Publications

On September 18, 2019, the Minister Responsible for Government Administration and Chair of the Conseil du trésor introduced Bill 37, An Act mainly to establish the Centre d’acquisitions gouvernementales et Infrastructures technologiques Québec1 As its name suggests, this bill is intended to implement the restructuring of government procurement announced in the 2019–2020 budget2. If the bill is passed, the Centre de services partagés du Québec (CSPQ), as well as some other procurement organizations, will be replaced by two bodies: the Centre d’acquisitions gouvernementales will be the organization responsible for meeting the government’s general procurement needs, and Infrastructures technologiques Québec will handle its digital procurement. In 2017–2018, information technology contracts accounted for 17% of public body contracts3. Some administrative functions of the CSPQ would also be transferred to the Agence du revenu du Québec and the Conseil du trésor. Bill 37 also makes a number of amendments to the Act respecting contracting by public bodies, CQLR c. C-65.1, and its regulations, two of which are noteworthy. It is planned that, as of April 1, 2020, information relating to contracts involving an expenditure of more than $10,000, whether reached by mutual agreement or following a call for tenders, will have to be published in the electronic tendering system. The current limit is $25,0004. The bill also provides that, as of the date its assent (currently scheduled for the end of 2019), the imposition of a penalty for a final reassessment under the general anti-avoidance rule regarding an abusive tax avoidance transaction5 on the part of a company or related person will be recorded in the Register of Enterprises Ineligible for Public Contracts for five years. Such penalties will also be considered by the Autorité des marchés publics in its decision to authorize a contract with a public body. A 60-day transitional period is provided for in Bill 37, during which a taxpayer may make a late preventive disclosure to the Minister of Revenue6 by filing the form Mandatory or preventive disclosure of tax planning (TP-1079.DI-V). However, this type of disclosure will not be accepted if an audit by the Agence du revenu du Québec or the Canada Revenue Agency is already ongoing with respect to such a transaction. This measure is part of the current fight against aggressive tax planning7.   Quebec (National Assembly), Bill 37, An Act mainly to establish the Centre d’acquisitionsgouvernementales and Infrastructures technologiques Québec, 42nd Legislature, 1st Session. Quebec (Conseil du trésor), 2019–2020 Budget Plan (Quebec, Off. Publ., March 2019), p. H.61. Québec (Conseil du trésor), Statistiques sur les contrats des organismes publics 2017–2018 (Québec, Direction de la reddition de comptes et du soutien à l’encadrement des contrats publics, March 2019), p. 1. Sections 22 and 23 of the Act respecting contracting by public bodies, CQLR c. C-65.1; sections 39 and 39.2 of the Regulation respecting supply contracts of public bodies, CQLR c. C-65.1, r. 2; sections 52 and 52.2 of the Regulation respecting service contracts of public bodies, CQLR c. C-65.1, r. 4; sections 42 and 42.2 of the Regulation respecting construction contracts of public bodies, CQLR c. C-65.1, r. 5; sections 73 and 75 of the Regulation respecting contracting by public bodies in the field of information technologies, CQLR c. C-65.1, r. 5.1. Sections 1079.13.1 and 1079.13.2 of the Taxation Act, CQLR c. I-3. Section 1079.8.7.1 of the Taxation Act, CQLR c. I-3. See, in particular, Quebec (Conseil du trésor), 2019–2020 Budget Plan (Quebec, Off. Publ., March 2019), p. D.81.

Is an event organizer responsible for an artist’s late appearance? Context is key, answers the Superior Court’s, as it dismisses the application for authorization to institute a class action against Gestion Evenko Inc.1 regarding Travis Scott’s late appearance at the Osheaga Music and Arts Festival in the summer of 2018. Overview of the first class action on this topic in Quebec. Background The Osheaga Festival, organized by the defendant, Evenko, is a huge celebration dedicated to music and visual arts where artists of all genres perform for three days on the many outdoor stages set up in Parc Jean-Drapeau on Notre-Dame Island. Rapper Travis Scott was on the lineup for the evening of August 3, 2018. His performance was scheduled from 9:45 p.m. to 10:55 p.m. on the River stage. Wishing to attend this performance, the plaintiff, who had purchased a weekend pass, went to the venue at 8:45 p.m. Unfortunately, Travis Scott was held up at customs that evening. The sequence of events can be summarized as follows. At 9:55 p.m., Evenko displayed a first message on the site’s giant screens indicating that the show was delayed for a reason beyond its control. At 10:15 p.m., Evenko broadcast a second message, both on the giant screens and on Twitter, indicating that Travis Scott had been delayed at customs and was on his way to Notre-Dame Island. At 10:30 p.m., the plaintiff left the premises; she claimed that she did not believe Evenko's messages, feared a curfew and found the crowd aggressive. At 10:40 p.m., Evenko broadcast a third message on the giant screens confirming that Travis Scott had arrived on the island. At 10:55 p.m., Evenko broadcast a fourth message announcing to festival-goers that the show was about to begin. The show started at 11:00 p.m. and ended around 11:40 p.m. An application for authorization to institute a class action was filed the next day. The plaintiff sought to represent nearly 50,000 festival-goers who, in her opinion, suffered prejudice attributable to Evenko. She claimed that Travis Scott’s 90-minute delay constituted a breach of contract by Evenko such that all members of the group should obtain a refund equivalent to the value of a daily pass. The Decision In carrying out the analysis required by section 575 of the C.C.P., Justice André Prévost concluded that the alleged facts did not appear to justify the conclusions sought. The application for authorization to institute a class action was therefore dismissed. From the outset, the Court questioned some of the allegations in the application: for example, the plaintiff’s assertion that [translation] “Travis Scott’s performance was the main consideration in the contract with Evenko” seems incompatible with the fact that she purchased a three-day pass (paras. 51, 56); similarly, there was no evidence to support her claim that the crowd was aggressive (para. 54). However, it is mainly two deficiencies in the legal syllogism that led the Court to conclude that the application for authorization did not establish an arguable case or a reasonable prospect of success (para. 66). First, the Court refused to reduce the Osheaga Festival experience to a single performance, even that of a headliner. Rather, it described the event as [translation] “a comprehensive experience [...] whose interest lies in the multiplicity and simultaneity of cultural experiences” (para. 48). In fact, in addition to the invited musical, cultural and circus artists, there are various activities, fairs, cruises and awards ceremonies, to name but a few (para. 48). The Court pointed out that all documents relating to Osheaga’s programming and schedule contain one or more of the following warnings: “Schedule and lineup subject to change” or “Artists and schedule subject to change” (para. 47). These warnings are a strong indication that such delays are far from unusual or, in the words of the Court, [translation] “this is not exceptional for those acquainted with the cultural milieu” (para. 57). In this context, Evenko cannot be found to be at fault. The Court continued its analysis, adding that, even if it were found to be at fault, which is not the case, the situation did not result in any compensable damage: Citing Sofio2 and Mustapha3, the Court pointed out that mere annoyance is not prejudice, and that, in fact, [translation] “there is no evidence that Travis Scott’s delayed performance caused a more serious inconvenience than what is usual for people attending festivals of this nature” (para. 65). In short, in the context of a multi-genre festival, an artist appearing late does not necessarily constitute compensable prejudice and does not automatically amount to the promoter’s failure to fulfil its obligations. What It Means The decision is important to the entertainment industry in that it recognizes that major event organizers sometimes deal with unforeseen circumstances and they are allowed reasonable leeway to adapt to them. Of course, each situation will be particular, but a well-informed promoter will make sure to indicate that changes are possible in its documentation. The decision also recognizes that a comprehensive cultural experience is more than the sum of its parts: a single artist appearing late does not cast a pall on the entire event. This conclusion is likely to apply to many other industries: Osheaga is a typical example of a set of distinct and simultaneous performances, but the same characterization can be given to all the rides in an amusement park or all the individual sections of a zoological garden. Our partners, Myriam Brixi and Laurence Bich-Carrière have successfully represented Evenko's interests in this case.   Le Stum c. Gestion Evenko inc., 2019 QCCS 2422. The time limit for appeal expired on July 22, 2019. Sofio c. Organisme canadien de réglementation du commerce des valeurs mobilières (OCRCVM), 2015 QCCA 1820. Mustapha v. Culligan of Canada Ltd., [2008] 2 SCR 114, 2008 SCC 27.

