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With the ongoing COVID-19 pandemic, governments and agencies are implementing an increasing number of measures of all kinds. The state of emergency is giving rise to a multitude of legal concerns, in particular contractual ones. The temporary closure of many businesses, public places and borders and the resulting economic uncertainty is leading businesses to question their contractual obligations, which may have become difficult to meet. In such a context, can debtors fail to meet their obligations without being held liable? The answer to this question can be found either in the text of the contract binding the parties or in the Civil Code of Québec (hereinafter “C.C.Q.”). Many contracts do in fact provide for exemption mechanisms. They set out which of the parties will bear the risks associated with events beyond their control. In the absence of contractual provisions to that effect, the rules set out in the C.C.Q. apply. The Civil Code of Québec and superior force Article 1693 C.C.Q. provides that the debtor of an obligation is released from said obligation when it cannot be performed by reason of superior force. However, the burden of proof of superior force is on the debtor. In Quebec law, superior force is defined as an unforeseeable and irresistible event that is external to the party subject to the obligation. It makes the performance of an obligation impossible1. Thus, in certain circumstances, natural phenomena, such as earthquakes, floods and others, or human acts, such as a state of emergency declared by a government, illness or death, may be considered superior force. Determining whether an event in a particular context constitutes superior force must be done by taking into account all relevant factors. For an event to qualify as superior force, it must meet the following three conditions or criteria. It must be: Unforeseeable Irresistible Exterior An event is unforeseeable when the parties to a contract, acting as reasonably prudent and diligent persons, could not foresee it at the time that the contract was concluded. There is no need for the event to be a new phenomenon. For example, ice storms in Quebec are not unusual. In 1998, however, the ice storm led to an unforeseeable situation. The magnitude of the 1998 ice storm was such that it was sometimes described as superior force. An event is irresistible when (i) any person placed in the same circumstances cannot reasonably avoid it and (ii) it makes the performance of an obligation impossible. Thus, if the performance of an obligation remains possible, but is simply more difficult, more perilous or more expensive, the event having caused the complication cannot be considered superior force. For an event to be considered exterior, the debtor must have no control over it and must not be responsible for causing it. The debtor must even be able to demonstrate that it has taken all reasonable steps to mitigate its consequences. On the basis of these criteria, the current state of emergency in Quebec may be deemed to be a situation of superior force for some debtors. The analysis must be made on a case-by-case basis and consider the specific obligations of each debtor. For example, the production stoppage ordered by the Government of Quebec, imposing the suspension of workplace activities other than priority activities as of March 25, 2020, makes it absolutely impossible for certain businesses to perform the obligations covered by this decree. For others, the state of emergency may have financial consequences, but these do not make their obligations impossible to perform. While the ongoing crisis can be considered an unforeseeable event for the purposes of a contract concluded years ago, this can hardly be the case for a contract concluded in the last few days, when the disease was already endemic or the pandemic had been announced by the health authorities. In the event of superior force, a debtor is released from the obligation(s) affected by the superior force2. Depending on the importance of these obligations, the release may, in certain cases, lead either to the termination of the contract in its entirety, or to the suspension of the performance of certain obligations. Thus, suspension should only occur when the obligations are to be performed successively and the impossibility of performance is only temporary. A debtor who is released from an obligation by reason of superior force may not demand consideration from the other contracting party3. Superior force cannot be used as a means of exemption for a debtor who is subject, under the terms of the contract, to an obligation qualified as an obligation “of warranty4”. The debtor must then perform the obligation and assume all risks related to the occurrence of an unforeseeable and irresistible event over which it has no control. A debtor faced with the current difficulties arising from the global COVID-19 pandemic must, in all cases, take steps to minimize the damage. For example, it must try to find new suppliers or subcontractors before claiming that it is unable to fulfil its obligations. Contracts may provide for different conditions Parties to a contract may include provisions in the contract governing the consequences of uncontrollable situations, such as superior force, and thus deviate from what is provided for in the C.C.Q. In practice, many contracts contain a broader or more restrictive definition of events that may constitute superior force. For example, strikes and fires will generally not be considered cases of superior force within the meaning of the C.C.Q., but may be under the terms of a contractual provision. Likewise, a party may, at the time that a contract is concluded, undertake to fulfil its obligations even if it is subject to a situation of superior force. In so doing, it waives the right to invoke such grounds for exemption in advance. The parties may also provide for steps to be taken in order to benefit from a contractual provision governing superior force, such as the sending of a notice within a stipulated time limit. The usual provision dealing with superior force requires the party invoking it to send a notice to the other party justifying its use of the provision. Failure to send such notice within the prescribed time limit may result in the affected party being barred from availing itself of the superior force provision. It is therefore particularly important for a party to pay close attention to the formalities and other requirements set out in the contract when invoking such a provision. A contract may additionally contain a provision that determines what effects the occurrence of an event considered as superior force will have. For example, the parties may agree that superior force will result in the termination, suspension or modification of an obligation, such as the proportional adjustment of a minimum volume to be delivered. Finally, the parties to a contract may set out the consequences of unforeseen and external situations that do not, strictly speaking, make the performance of an obligation impossible. For instance, the parties may anticipate the risk of an unexpected increase in the cost of an input by means of a hardship clause. A matter of sound foresight, such a clause may have significant consequences in the current situation, even if it does not specifically address superior force. Conclusion A superior force situation and the exercise of the rights that may result from it must be analyzed with the following in mind: A case-by-case analysis is required for each situation. Other legal concepts may apply depending on the circumstances, such as the duty of good faith of the parties to a contract, the duty to minimize damage, and the duty to demonstrate the absence of an alternative. Business risks or reputation risks may apply to both the party wishing to invoke superior force and the party against whom it is invoked. A review of the terms and conditions of the parties’ insurance policies, which may provide compensation for financial losses, may also be appropriate. Article 1470 C.C.Q. Article 1693 C.C.Q. Article 1694 C.C.Q. This is opposed to obligations qualified as “of result” or “of means,” for which the debtor may be released by reason of superior force.
