the public interest. According to the Court, the legislator’s intention is also to protect small municipalities such as the one in question (with a population of approximately 1,500) from potential legal action following the opening of tenders by ensuring that issues concerning the principle of equal treatment of tenderers are resolved prior to the tendering process. Tenderers that fail to comply with this requirement will not be entitled to claim damages for loss of profits, as in this case, except where there has been fraud or blatant bad faith, as in cases of collusion. The purpose of the provision in question is to prevent a tenderer that is aware of the requirements set out in the tender documents from contesting such requirements after the fact. Decision The Court found that the requirement to hold an RBQ licence number was a condition intended to limit the number of tenderers, which the Municipality was entitled to do. Although the Court recognized that there is no correlation between being able to perform snow clearing operations and holding an RBQ licence, it accepted the evidence that this condition was an appropriate and quick way for the Municipality to ascertain the credibility and organizational skills of tenderers, which was a important and legitimate objective. The Court therefore concluded that this requirement of the tender specifications was neither frivolous nor arbitrary. The Court considered the irregularity in Transport Forget’s tender to be major. Although the obligation to hold a valid RBQ licence is neither a requirement of public policy nor a substantive requirement, it is intended precisely to proscribe the lack of seriousness shown by Transport Forget when it opted not to pay the renewal fees for its RBQ licence before submitting its tender. The Municipality exercised its administrative discretion in a reasonable manner and ensured that all tenderers were treated equally. The Court found that the Municipality was right to reject Transport Forget’s tender. Although the Court dismissed the claim, it did nevertheless consider section 938.1.2.2 of the Municipal Code of Québec. In the Court’s view, Transport Forget could have lodged a preliminary complaint about the validity of the condition imposed by the Municipality to hold an RBQ licence. Doing so would have given the Municipality the opportunity to amend its call for tenders before the opening of tenders. Transport Forget’s failure to do this rendered its claim for damages inadmissible. Commentary Tenderers for public calls for tenders issued by a municipality must be aware of section 938.1.2.2 of the Municipal Code of Québec4 and understand how to apply it in a timely manner. As demonstrated by the Superior Court’s interpretation of this section in the judgment in question, an unsuccessful tenderer that has not complied with the complaint process set out in said section and who intends to sue for damages for an alleged loss of profits could have their claim turned down on grounds of a fin de non-recevoir. Transport Martin Forget Inc. c. Municipalité de Saint-Alexis, 2024 QCCS 2208 We came across the decision in Sintra inc. c. Municipalité de Noyan, 2019 QCCS 4293 (CanLII), which also deals with this provision, but in the context of an application for an interim injunction from the lowest tenderer attempting to prevent the awarding of the contract to a third party: the Court dismissed the claim, in particular because the tenderer had not lodged a complaint about the process provided for the awarding of the contract, in accordance with section 938.1.2.2 of the Municipal Code of Québec, and concluded that the prima facie case requirement had not been met. Tapitec c. Ville de Blainville 2017 QCCA 317 We would also like to draw your attention to section 573.3.1.4 of the Cities and Towns Act, which is identical to section 938.1.2.2 of the Municipal Code of Québec. We have not found any decisions interpreting this section, so we urge tenderers to be cautious and comply with the complaint process applicable to calls for tenders issued by cities and towns, to avoid having their claim turned down on grounds of a fin de non-recevoir.

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  4. An insurer ordered to pay damages – The Court of Appeal intervenes