Redefining and expanding the concept of conflict of interest, clarifying situations of “ineligibility to contract”, introducing a principle of supplier rotation, increasing the eligibility threshold for the award of a private contract. These are the main changes that the City of Montreal has made to what is from now on its by-law on contract management. Section 573.3.1.2 of the Cities and Towns Act, CQLR c. C-19, which requires all municipalities to adopt a contract management policy, entered into force on March 1, 2010.  There have been several versions of the City of Montreal’s policy, which was first adopted on December 16, 2010, including the most recent version adopted on August 25, 2016.1 On January 1, 2018, the Act mainly to recognize that municipalities are local governments and to increase their autonomy and powers, SQ 2017 c.13 (or “Bill 122”) transformed these contract management policies into by-laws.  The City of Montreal took this opportunity to revise its own policy, a new version of which was circulated to various City authorities beginning May 28, 2018 in order to be adopted on June 22 2018. The new by-law enters into force on June 26, 2018. Overview of the main changes Clarifications relating to scope: The policy’s central objective was to “sanction wrongful acts committed in the context of city contracts”,2 whatever these acts may be. The by-law is amended to clarify that it applies not only to contracts entered into by the City of Montreal, but also to subcontracts directly or indirectly connected to those contracts or to the related procedures (s. 3), a point on which the previous wording was ambiguous. The by-law also states that it is deemed to be an integral part of these contracts (s. 3, in fine). Codification of certain practices: As per s. 12, the City of Montreal is now obliged to preserve the personal notes and individual assessment prepared by each member of the selection committee, the composition, deliberations and recommendations of which remain confidential. As per s. 31, the City of Montreal must maintain a register of ineligible persons; this register is separate and distinct from the Register of enterprises ineligible for public contracts held by the secretariat of the Treasury Board in accordance with the Act respecting contracting by public bodies, CQLR c. C-65.01. Changes regarding ineligibility Obligation of all subcontractors to declare not only that they have no conflict of interest, but also that they are not in a situation that confers them an unfair advantage (s. 5), meaning a situation in which they would have had access to information related to a call for tenders which was not publicly available, for any reason whatsoever (s. 1(12)). For example, a subcontractor could be disqualified or have its contract terminated and be declared ineligible if the City of Montreal discovered that one of its former employees was associated in any way with the preparation of a call for tenders for the contract at issue. This new section also recognizes an arbitration award that stated that the twelve-month prohibition on hiring an individual who participated in the preparation of a call for tenders was too broadly worded and amounted to an “an unreasonable hindrance to the employability of scientists;”3 the proposed rewording (ss. 5-7) seeks to limit this prohibition to what is strictly necessary, i.e. situations where this participation confers an unfair advantage or creates a conflict of interest. Prohibition of persons listed in the City of Montreal’s register of ineligible persons from working on or from having an interest in a City of Montreal contract, without a specific authorization from the City (ss. 15-16, 28-30). For example, an architect listed in the register of ineligible persons could not be included on a team of professionals contracted by the City of Montreal, and could not finance this team. Clarification as to the cumulative nature of ineligibility periods for repeat offenders (s. 32) Offenders who, during their first two years of ineligibility, commit another offence which would be punishable by five years of ineligibility, become ineligible for six years from the date of the second offence.  Relaxation and tightening of certain rules related to awarding contracts and contract management Increase of the eligibility threshold: the City of Montreal can enter into a private contract if it involves an expenditure that is less than the expenditure threshold for a contract that can be awarded only after a call for public tenders in accordance with section 573 of the Cities and Towns Act, CQLR c. C-19 (s. 33). Fixed by ministerial decree, this threshold is currently set at $101,100. Rotation principle: regarding these private contracts, the City of Montreal may not enter into two similar contracts with the same supplier within 90 days of each other (s. 34). Introduction of rules specific to managing variations in the planned quantity of items for unit price contracts (ss. 1(14), 18) and the use of contingencies in budgeting; these contingencies are from now on specifically defined as “any modification of a contract that is accessory to that contract and that does not change its nature” (ss. 1(4), 19-20, translation). Several of the proposed changes recognize the recommendations resulting from arbitration awards or created by the Office of the Inspector General of Montreal.4 All of these changes are part of the City of Montreal's desire to reinforce the principles of healthy competition, transparency, and fairness that govern public markets in Quebec.   City of Montreal, Politique de gestion contractuelle (version finale), telle qu’adoptée par le conseil municipal, à sa séance du 23 août 2016, et par le conseil d’agglomération, à son assemblée du 25 août 2016, [“Contract management policy (final version), as adopted by the City Council in its session on August 23, 2016, and by the agglomeration council at its meeting of August 25, 2016”], online. See the Decision summary for case no. 1184990002 for decision-making documents sent to elected officials in anticipation of the agglomeration council’s regular meeting on May 31, 2018, online, p. 13/35. Le syndicat professionnel des scientifiques à pratique exclusive de Montréal c. Montréal (Ville), 2016 CanLII 68692 (Mr. André Sylvestre) [translation]. See the Decision summary for case no. 1184990002 for decision-making documents sent to elected officials in anticipation of the agglomeration council’s regular meeting on May 31, 2018, online.

Anyone who wants to bring an action in damages relating to the secondary securities market must prove that the action is brought in good faith and has a reasonable chance of success (s. 225.4 QSA). In Quebec,1 as elsewhere in Canada,2 no prior disclosure of evidence may be obtained by plaintiff for the purpose of meeting this burden. The procedure prescribed by the QSA is complete and sufficient, so recourse to the rules Code of Civil Procedure is unwarranted. Where such an action is brought by way of class action, the court must furthermore be convinced that the criteria for authorizing a class action are also met. The Court of Appeal does not expressly rule on whether prior disclosure is available to the investor  to sustain the proposed class action. These specific rules have no impact on the general rules regarding insurance, such as a plaintiff's direct right of action against the insurer of the person who caused the damage (art. 2501 CCQ). Regardless of the subject matter (the secondary market) or the procedural vehicle (class action), a court may order a defendant to disclose such documents which are necessary for a meaningful exercise of this right, such as insurance policies. In its recent decision in Amaya Inc. v. Derome, 2018 QCCA 120, the Court of Appeal ruled on the interaction between the Securities Act, CQLR, c.V-1.1 (QSA) and the rules specific to class actions in relation to applications by investors for prior disclosure of documents by a public issuer. We summarize here a much-anticipated decision. The Specific Framework of the QSA The QSA governs actions relating to financial markets. Although such actions may be introduced on an individual basis, class actions are regarded as the preferred vehicle, “given that publicly-traded issuers generally have many investors in like circumstances and, if something goes wrong, they are likely to come together to avail themselves of the advantages of a class action.”3 Class actions are merely one of the available vehicles, and it is in no way a requirement to use this type of proceeding. With respect to actions relating to the secondary market, section 225.4 QSA requires that any investor, whether acting personally or as representative of a proposed group, be authorized by the court before bringing the proposed action. This restriction was enacted –and similarly so across Canada–4 to preserve public confidence in stock markets,5 but also to protect public issuers against opportunistic actions brought in hopes of obtaining a settlement rather than to obtain compensation for actual damage.6 Accordingly, an investor who claims to have been defrauded will have to prove to the court from which authorization is requested that the proposed action is “in good faith and there is a reasonable possibility that it will be resolved in favour of the plaintiff” (s. 225.4 para. 3 QSA). Motions for authorization should be addressed as early as possible, so that judicial resources are allocated only to meritorious cases. Interaction With Class Actions If the action takes the form of a class action, the