The Code of Civil Procedure gives a party the ability to apply for the dismissal of an expert report as soon as it is disclosed by the adverse party. This process is governed by the courts. In the decision in Safran Nacelles v. Learjet inc.1, rendered in August 2019, the Superior Court granted an application to dismiss an expert report and excluded it even before the trial was held, after finding that its author did not have the requisite impartiality to enlighten the court. Facts In 2007, Bombardier Inc. (hereinafter “Bombardier”) retained the services of the plaintiffs, Safran Nacelles and Safran Landing Systems (hereinafter jointly referred to as “Safran”). Safran became a supplier of Bombardier in connection with the Learjet 85 program. In October 2015, Bombardier stated that it was forced to abandon its program, citing poor sales as the reason for doing so. However, Safran felt that the contracts, which were binding on the parties, had been terminated without cause and claimed damages. In 2018, in the context of the proceedings instituted by Safran, Bombardier filed an expert report in the court record which determined the reasons for the abandonment of the Learjet 85 program. In particular, the expert analyzed the market trends, reviewed Learjet sales, and compared them with the sales of competing products. However, the expert had been an employee of Bombardier since 2007 and was even the head of the market analysts team at Bombardier. Thus, his work had served as the basis for Bombardier’s decision to terminate the program. Decision Justice Thomas M. Davis, of the Superior Court, dismissed Bombardier’s expert report after stating the requirements of objectivity, impartiality and thoroughness associated with the expert’s work2. He also noted that the purpose of the expert’s report is to enable the trial judge to assess the technical, scientific or specialized aspects involved in the proceeding before him or her. The expertise should extend beyond matters within the knowledge and experience of the judge, without however taking the form of a legal opinion or pleading3. Where expert evidence does not meet these criteria, it can be rejected at the preliminary stage, but only in cases where the inadmissibility of the evidence is clear. While judge Davis acknowledged the great experience of Bombardier’s expert, he noted that this experience was acquired in the context of his job4. Furthermore, the judge also noted that the expert’s work was key to Bombardier’s decision to terminate the Learjet 85 program5. The expert was involved in the program, participated in presentations made to Bombardier’s suppliers, and would undoubtedly have to testify at trial as a witness to the facts. The judge concluded that he was [translation] "the main supplier of the information that enabled Bombardier's management to make its decision"6, making him an advocate for Bombardier’s position, and therefore biased. Noteworthy points of decision Since the current Code of Civil Procedure came into force on January 1, 2016, the debate on the admissibility of expert reports should normally take place prior to trial. Article 241 of the Code of Civil Procedure provides that a party may, at that stage, apply for the dismissal of the report on grounds of irregularity, substantial error or bias. However, whether an expert is biased is sometimes an issue that is difficult to resolve prior to trial. Both judges and lawyers have a tendency to leave this issue to the assessment of the judge on the merits and deal with it as a question of probative value. Therefore, there are few examples of situations, in the course of proceedings, that justify the dismissal of an expert report on grounds of bias. Judge Davis’s decision in the case of Safran Nacelles v. Learjet inc. is one of the most instructive. It is all the more interesting as it was rendered solely on the issue of bias, in the absence of any other form of irregularity in the report. For judge Davis, it was not the expert’s job with the defendant Bombardier that led to the dismissal of his report, but rather, the fact that his conclusions formed the very basis of the decision that was being attacked by Safran, i.e. the main issue in the debate between the parties. The judge’s reasons were consistent with two other decisions of the Superior Court in which the substantial involvement of the experts in the facts at issue justified the dismissal of their reports on grounds of bias7. The question of the admissibility of expert reports must be reviewed on a case by case basis. Our team can advise you on this issue and assist you in choosing an appropriate expert. 2019 QCCS 3269. Id., para. 23. Id., para. 25. Id., para. 28. Id., para. 29. Id., para. 30. Procureure générale du Québec c. L’Unique Assurances générales, 2018 QCCS 2511; Roy v. Québec (Procureure générale), 2016 QCCS 1829.