    On February 12, 2024, the Court of Appeal of Quebec handed down its decision in Société d’assurance Beneva inc. c. Bordeleau,1 dealing in particular with the burden of proof incumbent on an insurer when it denies coverage on the basis of an insured’s intentional fault, and an award of damages against an insurer for breach of its duty of good faith. The facts This decision was rendered further to a dispute between Société d’assurance Beneva inc. (hereinafter the “Insurer") and some of its insureds, including Mr. Michel Bordeleau, the owner of a multi-storey rental building that was damaged by fire. He lived in one of the units with his parents. According to the uncontested expert evidence presented, the fire originated in one of the storage spaces in the basement of the building, which was assigned to a lessee couple. Access to the basement and all storage spaces was locked. The cause of the fire was deemed to be intentional, given the traces of accelerant found in the area of the fire’s origin. The instigator or instigators were not identified. On November 21, 2016, 60 days after the fire, the Insurer denied coverage because of the intentional nature of the fire, which it attributed to its insured, Mr. Bordeleau. A few months later, on March 22, 2017, it reached an agreement with Mr. Bordeleau’s hypothecary creditor. The subrogation release provides for the Insurer’s payment of the balance of the hypothecary debt of $149,720.99, and subrogation to the creditor’s rights up to the amount paid. Mr. Bordeleau, in his belief that he had been harmed by the Insurer’s decision, instituted legal proceedings to recover the insurance benefit to which he claimed to be entitled, while also claiming damages. The Insurer filed a cross-application for recovery of the balance paid to the hypothecary creditor. The trial The trial judge, relying on the evidence, concluded that although the fire was intentional in nature, the Insurer had not discharged its burden of establishing the insured’s involvement in the fire. Taking this conclusion into account, she then proceeded to analyze the plaintiffs’ claim and to weigh the damages in light of the evidence and the limits of the insurance policy. In particular, she ruled in favour of Mr. Bordeleau’s claim for damages for the building, the amount of which was admitted. In addition, she ordered the Insurer to pay $15,000.00 in damages for nuisance and inconvenience caused by its conduct, which she considered faulty. This conclusion was based on the Insurer’s duty to act in good faith, to consider the facts and act on their basis, and to conduct a full investigation, duty which the Insurer had breached by failing to sufficiently follow-up on leads that could have identified who was responsible for the fire. In order to deny coverage, clear and compelling evidence of the insured’s involvement, going beyond mere suspicion, was necessary. Given the sometimes implausible and sometimes contradictory testimonies of the people met during the investigation, there was no such evidence. In other words, the claims adjuster had jumped to conclusions. In light of her conclusions, the trial judge dismissed the Insurer’s cross-application, which she deemed to be unfounded, without giving further reasons. The appeal The Court of Appeal first refrained from intervening in light of the Superior Court’s conclusions regarding the failure to demonstrate Mr. Bordeleau’s involvement in the fire. It did however intervene on the damages awarded for nuisance and inconvenience suffered by the insureds, and pointed out the following: [40] [translation] Firstly, apart from the strict mathematical calculation of the amounts payable, and perhaps other technical aspects not requiring the exercise of judgment, the processing of a claim is an obligation of means, not one of result. The fact that a court found at the end of a trial held many years after the incident that an insurer should have covered in the first place obviously does not mean that the insurer necessarily committed a fault other than its refusal to pay, making it civilly liable, let alone that it acted in bad faith. [41] In this case, there was nothing in the evidence to support a finding of fault or breach of the duty of good faith. [42] On the contrary, there is enough evidence to conclude that the investigation by the appellant and its experts, which led to the denial of coverage, was not botched. . . . In the opinion of the Court of Appeal, the evidence showed that the Insurer’s investigation had been done in a conscientious manner, in particular because it had transferred the claim file to a special investigative unit, mandated a fire origin and cause expert and external investigators, and interviewed many witnesses who could have provided information on the circumstances of the incident. Moreover, it had no allegations that the Insurer had failed to consider exculpatory evidence against its insured. In this context, although it took several years for the insured to obtain his due, with all the inconveniences of going through proceedings, the Insurer’s conduct could not be considered offending or revealing of bad faith. No damages could be awarded. Lastly, the Court of Appeal took a closer look at the question of the Insurer’s subrogation to the hypothecary creditor’s rights, which was little discussed in the judgment under appeal. Reiterating the fundamental principle in property and casualty insurance that the indemnification of an insured cannot result in enrichment, the Court of Appeal concluded that dismissing the Insurer’s cross-application would have such an effect. In addition to receiving an insurance benefit for the damages sustained, Mr. Bordeleau would also have had seen his hypothecary debt discharged. This would have given him a clear advantage. In this case, the benefit paid to the hypothecary creditor needed to be deducted from the damages claimed by the insured. The trial judge’s finding were thus revised accordingly. Conclusion Despite the clear principles addressed in this case, the Court of Appeal’s analysis points to practical difficulties that insureds and insurers can encounter when dealing with similar claims. It points to the coexistence of two factors that can be difficult to balance: First, the burden of proof where coverage is denied on the basis of the insured's intentional fault, and second, the insurer’s obligation of means in processing the associated claim. The dismissal of a coverage defence does not in itself warrant awarding damages. Société d’assurance Beneva inc. c. Bordeleau, 2024 QCCA 171

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  1. Five new members join Lavery’s ranks