investor must also meet the criteria for authorization of a class action (art. 575 CCP), a burden which has been established to be a light one, since it simply involves proving that “the facts alleged appear to justify the conclusions sought” (art. 575(3) CCP).7 Not only do the QSA and the CCP impose different burdens, but the authorization they require arises at different moments in the course of the proceedings o: the authorization required by section 225.4 QSA must, necessarily, precede the authorization required by article 575 CCP. As the Court of Appeal points out: “This is eminently logical: where leave is required under the Act, there is no action upon which the class action, as a procedural vehicle, can rest until that leave is granted.”8 Of course, both issues can be disposed of in one judgment.9 With these distinctions made, it is clear that any application brought for the purpose of enabling an investor to meet the burden established by section 225.4 QSA must be analyzed pursuant to the rules set out in that provision and not the rules that generally apply to class actions.10 The judgment appealed from was therefore not a “pre-authorization class action judgment”; it was a “judgment prior to leave under the [QSA]”.11 Accordingly, it had to be reviewed in accordance with the requirements and the spirit of the QSA.12 The Judgment Under Appeal The trial judge had granted an application for documentary disclosure, relying on the parties’ general duty to cooperate set forth by article 20 of the CCP.13 He thus arrived at a solution that is unique in the Canadian legal landscape.14 Though rendered during a case management conference, the judgment under appeal  went significantly beyond the confines of case management. Accordingly, the application for leave should follow the rules applicable to judgments rendered in the course of proceedings, set out in article 31 para. 2 CCP.15 The trial judge's decision has addressed a point of law regarding to discovery, which impacted “the character of the proceedings themselves,” and which, if decided wrongly could cause irreparable harm to defendant, regardless of the expenses involved.16 Leave was granted and the Court of Appeal had to consider, on the merits, whether the trial judge was correct in applying the general principles of Quebec civil procedure to the applications for documentary disclosure that were before him. For the Code of Civil Procedure to “compensate[e] for the silence of the other laws if the context so admits,” as provided by its preliminary provision, such a silence must exist. In the opinion of the Court of Appeal, considering the purpose and history of section 225.4 QSA – in particular its goal of screening out opportunistic actions as soon as possible17 – and the uniformity of legislation on this subject in Canada,18 no such silence can be found to exist. On the contrary: in order to avoid short-circuiting the requirement for prior authorization and avoid fishing expeditions and mini-trials, judges who are responsible for authorizing actions of this nature must require that applicants meet their burden themselves.19 Neither the combination of articles 20 and 221 CCP or the specific context of class actions can sidestep that prohibition.20 Insofar as it was sought to allow the investor to meet the burden imposed by section 225.4 QSA, the application for documentary disclosure should have been dismissed. By contrast, the application to obtain disclosure of the insurance policies did not fall within the specific context of section 225.4 SA, and the trial judge's order was left undisturbed, Given the principle of cooperation (art. 20 CCP), but most importantly the long-settled principle that a third party seeking to exercise their right of action against the insurer of the person who caused the damage they suffered (art. 2501 CCQ) such applications can be justified in that they allow potential parties to the case to be identified.21 The Court of Appeal’s decision does not directly address whether class counsel may succeed in a request for “relevant evidence to be submitted” within the meaning of article 574 para. 3 CCP; such requests are traditionally considered to be properly made to contest  the application, that is, necessarily by defendant,  given that the allegations in the application for authorization to institute a class action must be assumed to be true at that stage.22 Summary Section 225.4 QSA is the expression, in Quebec law, of an intent common to all Canadian legislatures to create a screening mechanism for actions relating to the secondary market, in order to preserve investor confidence and deter frivolous suits. Accordingly, where an applicant seeks prior disclosure in order to meet the criterion for authorization set out in section 225.4 QSA, his or her application should be dismissed, including in a class action context. Where the objective of the application for prior disclosure is not one germane to the QSA, for instance, where an applicant seeks information to join an insurer to the proceedings, such application needs to be considered under the ordinary rules of Quebec law.   Theratechnologies Inc. v. 121851 Canada inc., [2015] 2 SCR 106, 2015 SCC 18 Canadian Imperial Bank of Commerce v. Green, [2015] 3 SCR 801, 2015 SCC 60 Par. 52 Par. 97 Par. 84 Paras. 49 and 84; following, inter alia, Theratechnologies Inc. v. 121851 Canada inc., [2015] 2 SCR 106, 2015 SCC 18 or Canadian Imperial Bank of Commerce v. Green, [2015] 3 SCR 801, 2015 SCC 60 Para. 50 Para. 46. Paras. 20, 46 and 54 Para. 45 Paras. 42, 45 and 55 Para. 55 Derome v. Amaya inc., 2017 QCCS 44, paras. 79 et seq. Para. 36; compare: Mask v. Silvercorp Metals Inc., 2016 ONCA 641 and Mask v. Silvercorp Metals Inc., 2014 ONSC 4161 – leave to appeal ref’d: Mask v. Silvercorp Metals, Inc., 2014 ONSC 464 (Ont. Div. Ct); Bayens v. Kinross Gold Corp., 2013 ONSC 6864; Silver v. Imax, (2009) 66 B.L.R. (4th) 222, leave to appeal ref'd, Silver v. Imax,2011 ONSC 1035 (Ont. Div. Ct) Paras. 73 to 79 Paras. 66 et seq.; leave to appeal had been referred to a panel of the Court: Amaya inc. v. Derome, 2017 QCCA 335. Paras. 49 and 84 Paras. 9 and 97 Paras. 9 and 93 Paras. 106 and 107 Collège d'enseignement général et professionnel de Jonquière (CÉGEP) v. Champagne, 1996 CanLII 4413 (CA) Benizri v. Canada Post Corporation, 2016 QCCS 454, para. 6

Year in and year out, the Superior Court of Quebec releases around 175 judgments in class actions matters, and 2017 was no exception. With two years having passed since the reform of civil procedure, the courts have had an opportunity to clarify the effect of a number of new provisions: the low threshold for authorization,1 the limited nature of a defendant's right of appeal a decision authorizing a class action,2 confirmation that certain interlocutory judgments at the authorization stage can only be appealed with leave,3 and the obligation of diligence of the first-to-file applicant4–to name just a few. Decisions on the merits have also raised questions as to the application of the absolute presumption of prejudice in consumer protection law.5 We have also seen developments in decisions relating to the enforcement of transactions, particularly in relation to the rights of the Class Action Assistance Fund to the remaining balance.6 What, then, will 2018 hold? The following is an overview of decisions to watch for this year. 1. Securities: Class Actions and Prior Disclosure On January 10, 2017, in an application under section 225.4 of the Securities Act, CQLR c. V-1.1, the Superior Court ordered defendant Amaya to disclose certain information to petitioner Derome further to an application under article 574 CCP. While the third paragraph of that article provides that the judge may allow “relevant evidence to be presented”, its first paragraph states that the application for authorization must be contested orally; accordingly, it was generally believed that a request to present relevant evidence could be made only by the defence; this was buttressed by the fact that the truth of the allegations in the application for authorization are to be assumed at that stage.7 These  arguments failed to persuade the Superior Court, which gave preference to considerations relating to the general exploratory purpose of pre-trial examinations and the obligation of cooperation that is one of the guiding principles of the new Code of Civil Procedure.8 The motion for leave to appeal was referred to the panel of the Court.9 The hearing was held on August 29, 2017, a decision can be expected in the near future. 2. Bank Fees: Class Actions and Legal Fees When may a judge deny an application to approve a transaction that has been negotiated between counsel for the class members and the defendants in a class action? In the opinion of Justice Claudine Roy, then of the Superior Court, a judge must do so when [TRANSLATION] “the result of the transactions is of very little value for the members, [even if] the defendants have succeeded in causing the plaintiff to lose interest.”10 On January 23, 2017, she refused to homologate three transactions,11 on the basis that they offered no real advantage to the members, and rather benefited class counsel, certain defendants, and certain not-for-profit organizations. She called on the courts to be vigilant in ensuring that class actions did not become [TRANSLATION] “a source of enrichment for class member counsel and a source of funding for not-for-profit organizations” and suggested that in that case, a discontinuance was more in keeping with the rules of fairness and the objective of class actions.12 A few days later, her then colleague, Justice Denis Jacques, adopted her comments and also refused to homologate a transaction in a related case.13 On March 31, 2017, Justice Marie Saint-Pierre of the Court of Appeal confirmed that the refusal by a judge of the Superior Court to authorize a transaction could be appealed, but only with leave: unlike a judgment homologating a transaction, a judgment refusing to do so does not terminate the proceedings, and, accordingly, following the ordinary rule pertaining to interlocutory judgements, it may be appealed only with leave.14 Leave was however granted in both cases. The appeal was heard on September 1, 2017, and decision was taken under advisement. A decision should be released in early 2018 that will provide guidelines for a judge exercising the power to review transactions. 