In a decision rendered on December 1, 2016, the Superior Court of Québec had to rule on a situation which, until that time, was completely novel, and to determine whether lawyers can act in a court action against former employees of a client whom they still have to work with in connection with another related proceeding. The Court declared that the lawyers were disqualified. The dispute The construction of a vast sports complex in Trois-Rivières, the Complexe sportif Alphonse-Desjardins (“CSA”), has been the source of a political and legal soap opera since 2010. The Commission scolaire du Chemin-du-Roy (the “School Board”) is one of the partners involved in this project, developed in phases since 1999. After the construction of the second phase, an Olympic arena, and the discovery of various problems related to the facilities’ operations, in 2011, the School Board instituted an action for more than $3 million against the project engineers and certain contractors and subcontractors. The services of the law firm, Morency, Société d’avocats, were retained to represent the School Board. In the course of the proceeding, two of the School Board’s employees, Michel Morin and Michel Montambeault, helped the lawyers with their preparation, were examined as representatives of the plaintiff, and attended the examinations of the adverse parties. In the following years, the School Board learned, contrary to what it had believed, that the various phases of the CSAD were resulting in financial losses. It believed that there were irregularities in the financial picture that was being presented to it. Moreover, the Auditor General of Québec provided its insight into these irregularities. In 2016, the School Board brought an action in damages against some of its consultants and former officers, including Messrs. Morin and Montambeault (who were no longer in its employ). The claim amounted to nearly $6 million. The lawyers from the firm of Morency were once again chosen to represent the School Board. It was in the context of this second action that Michel Morin and Michel Montambeault presented an application for a declaration of disqualification. Thus, the existence of an apparent conflict of interest was raised not by the lawyers’ client, but by former representatives of the client. Grounds The Superior Court acknowledged that there was a potential conflict of interest in this case which could result in the lawyers’ disqualification. In his reasons, Justice Daniel Dumais noted that the Québec legislator has codified, in article 193 of the new Code of Civil Procedure, the three most common situations that can give rise to a declaration of disqualification: where the lawyer has disclosed or is likely to disclose confidential information to another party or third person; the lawyer is called to testify in the proceeding on essential facts; or the lawyer is in a conflict of interest situation and does not take steps to remedy it. The judge quickly dismissed the hypothesis that the lawyers from the firm of Morency could be called to testify. Nothing of the sort had been considered in the case. Nor was the disclosure of confidential information an issue, since it was clear that the law firm’s client had always been the School Board. The confidential information which Messrs. Morin and Montambeault, as representatives of the School Board, may have disclosed to the lawyers in connection with the action in 2011, belonged to the School Board. There could be no declaration of disqualification on this ground. The Court therefore based itself on a conflict of interest in deciding to restrict the School Board’s right to counsel of its choosing. Justice Dumais wrote as follows: [Translation] The Court is of the view that there is the appearance of a conflict of interest here (…) based on the combination of the following three factors: 1) the important role given to the applicants in the two cases, 2) the simultaneousness of the two actions, and 3) the connection between them. The judge noted that “a relationship of trust was probably forged” between Messrs. Morin and Montambeault and the lawyers from the firm of Morency during the proceeding instituted in 2011. The lawyers got to know Messrs. Morin and Montambeault. They would likely call them to testify as witnesses in the upcoming trial. The situation [translation] “is far from reassuring”, wrote Justice Dumais, if they have to face another lawyer from the same firm a few weeks later in connection with the proceeding instituted in 2016. Since both actions dealt with the issue of financial management and the allegations made against Messrs. Morin and Montambeault in the 2016 case could affect their credibility as witnesses in the 2011 case, the Court found there was a connection. [translation] “The discomfort and apprehension (of Messrs. Morin and Montambeault) will probably be reduced if it is a new firm that is suing them,” the Court noted. In obiter, Justice Dumais added that even if he had concluded that there was no conflict of interest in this case, he would have declared that the lawyers from the firm of Morency were disqualified in the name of the higher interests of justice. What do we learn from this case? In matters involving a declaration of disqualification, each case must be considered individually. The free choice of counsel remains the principle. However, the Superior Court has indicated in this case that the scope of the search for conflicts of interest should be broadened. They can arise not only when lawyers have to act against clients or ex-clients, but also against their important representatives. And yet, in 2000, the Court of Appeal decided to permit a law firm to act against the former representative of one of its clients.1 Before dismissing the motion to disqualify, Justice Forget wrote as follows: [translation] “The effect of the respondents’ submission would be that every time a law firm communicates with an employee of its client, it would never be able to act again for that client in the event of a dispute between the client and that employee.” Justice Dumais of the Superior Court refused to reach the same conclusion given that the two files at issue in the case were connected, active and simultaneous, and that Messrs. Morin and Montambeault, as important representatives of the School Board, still had to work with the lawyers from the firm of Morency. It will be interesting to see whether the Québec Court of Appeal also makes such a distinction, since it has agreed to hear the School Board’s appeal. École Peter Hall inc. c. Fondation Eleanor Côté inc., 2000 CanLII 11376 (C.A.).