    Lavery is delighted to welcome Julien Ducharme, Jessyca Duval, Anyssa Lacoste, Chloé Béland and Anne-Sophie Paquet.    Julien Ducharme – Senior Associate  Julien Ducharme joins our Business Law team on September 3.  His practice focuses primarily on mergers and acquisitions, corporate law, commercial law and corporate financing. In this role, Julien represents and assists small and medium-sized enterprises (SMEs), multinational corporations and institutional investors in connection with diversified commercial operations and large-scale business projects.  “With a team comprised of individuals as experienced in their respective fields as they are driven by human and professional values essential to creating a stimulating work environment conductive of surpassing oneself, my return to Lavery after several years abroad was a natural decision. I look forward to contributing concretely to the success of businesses operating in Quebec as their trusted business partner.”    Jessyca Duval – Senior Associate  Jessyca joins our Labour and Employment Law group and the Litigation group.    As part of her practice, she advises employers on all legal aspects relating to human resources management and matters relating to occupational injury, in addition to representing employers before various administrative tribunals and ordinary courts of law.  “I decided to join Lavery's team for their passionate and dedicated professionals, whose recognized skills and commitment make every collaboration not only rewarding, but genuinely enjoyable.”    Chloé Béland - Associate  Chloé is a member of the Labour and Employment Law group.   She advises employers on hiring and terminating employees, developing and implementing employment-related policies, psychological harassment, human rights, occupational health and safety, and labour standards.  “In my opinion, Lavery not only embodies innovation, expertise and excellence in the legal field, but is also a Quebec success story. Lavery deeply values team spirit and collaboration, which are essential values for delivering quality legal services and meeting high client expectations.  The diversity of labour and employment law cases was also a key factor in attracting me to Lavery. I’ll be able to continue growing my skills and developing creative solutions to complex challenges at Lavery, while taking a human-centred approach.  But what really convinced me to join Lavery were the passionate and inspiring lawyers I had the pleasure of meeting. Their warm, human approach resonates perfectly with my values. The friendly conversations I had reinforced my conviction that I’ll feel at home in this team.”    Anyssa Lacoste – Associate  Anyssa is a member of the Labour and Employment Law group.  She supports and represents her clients in a wide range of expertise, from drafting employment contracts to administrative recourses, implementing work policies and regulations and amending working conditions.  “I decided to join Lavery because of the firm’s reputation and expertise. Right from the start, I felt the firm had the values I was looking for in an employer. I am convinced that Lavery will contribute to my professional and personal development.”    Anne-Sophie Paquet - Associate  Anne-Sophie Paquet is a lawyer practising in the Business Law group and a member of the firm’s tax law team.   She advises and supports her clients in the planning, analysis and implementation of tax structures and strategies, in particular for business transactions.  “I chose to join Lavery because of the excellence of its team and because I was looking for a dynamic work environment that fostered collaboration. Joining the firm gives me the opportunity to support a diverse clientele in achieving their goals.” 

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  2. Lavery announces appointment of Paul Martel, a leading expert in corporate law

    Mr. Martel is recognized for his ability to provide pragmatic, innovative solutions to the most complex legal issues in corporate law. He was a law professor for over 25 years and has contributed to most major corporate law journals, including La Revue du Barreau du Québec. “I’m so pleased and excited to be starting the fifth chapter of my professional career at Lavery, a firm I hold in high esteem. I look forward to putting my expertise to good use with the firm’s clients, as well as helping to consolidate the multidisciplinary service offering for which Lavery is renowned in the legal and business markets,” said Paul Martel, partner at Lavery. As a leading expert in corporate law, and a respected teacher, lecturer and author, he regularly advises government authorities on major legislative changes, including those to the Civil Code of Québec, Quebec’s Companies Act, the Canada Business Corporations Act and the Act respecting the legal publicity of enterprises. He has also acted as a consultant to the Minister of Finance of Quebec in developing and drafting the new Business Corporations Act, and to the Agence du Revenu du Québec in updating the Quebec Enterprise Register. “Paul Martel has authored several landmark legal works on corporate law, and his outstanding track record and extensive expertise in the legal and business industries of Quebec, Canada and the United States will further strengthen the quality of Lavery’s services in this area of practice. He will certainly be a great inspiration to us all, and his presence at the firm will have a major impact on our teams, as he assists our Business Law group,” concluded René Branchaud, Head of practice of Lavery’s Business Law group.

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  3. The Court of Appeal recognizes Lavery’s leadership in matters involving surety bonds

    In a landmark decision, the Court confirms the scope of the surety bond indemnity agreement that our firm helped to draft in Gestion ITR inc. v. Intact Compagnie d'assurance.. Lavery’s reputation in construction bonding is well established. The firm has been a leader in this field for decades. Under the direction of our partner Nicolas Gagnon, Lavery supports the industry in contentious matters, while providing guidance on major policies. Over 30 years ago, our firm was in charge of drafting the content of an indemnity agreement between a construction company and a major surety company. That agreement is still widely used in the industry today. The Court of Appeal of Québec recognized the scope of the agreement in a recent decision, confirming that the obligations of the signatories to the agreement included, in particular, the reimbursement of losses incurred by the surety, not only under surety bonds it had issued, but also under agreements entered into between the principal surety and another surety that had agreed to act as the construction company’s guarantor. This essentially means that the signatories to an indemnity agreement must reimburse the losses incurred by a surety that was obtained by the principal surety. Our partner Nicolas Gagnon commented on this as follows: “So much effort went into drafting this indemnity agreement, given its significance for the industry. We’re obviously thrilled to see that Quebec’s highest Court agrees with our logic, and that it confirmed that the scope of the agreement we helped to draft applies to the situations we had identified.” We would like to take this opportunity to acknowledge our industry colleagues’ skillful work in defending the indemnity agreement.

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