3. Motor Vehicles: Class Actions and Interpretation of a Settlement The automotive world was astounded on September 18, 2015, when it was revealed that Volkswagen had installed surreptitious software in some of its diesel-powered vehicles to falsify the results of environmental compliance tests done by government agencies. Numerous class actions were instituted, including, in Canada, one in Quebec and another in Ontario. After lengthy talks, the parties reached a comprehensive agreement regarding certain categories of vehicle, which agreement was endorsed by the Superior Courts of Quebec15 and Ontario.16 The agreement included a provision that some owners would be eligible for a refund in the event that certain “fixes” were not available by June 15, 2017. On June 15, 2017, the fixes had received all of the necessary regulatory approvals, but had not yet been put on the market, and a dispute ensued as to whether the refund was available. Motions for interpretation of the settlement were filed in both jurisdictions. In Quebec, the Court concluded that the “availability” contemplated in the settlement agreement had to be understood to mean availability of the fix itself and that approval by the authorities before the deadline was not sufficient to defeat the obligation to refund. The Court noted that a transaction of this scope is necessarily a delicate compromise, the terms and deadlines for which were deliberately chosen over the course of numerous talks,17 and also pointed out that the opposite interpretation assumed that the agreement did not contain an implementation date and would leave performance to the whim of the defendants,18 which seemed hardly compatible with the spirit of a settlement. However, its Ontario counterpart came to precisely the reverse conclusion: the refund is dependent on the availability of the fixes, so that without them, the refund clause cannot apply. This said even if the agreement does not mention a specific deadline for performance, defendants are required to implement it diligently, having regard to the good faith performance obligation clause.19 The Quebec Court of Appeal is to hear the appeal on February 2, 2018,20 and the Ontario Court of Appeal will do so shortly thereafter. 4. Investments: Class Actions and Plans of Arrangement On November 30, 2015, the Superior Court authorized a class action instituted against certain entities in the Desjardins Group relating to risky investments, including some in connection with asset-based commercial paper21 (“ABCP”). The ABCPs had already been the subject of a plan of arrangement filed with and approved by the Ontario Superior Court of Justice under the Companies’ Creditors Arrangements Act, RSC 1985, c. C-36 and an injunction. The defendants therefore applied to the Superior Court to strike out the conclusions in the class action proceedings relating to the ABCPs. The Court ruled that the motion was premature and that further evidence would be required before it could conclude the allegations were aimed at matters fully covered by the plan of arrangement..22 Since the matter involved a question of jurisdiction – what is more, a novel one –, the Court of Appeal agreed to consider the matter,23 and it is to be heard on February 9, 2018. 5. Noise Pollution: Class Actions and Constitutional Law Factory discharges, highway dust, and noise pollution: the number of class actions based on neighbourhood disturbances continues to rise in the wake of the decision in St. Lawrence Ciment.24 Two such cases should be watched this year, since they involve not only the principle of the free enjoyment of a person’s property, guaranteed by the Civil Code and the Quebec Charter, but also the broad rules governing the division of constitutional powers between the federal and provincial governments. Because aviation falls within the exclusive jurisdiction of Parliament, companies operating in that field are considered to be more or less immune to provincial legislation interfering with the conduct of their business. It remains to be determined whether interjurisdictional immunity, as the doctrine is known, is sufficient to defeat a class action alleging excessive noise pollution. Interjurisdictional immunities were argued at the November 20-21, 2017 authorization hearing in the action instituted by Les Pollués de Montréal-Trudeau against the operator of the Trudeau airport. Justice Chantal Tremblay may acceded to the submission –and deny the authorization– or refer the issue for determination on the merit, if she is of the view, for instance, that the evidence is currently insufficient for a decision. However, the argument should find a definitive answer by the end of the year, since a five-week trial is to begin in February in the action instituted by the Coalition contre le bruit against the operators of the airfield at Lac-à-la-Tortue in Mauricie. Lavery was retained in this matter after  the judgment granting authorization.25 6. Retail Commerce: Class Actions and Consumer Law Between 2007 and 2011, Leon’s Furniture advertised to customers that they could [TRANSLATION] “pay nothing for 15 months”. Some of the purchase financing programs, however, involved paying annual administrative fees. On July 31, 2017, the Superior Court found Leon’s liable and ordered the company to pay almost two million dollars to consumers,26 stating in passing that assessing the quantum of compensatory damages a discretionary exercise. While the decision relies on the Supreme Court's decision in Time, specificallythe passages dealing with the irrebuttable presumption of prejudice resulting from a violation of the Consumer Protection Act, CQLR, c. P-40.1 [CPA]27, it seems to run counter to a decision of the Court of Appeal rendered barely two months earlier,28 which many took to hold that, even in the class action context, it is up to a consumer who wishes to obtain compensatory damages to prove the alleged prejudice and that it was caused by the merchant’s violation of the CPA. Although the Superior Court’s decision squarely serves the remedial and protective objectives of the CPA, it raises a number of questions regarding the applicability of the general rules of civil law to consumer protection cases, especially  as they relate to awards of compensatory damages. We commented on those decisions earlier here. The appeal is expected to be heard at the end of 2018.   Asselin v. Desjardins Cabinet de services financiers inc., 2017 QCCA 1673; Ameublements Tanguay inc. v. Cantin, 2017 QCCA 1330 (leave to appeal requested); Pfizer inc. v. Sifneos, 2017 QCCA 1050. Groupe Jean Coutu (PJC) inc. v. Sopropharm, 2017 QCCA 1883; Trottier v. Canadian Malartic Mine, 2017 QCCA 119. Groupe Jean Coutu (PJC) inc. v. Sopropharm, 2017 QCCA 1883. Cohen v. Option Consommateurs, 2017 QCCA 94 and Badamshin v. Option Consommateurs, 2017 QCCA 95 (leave to appeal to the Supreme Court denied: SCC No. 37521 (July 16, 2017). Vidéotron v. Union des consommateurs, 2017 QCCA 738; Option Consommateurs v. Meubles Léon ltée, 2017 QCCS 3526. Handicap-Vie-Dignité v. Résidence St-Charles-Borromée, CHSLD Centre-ville de Montréal, 2017 QCCS 935 (costs of publication and remaining balance); Halfon v. Moose International Inc., 2017 QCCS 4300 (right to remaining balance where payment is in nature). Derome v. Amaya inc., 2017 QCCS 44. Derome v. Amaya inc., 2017 QCCS 44, paras. 41-53. Amaya inc. v. Derome, 2017 QCCA 335. Option Consommateurs v. Banque Amex du Canada, 2017 QCCS 200, para. 65. Option Consommateurs v. Banque Amex du Canada, 2017 QCCS 200. Option Consommateurs v. Banque Amex du Canada, 2017 QCCS 200, para. 110. Option Consommateurs v. Banque Canadienne Impériale de Commerce, 2017 QCCS 275. Option Consommateurs v. Banque Amex du Canada, 2017 QCCA 502. Option Consommateurs v. Volkswagen Group Canada Inc., 2017 QCCS 1411. Quenneville v. Volkswagen, 2017 ONSC 2448. Option Consommateurs v. Volkswagen Group Canada Inc., 2017 QCCS 2870, par. 22. Option Consommateurs v. Volkswagen Group Canada Inc., 2017 QCCS 2870, par. 39. Quenneville v. Volkswagen, 2017 ONSC 4583. Authorization granted: Volkswagen Group Canada Inc. v. Option Consommateurs, 2017 QCCA 1361. Dupuis v. Desjardins Sécurité financière, compagnie d'assurance-vie, 2015 QCCS 5828. Dupuis v. Desjardins Sécurité financière, compagnie d’assurance-vie, 2016 QCCS 6348. Desjardins Sécurité financière, compagnie d'assurance-vie v. Dupuis, 2017 QCCA 802. St. Lawrence Cement Inc. v. Barrette, [2008] 3 SCR 392, 2008 SCC 64. Authorization granted: Coalition contre le bruit v. Shawinigan (Ville de), 2012 QCCS 4142. Option Consommateurs v. Meubles Léon ltée, 2017 QCCS 3526. Richard v. Time Inc., [2012] 1 RCS 265, 2012 CSC 8, par. 123. Vidéotron v. Union des consommateurs, 2017 QCCA 738.

On August 10, 2016, the Québec Court of Appeal authorized a class action pertaining to international roaming fees, thus reiterating, with renewed respect for the opposing view, that meeting the authorization threshold and the criteria respecting the representative’s interest is fairly easy under Quebec law.1 The proposed class action After having incurred “disagreeably surprising”2 roaming fees during a trip to the US, Inga Sibiga, a Quebec consumer who has a wireless telephone contract with Fido (a subsidiary of Rogers), seeks the authorization to institute a class action against Bell, Fido, Rogers and Telus, the four major wireless service providers in Canada. In essence, she claims that the international roaming fees charged by those companies to Quebec consumers are abusive, lesionary and so disproportionately high as to amount to exploitation, contrary to section 8 of the Consumer Protection Act3 and article 1437 of the Civil Code of Québec. Ms Sibiga asks for the reduction of the obligation of subscribers and punitive damages. International data roaming allows a consumer to use a mobile phone out of the area served by his or her provider, the latter resorting to another provider’s network, at a set tariff. Since all defendants offer national coverage, roaming charges only become an issue in respect of data transmission abroad. The decision under appeal On July 2, 2014, the honourable Michel Yergeau of the Superior Court of Québec dismisses the motion for authorization with costs. The Superior Court essentially finds that Ms Sibiga does not appear to have satisfied the requirement of the then-applicable article 1003(b) CCP as the facts alleged in her motion are not sufficient to justify the conclusions sought. Justice Yergeau notes that the motion contains no allegation or document establishing the framework of the contractual obligations assumed by the petitioner and by her service provider.4 Specifically, he scolds the petitioner for having failed to produce a copy of her contract with Fido, a contract which he characterizes as an “essential tangible fact”.5In view of this rather poor evidence, it appears to the Court that the allegations as to the exploitative nature of the roaming fees are mere speculations and not facts sufficient to justify authorizing a class action. Expressing an oft-heard concern, the Superior Court insists that it is not its role “to embark on the equivalent of a public inquiry” as called for by the motion.6As liberal as Infineon suggests the screening mechanism at the authorization stage should be,7“[o]ne does not launch court proceedings as expensive for the judicial system as a class action on such a tenuous base.”8 Adding to this decided conclusion, the Superior Court further expresses the view that Ms Sibiga is not in a position to adequately represent the members of the class, as required by article 1003(d) CCP. This is in part because she does not have the required standing within the meaning of article 55 CCP, at least against Telus and Bell since she is bound by contract only with Fido (and thus Rogers). This is also because, having only a minimal understanding of the class action process and no control whatsoever over the proceedings, she appears to be no more than a pawn of her attorneys.9 Without blaming Ms Sibiga or her lawyers, the Superior Court insists on the independence of the “representative” in a class action. Ms Sibiga’s appeal would be allowed, the honourable Nicholas Kasirer writing for the Court of Appeal. The “social dimension” of class actions, emphasized by the most recent Supreme Court decisions, is the rock against which the Superior Court’s decision is quashed.10 Appeal Although concurring with the concerns expressed by the Superior Court that “a lax approach to the standard can result in authorization of class actions that do not deserve to go to trial”,11the Court of Appeal is of the view that it erred: “while a judge can refuse a motion for authorization that relies on an overly liberal interpretation of the Infineon standard, it is a mistake in law to refuse authorization by treating that standard as overly liberal in itself.”12 In the Court of Appeal’s opinion, “by denying authorization […] based on what he described as an imprecise and speculative claim, the motion judge neglected to apply the prima facie case standard relevant to this consumer class action”13 and thus failed to see the threshold for authorization was met. The unbearable lightness of the authorization filter “The action should be allowed to proceed if the applicant has an arguable case,”14 “the court’s role is merely to filter out frivolous motions”15: article 1003 CCP sets a low threshold, despite proposals for a more interrogative approach. Indeed, a scintilla of credibility suffices at this stage: it is at the trial on the merits that allegations should be substantiated, supported by the evidence. The motion judge, says the Court of Appeal, should not have asked for more. In other respects, perhaps paradoxically, the Court of Appeal finds that it was “imprudent and indeed mistaken”16 for the Superior Court to engage with the motion and its supporting evidence on the merits, as the authorization calls for a consideration of the surface of the evidence.17 What is more, the Court of Appeal is less convinced than the Superior Court that it is necessary that Ms Sibiga’s contract be filed in the court record. Since the existence of a contractual relation is not disputed, the Court of Appeal considers that, at the authorization stage, the filing of the monthly statements from the service provider and some publicly available information documents should be considered sufficient.18 The representative is neither a puppet nor a spearhead As to the petitioner’s representative capacity, in line with the Marcotte19 decision of the Supreme Court (which was unavailable to the Superior Court for it was under advisement the time), the Court of Appeal concludes that the absence of a direct cause of action (here, in contract) with two of the proposed defendants should not constitute an insurmountable obstacle to a class action.20 The issue of the role and capacity of the petitioner to work with –rather than for– her attorneys proves a more delicate one: although excesses have been known to occur, entrepreneurial lawyering is not itself a bar to finding that the designated representative has the requisite interest in the suit.21 The genuineness of a motion is not wholly discredited merely because the proceedings bear the lawyer’s scent.22 Here too, the Court of Appeal finds that the Superior Court failed to apply the liberal standard warranted by the Supreme Court. The class description: the burden of proof belongs to the brave Building on a comment of the Superior Court to the effect that, absent any detail concerning many of the countries where roaming costs could allegedly have been incurred or the variety of the mobile plans involved, the proposed class was unduly inclusive, defendants Bell and Telus had asked that, should the appeal be allowed, the class be restricted.23 The Court of Appeal declines to make such a ruling. As tempting as it might be to bring the proposed class to more common proportions, doing so would amount to prejudging the ability of the applicant to conduct her case.24 Again, at the authorization stage, it suffices to establish an arguable case, and this burden was met by petitioner.25 In any event, class definition can be reviewed by the court at the trial on common issues.26 Conclusion The decision of the Québec Court of Appeal falls in line with the most recent decisions of the Supreme Court of Canada relating to class actions. The decision is not one for jurisprudential controversy; it rather serves to show how emphatically the highest court in the land has diluted the threshold for authorization in Quebec.27 Authorization is, of course, not a mere formality, a call for rubber-stamping, but it is not fatal for the evidence presented at this preliminary stage to be incomplete or imprecise. The criteria for authorization have been substantively untouched by Québec’s civil procedure reform, there is every reason to believe that there is a bright future for this liberal approach. Sibiga c. Fido Solutions inc., 2016 QCCA 1299 [CA], inf. Sibiga c. Fido Solutions inc., 2014 QCCS 3235 [SC]. CA, at para. 18. Consumer Protection Act, CQLR c P-40.1. SC, at para. 113. SC, at para. 109 [our translation]. CA, at para. 131; SC, at para. 121. SC, at para. 147, reference made to Infineon Technologies AG v. Option consommateurs, [2013] 3 SCR 600, 2013 SCC 59. SC, 98 [our translation]. SC, at paras. 148-155. CA, at para. 51, reference made to Bisaillon v. Concordia University, [2006] 1 SCR 666, 2006 SCC 19, at para. 19. CA, at para. 14. CA, at para. 15. CA, at para. 15. Infineon Technologies AG v. Option consommateurs, [2013] 3 SCR 600, 2013 SCC 59, at para. 65. Ibid., at para. 61. CA, at para. 96. CA, at paras. 69-96. CA, at paras. 56-68. Bank of Montreal v. Marcotte, [2014] 2 SCR 725, 2014 SCC 55. CA, at paras. 39, 98, 115. CA, at paras. 102-103. CA, at para. 104. CS, at para. 122. CA, at paras. 140-141. CA, at paras. 137-138. CA, at para. 150. See e.g., Infineon Technologies AG v. Option consommateurs, [2013] 3 SCR 600, 2013 SCC 59; Vivendi Canada Inc. v. Dell’Aniello, [2014] 1 SCR 3, 2014 SCC 1; Bank of Montreal v. Marcotte, [2014] 2 SCR 725, 2014 SCC 55; Theratechnologies Inc. v. 121851 Canada Inc., [2015] 2 SCR 106, 2015 SCC 18.

Effective September 18, 2016, anyone wishing to obtain a general contractor licence will be required to first provide security of at least $40,000. The amount will be $20,000 for specialized contractors. Effective January 21, 2017, the Regulation to amend the Regulation respecting the professional qualification of contractors and owner-builders also amends the description of the work authorized for some contractors specialized in heating, ventilation and refrigeration. On July 20, 2016, following a lengthy review period, particularly before the Régie du bâtiment du Québec (Board), the government passed a regulation to amend the Regulation respecting the professional qualification of contractors and owner-builders.1 The amendments mainly deal with two matters. Firstly, as indicated at the outset, the amount of the security required to be provided by contractors under law2 will be doubled, effective September 18, 2016.3The increase aims to reflect that of the value of contracts since such obligation was introduced. However, the purpose and mechanics of the security remain the same: it aims to compensate clients who sustain a loss following non-performance or performance of construction work if the loss results directly from instalments paid, failure to carry out construction work or faulty work or defects discovered in the year following completion of the work. The security does not cover the claims of persons who took part in the construction work, damages resulting from delays in construction work, damages for moral injury or punitive damages.4 In addition, the client who suffered a loss must obtain a judgment before making a claim before the Board. However, the exemption for contractor dealing in new residential buildings covered by a guaranty plan, Class I or II remains.5 The increase of the security threshold is only effective for the provision of a new security or upon renewal of a licence: a contractor who currently holds a licence is required to provide the new amount of security only from the expiry date of the payment of the fees and charges payable to maintain the contractor’s licence.6 The new security will then replace the former security without it being necessary to give the notice otherwise required by law.7 Secondly, the amending regulation makes some adjustments to the description of the work which holders of some licence subclasses, regarding heating, ventilation and refrigeration work. Many of those adjustments concern language: “warm air” and “hot water and steam” systems will be referred to respectively as “pulsed air” and “hydronic” systems. As to substance, two amendments, scheduled to come into force on January 21, 20178 must be noted. One is that contractors who specialize in natural gas burners will also be allowed to perform work on propane burners. This amendment, which concerns subclasses 15.2 and 15.4 of Schedule II, reflects the harmonization of applicable standards within the industry. Also, a contractor who perform works on systems which allows both heating and air-conditioning, whether on a pulsed air or hydronic system, must henceforth hold the necessary competences for both systems. This amendment concerns subclasses 15.1, 15.1.1, 15.4, 15.4.1, 15.7, 15.8, 15.9 and 15.10 of Schedule II. In case of doubt as to the determination of the relevant subclass, the client relations department of the Régie du bâtiment du Québec should be consulted. Lavery has the necessary knowledge and experience to assist you in your dealings with the Board. Do not hesitate to contact us. Order in council 703-2016 dated July 6, 2016, GOQ.II.2968, rectified by GOQ.II.4711 [the Order in council] adopting the draft Regulation to amend the Regulation respecting the professional qualification of contractors and owner-builders, GOQ.II.2359 dated July 22, 2015 amending the Regulation respecting the professional qualification of contractors and owner-builders, CQLR c B-1.1, r 9 [the Regulation]. Building Act, CQLR c. B-1.1, section 84. Order in council, sections 1 and 11(1). Regulation, section 25. Regulation, section 26. Order in council, section 11(2). Order in council, section 10. Order in council, section 11 para. 1.

The regulation governing contracts of public bodies leaps into the digital age. The amendments, passed on April 13, 2016, and coming into force June 1, 2016, aim to clarify the rules pertaining to the results evaluation.1 Five key changes Tenders in electronic form are mandatory if so required in the tender documents —> change of computer systems will be needed to ensure the integrity of the signatures and tenders. Minor modifications to the conditions for compliance —> still not possible for the public body to specify what constitutes a minor irregularity in the tender documents. Qualitative evaluation of tenders —> it is possible to ask for the details of the evaluation in case of refusal. For supply contracts, the concept of “total acquisition cost” is introduced —> to determine the lowest price or the adjusted price, the public body may take into consideration the additional costs related to the useful life of the goods which are not included in the tenders. Adoption of a new regulation respecting information technology contracts2 —> these contracts are removed from the ordinary framework of supply and services contracts Electronic transmission of tenders Public bodies may henceforth require tenderers to transmit their tenders only through the electronic tendering system approved by the government (ETS).3 Failing to do so will then constitute a ground for automatic rejection, as well as the fact that the electronic tender “is unintelligible, infected or otherwise illegible once its integrity has been established by the electronic tendering system.”4 Moreover, only tenders whose integrity has been ascertained,5 meaning that it is possible to verify that the information which the document contains has not been altered, that the medium used provides stability and perennity to the information and that the security measures necessary to its preservation exist6may be accepted. If it is not possible to ascertain the integrity of a document at the opening of tenders, the public body must not disclose the prices, but rather send a default notice to the tenderer in question, who will then have two business days to remedy the situation, failing which the tender will be rejected.7 If integrity can be ascertained, the public body shall publish the result of the opening in the ETS within four business days.8. The public body may of course continue to accept the filing of paper tenders, exclusively or in addition to electronic tenders. In this last case, effective from May 31, 2019, in the event that a same tender is both sent electronically and on paper form, it will be deemed to constitute two separate tenders for the purpose of compliance analysis.9 Prior to May 31, 2019, it may be considered that the paper form version prevails. Evaluation of the tenders Conditions for compliance If, effective from June 1, 2016, the erasure of or correction to the tendered price which is not initialled will no longer constitute a ground for automatic rejection, grounds such as a conditional or restrictive tender, a security which does not comply with the form and conditions required, lateness in submitting a tender and non-compliance with a condition stipulated to be essential remain.10 In this respect, the regulation is more timid than the draft regulation published on November 11, 2015, which, for example, would have given the public body the authority to establish which conditions could be the subject of a correction by tenderers in the event of an irregularity. This proposed faculty was finally not retained. Results of the evaluation Regarding contracts to be awarded following a quality evaluation, whereas the public body was previously required to inform each tenderer only of the overall results of the evaluation. From June 1st, 2016, they will also be required, upon the written request to the tenderer sent within 30 days of the quality evaluation results, provide the tenderer with the results in respect of each criterion used, as well as briefly set out the reasons justifying the fact that a tender was not accepted, if such was the case. The public body is required to provide its response to the tenderer within 30 days from the date it received the tenderer’s request.11 Changes specific to supply contracts Supply contracts are the subject of particular amendments, the most important of which apply to the adjustments to be made to the tender price to determine the lowest price. The concept of “impact cost”12 disappears, to be replaced with that of “total acquisition cost,” which allows the public body to take into account the “additional costs related to the acquisition of the goods”. These costs must be identified in the tender documents. They represent quantifiable and measurable elements non included in the tendered price, the cost of which will be borne by the public body during the useful life of the goods acquired. They may include installation, maintenance, support and training costs.13 Their value must be communicated to tenderers within 15 days of the contract awarding.14 The amendments to the regulation also specify the procedure applicable for calls for tenders in two stages15 as well as the procedure pertaining to compliance tests: the public body must first test the goods proposed by successful tenderer according to the terms provided for in the call for tenders and can only resort to the other tenderers if the goods proposed by the successful tenderer fail to pass the compliance test.16 New regulation applicable to contracting in the field of information technologies In addition to the above amendments, a new regulatory framework is adopted in respect of information technologies contracts which, effective June 1, 2016, will cease to be covered by the ordinary regime regulating services and supply contracts. We simply note that if the structure of the Regulation respecting contracting by public bodies in the field of information technologies, O.C. 295 2016 generally retains that of the current regulations, it also innovates, the government seeking to reflect certain issues specific to the “acquisition of goods or the provision of services in the field of information technologies […] [which] seek[s] predominantly to ensure or enable functions of information processing and communication by electronic means, including the collection, transmission, display and storage of information”. The new regulation provides specific rules pertaining to intellectual property or cloud computing and the possibility to use a new method for awarding contracts, “competitive dialogue”. Conclusion These regulatory amendments reflect the government’s wish to make electronic tenders the norm in the medium term. They also reflect some teachings of the courts, particularly as to the importance of precise tender documentation. Lastly, particularly with respect to supply, they aim to give more flexibility to the public body in order to ensure the best possible value to the taxpayer. O.C. 292-2016, 293-2016, 294-2016 and 295-2016 dated April 13, 2016, GOQ.II.1803-1826 (April 13, 2016), respectively amending the Regulation respecting supply contracts of public bodies, CQLR c. C-65.1, r. 2 (Rrscpb), the Regulation respecting service contracts of public bodies, CQLR c. C-65.1, r. 4 (Rscpb) and the Regulation respecting construction contracts of public bodies, CQLR c. C-65.1, r. 5 (Rccpb), all three adopted under the Act Respecting Contracting By Public Bodies, CQLR c. C-65.1. Regulation respecting contracting by public bodies in the field of information technologies, O.C. 295 2016. Sec. 4(5.2.), 9.2 Rccpb, Rscpb, Rrscpb; an exception applies to supply contracts referred to in section 183 of the Act respecting health services and social services, CQLR, c. S 4.2 where the documents related to the tendered price are in the form of a price list whose scope or layout does not make it possible to identify a total price (sec. 46.2 Rrscpb). Sec. 7 para 1 (5) Rccpb, sec. 7 para 1 (4) Rscpb, sec. 7 para 1 (4) Rrscpb. Sec. 13.1 Rccpb, sec. 10.1 Rscpb, sec. 10.1 Rrscpb. An Act to Establish a Legal Framework for Information Technology, CQLR c. C-1.1, sec. 6. Sec. 7.0.1 para 1 Rccpb, Rscpb, Rrscpb. Sec. 14 para 4 Rccpb, sec. 11 para 4 Rscpb, sec. 11 para 4 Rrscpb. Sec. 7 para 3 Rccpb, Rscpb, Rrscpb. Sec. 7 para 1 Rccpb, Rscpb, Rrscpb. Sec. 32 para 5 Rccpb, sec. 28 para 4 Rscpb, sec. 26.3 para 3. Sec. 13 al. 2 Rrscpb (2008-2016). Sec. 15.1.1 and 15.1.2. Rrscpb. Sec. 15.1.2 Rrscpb. Sec. 26.1-26.3 Rrscpb. Sec. 7 para 1(5), 12 para 2 Rrscpb.

On November 14, 2015, the Supreme Court of Canada rendered three decisions on the application of the the Bankruptcy and Insolvency Act, RSC 1985, c. B-3 (BIA) and its interaction with certain provincial statutes. OVERVIEW OF THE FACTS In Saskatchewan (Attorney General) v. Lemare Lake Logging Ltd. Ltd., 2015 SCC 53 (Lemare), the Court, sitting as a bench of seven judges, considered the conflict between a provincial statute, which imposes a 150-day notice period before instituting any action relating to farm land, and the BIA, which permits a secured creditor to apply for the appointment of a receiver for the property of a debtor upon the expiry of a 10-day notice period under section 244 BIA. In Alberta (Attorney General) v. Moloney, , 2015 SCC 51 (Moloney), and 407 ETR Concession Co. v. Canada (Superintendent of Bankruptcy), 2015 SCC 52 (ETR), the nine judges considered the conflict between a provincial statute which allowed for the revocation or suspension of the motor vehicle permits or driver’s licences of persons who failed to pay certain driving-related debts, even where these drivers were discharged bankrupts and the debt targeted by the provincial statute was a provable claim in bankruptcy. APPLICABLE RULES In these three cases, the Court had to determine whether the BIA and the provincial statutes could coexist or whether they were in conflict, in which case the provincial statutes had to be declared inoperative and give way to the BIA, which would take precedence pursuant to the principle of the paramountcy of federal law over provincial law. The Supreme Court noted that when reviewing the interaction between different laws of different jurisdictions, the courts must be careful, in that they should favour an interpretation seeking to reconcile the two laws in question, and only declare the provincial law inoperative where the inconsistency with the federal law is inescapable. In this regard, a conflict may be operational, i.e. where one law prohibits what the other imposes, or in the purpose, where the effects of one frustrate the purposes of the other. Since a conflict could arise both with respect the effects or the purposes, to resolve the alleged conflicts at bar, the Court had to assess the rationale behind the BIA and the provincial laws in question, as well as their respective mechanisms. APPLICATION In Lemare, the review was limited to the purposes which underlie the existence of the 150-day notice period in favour of the debtor/ owner of farm land under the provincial statute, which protects farms and farming operations, and to the purposes of the 10-day notice period provided in section 244 BIA before the appointment of a receiver can be required under section 243 BIA. For the majority of the Court, the time period in the provincial statute constitutes a grace period, whereas the purpose of the 10-day notice period in section 244 BIA is to avoid the multiplication of proceedings. The BIA does not require the appointment of a receiver upon the expiry of the 10 days. Moreover, this time period can be extended or abridged, depending on the circumstances. The creditor’s right to obtain the appointment of a receiver is in all cases subject to court authorization. According to the majority of the Court, there is therefore no inconsistency between the two regimes: in complying with the 150-day time period under the provincial statute, one is by the same token also only exercising one’s option to apply to the courts beyond the 10-day time period under the BIA. Justice Côté dissented: for her, timeliness and effectiveness were also purposes of the BIA and the objective of protecting farm land must therefore yield to this imperative. She would have declared the provincial law inoperative. In Moloney and ETR, the Court considered the purposes of the BIA as a whole. In this regard, the Court was unanimous: on the one hand, the bankruptcy and insolvency regime lays down the principle of the equitable distribution of the bankrupt’s assets among his creditors and, on the other hand, the principle of the financial rehabilitation of the bankrupt, which is achieved through his discharge from all provable claims at the end of the process. The Court also unequivocally found that there was a conflict between the fact that the bankrupt could be discharged of his debts under the BIA and the fact that a provincial statute could continue to attach sanctions to one of these debts. However, the seven majority judges diverged from their two dissenting colleagues on how this conflict was to be characterized. For the majority, there was a true operational conflict between the BIA and the provincial statutes because the BIA neutralizes the debt while the provincial statutes continued to give some effect to the debt. Since one statute prohibited what the other required, the inconsistency was direct. According to Justices McLachlin and Côté, there was no operational conflict between the BIA and the provincial statutes because it was still possible for a bankrupt to renounce the privilege which the provincial statute sought to deprive him of by giving up his driver’s licence or willingly paying his debt. However, since the provincial statutes frustrated the purpose of the BIA, they were inoperative in the insolvency context. EFFECTS AND LESSONS In Moloney and ETR, the Supreme Court reaffirmed known concepts (bankrupt’s discharge and rehabilitation), and these decisions therefore do not revolutionize insolvency practice. However, the Court’s decision in Lemare could potentially change practice by making the appointment of a receiver under section 243 BIA subject to the time periods provided in provincial statutes. For instance, in Quebec, one can easily imagine that debtors might attempt to convince the courts that a receiver cannot be appointed under the BIA until the time limits provided for in the Civil Code of Québec for the exercise of a hypothecary recourse have expired (20 days for movable property and 60 days for immovable property). Lavery has the knowledge and experience necessary to assist you in any bankruptcy and insolvency matters and protect your assets and property. Do not hesitate to contact us.

To allow for adequate planning, the Quebec government phased in the coming into force of certain regulatory amendments on building safety that were adopted in the past few years. These new standards were previously discussed in bulletin Nos. 6 and 9, issued in April 2013 and June 2014 respectively, of our Lavery Real Estate and Construction series. This newsletter serves as a brief reminder of the most imminent deadlines.  ASBESTOS: JUNE 6 IS FAST APPROACHING Our newsletter No. 9, published in June 2014, summarized the new standards for safe asbestos management that came into force on June 6, 2013, most of which appeared in division IX.1, entitled “Provisions on the Safe Management of Asbestos”, of the Regulation respecting occupational health and safety, CQLR, c. S-2.1, s. 223.1 This regulation was adopted from the perspective of occupational health and safety and imposes both an obligation to identify (and reduce) risks and an obligation to inform workers. Identification of existing risks The regulation provides that the employer must: (1) locate flocking in all buildings constructed before February 15, 1999, and heat insulating material in all buildings constructed before May 20, 1999, to find the asbestos they contain — by June 6, 2015; (2) thereafter, conduct inspections of such flocking and heat insulating material every two years; (3) at all times, make the necessary corrections to the flocking, heat insulating material or interior finishes whose condition has deteriorated or which pose a risk; (4) record this information in a register. Identification of high-risk workBeginning June 6, 2015, all buildings covered by the regulation will have a register. These registers should be consulted by any person wishing to do work on the building, regardless of the scope of such work. Indeed, as soon as work is being considered that could lead to asbestos dust emissions, the employer is required to check for the presence of asbestos in any materials and products likely to contain it and, where it is found, to: (1) take the appropriate corrective or mitigation measures; (2) inform the person planning the work of any risks; (3) inform the workers likely to be exposed to asbestos dust and, moreover, inform them of the risks, prevention methods and specific safe working methods for the work to be done; these workers also have the right to consult the registers. Responsibility for these obligations The regulation states that the employer’s responsibility to inspect relates to “any building under the employer’s authority”. The key issue of who has authority over a building will necessarily vary depending on the nature of the building or the operations conducted therein. Thus, the employer-owner-occupant will undoubtedly generally hold the “authority” over the building, but a single tenant, real estate manager or tenant under an emphyteutic lease could also do so. There is, however, no similar limitation on the obligation to take corrective measures, which seems to be imposed on the employer’s authority even where the building is not under its control. It is therefore even more important to consult the registers under these circumstances. Remember also that the Act respecting occupational health and safety, CQLR, c. S-2.1, extends the employer’s obligations to any person who retains the services of a worker for the purposes of the employer’s establishment. As for the potential role of the Commission de la santé et de la sécurité du travail with respect to asbestos exposure of workers, we refer you to the newsletter Need to know prepared by our colleagues in the Labour and Employment sector. In any event, prudence dictates that the various persons who may be exercising some form of control over the building should agree on the efficient sharing of responsibilities. FACADES AND PARKING: WHEN WILL YOUR (NEXT) INSPECTION BE? As we indicated in our newsletter No. 6 of April 2013, pursuant to chapter VIII entitled “Buildings”, which was added to the Safety Code on March 18, 2013 by the Regulation to improve building safety,2 any facade of a public building with five or more storeys, and any underground or aboveground multistorey garage with a concrete slab whose driveable portion is not laid directly on the ground, must henceforth be the subject of an in-depth verification report every five years attesting that it is not in a dangerous condition (or indicating the corrective measures that must be taken3). Inspection of facades The deadlines for completing the first in-depth verification, which is to be signed by an engineer or architect, are being phased in based on the age of construction. Some deadlines have already passed and others are approaching — see the regulation for details. In all cases, the age of construction of the building is calculated in reference to March 18, 2013, the date the regulation came into effect. Verification of multistorey garages For multistorey garages built less than five years after the coming into force of the regulation, an in-depth verification report, supervised by an engineer, was required to be done by March 18, 2014. Owners of older multistorey garages have a longer time period, until March 18, 2016, to obtain such a report. The regulation also requires every owner of a multistorey garage to conduct an annual verification, the first of which was to be completed in the first year following the adoption of the regulation, that is, by March 18, 2014. The wording of the regulation seems to imply that a serious visual inspection conducted by the owner himself is sufficient. We refer you to our bulletin No. 6 of April 2013 for more details. Keeping a register Here again, it is compulsory to maintain a register for keeping the verification reports and maintenance plans on file, but also the construction plans, photographs or description of the work done or to be done. Similar measures also exist for water cooling towers. We refer you to our bulletin No. 6 of April 2013 for more details. SANCTIONS AND CONSEQUENCES The Régie du bâtiment du Québec can impose similar sanctions for keeping an inadequate register as for the breach of the positive duties of verification or implementation of preventive measures. We refer you to our bulletin No. 6 of April 2013 for an overview of the severe fines which offenders could face, as well as the consequences of these changes for contracts dealing with real estate, whether they relate to leasing, management, co-ownership, insurance or financing. CONCLUSION Finally, in closing, it should be borne in mind that while the purpose of the regulatory amendments passed by the government in the past few years is to enhance safety requirements in building construction and maintenance, they only set minimum standards. Indeed, every municipality is free to adopt more stringent standards. _________________________________________ 1 Regulation to amend the Regulation respecting occupational health and safety and the Safety Code for the construction industry, order in council 476-2013 of May 8, 2013, (2013) 145:21 GOQ.II, 1999. 2 Regulation to improve building safety, order in council 1263-2012 (December 19, 2012), (2012) 145:3 GOQ.II, 179. 3 See our newsletter No. 6 of April 2013 on this point.

On January 1, 2015, the jurisdictional threshold of the Small Claims Court will be raised from $7,000 to $15,000. This constitutes a first step toward the modernization of civil procedure, explained the Minister of Justice, which will be followed by the coming into force of the new Code of Civil Procedure in January 2016. On February 28, 2014, the National Assembly passed Bill no. 28, An Act to establish the new Code of Civil Procedure, the product of 15 years of reflection on the reform of civil procedure in Quebec. With a view to increasing access to justice, this bill, amongst other measures, would significantly raise the jurisdictional threshold of the Small Claims Division of the Court of Québec. Indeed, the coming into force of the new Code, set for January 2016, was to bring the cap from $7,000 to $15,000. The increase was accelerated however by the recent adoption of Bill no. 14 1 by which the National Assembly amends the current Code of Civil Procedure to raise the jurisdictional threshold at the Small Claims Division on January 1, 2015. According to Stéphanie Vallée, Minister of Justice, [TRANSLATION] “[t]he increase will provide Quebeckers with better access to this tribunal where citizens represent themselves, without a lawyer.” Lavery is of the view that this legislative amendment may have a significant short-term impact on the business community as regards the management of these litigation files where representation by a lawyer is generally prohibited. The change has no retroactive effect on matters currently pending nor on their execution. Lavery will keep you apprised on a regular basis on the evolution of this civil procedure reform. _________________________________________ 1An Act to amend the Code of Civil Procedure and other provisions, SQ 2014 c 10.