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  • How to Negotiate Temporary Agreements or Contracts in Times of Crisis?

    The rapid spread of COVID-19 and the introduction of strict government measures are limiting or changing many businesses’ operations. These measures impose unusual restrictions that make it more difficult to meet certain contractual obligations. In such a situation, many companies will want to assess the possibility of modifying certain undertakings and terms of their contracts in order to get through the pandemic and resume their business activities post-crisis. To that end, we have gathered a few thoughts on how to look into negotiating a temporary agreement, some legal principles that can be applied to begin discussions and negotiations, and some other elements to consider in a negotiation approach, which we share with you below. How to do it and where to begin: some ideas It is relevant to review all your contracts and sort them to determine which are essential for your business operations and which have the most significant financial impact.  Think about the other contracting party as well, who may also be affected by the pandemic. Has the other party defaulted of performing its correlative obligations to you, or is your inability to meet your obligations causing it prejudice in any way?  Most of the obligations included in a contract cannot be changed unilaterally. However, contracting parties must still perform their respective obligations in good faith. The occurrence of an exceptional situation such as COVID-19 is likely to force each of the parties to act more flexibly in order to comply with their duty of good faith. It is possible to validate whether some of these contracts, by their very nature, are still relevant or whether they will remain relevant once the curve flattens and economic activity recovers. For less relevant contracts, you can check whether they include provisions allowing for unilateral termination, by the mutual agreement of the parties or by a particular mechanism. Otherwise, you could then consider initiating a discussion with the other contracting party to negotiate certain terms of the agreement in order to mitigate negative impacts, if any, during the pandemic.  For each contract that must be maintained, you can list all the obligations that you are unlikely to be able to meet, in whole or in part, as well as those that your contracting party might not be able to meet, in order to open the door to an out-of-court  negotiation of certain provisions for the coming months. In your analysis, you should pay particular attention to the following clauses: Default: What constitutes a default under the terms of the contract? What are the consequences of defaulting? Does a default under this contract constitute a default under another contract? Does the contract provide for a time period to cure a default? On what conditions? Time limit: Does the contract set specific time limits for the performance of certain obligations? Which ones? Does the contract provide for the possibility of postponing the time limit for its performance? Should a notice be sent to this effect? Does it expire soon? Exclusivity: Is the contract exclusive? Can this exclusivity be overridden? Under what circumstances and on what conditions? Force majeure: Does the contract include a superior force clause (most commonly called a “force majeure”) forgiving a party’s inability to perform its obligations? What happens to each party’s obligations, especially financial obligations, in a context of superior force? Although the Civil Code of Québec defines such a notion, the contract can always provide its own definition. A case of superior force usually requires the presence of an unforeseeable, irresistible event external to the party invoking it. Continuous information: Does the contract provide for the obligation to keep the other contracting party informed when certain events occur? If so, which ones? Is COVID-19 or any other pandemic included? Negotiation: Does the contract provides for the parties the possibility to renegotiate certain terms ? Which ones? When? On what conditions? Payment: Does the contract set out time limits for payments to the other contracting party or for making any other kind of payment, depending on the nature of the contract? Does it provide for additional time limits to proceed to the payments? What is the impact of delaying or not making a payment? Financial performance: Does the contract establish financial performance criteria (e.g. compliance with certain financial ratios)? How often? What are the consequences of not meeting these financial criteria? Penalties: Does the contract contain penalties for late payment of certain amounts or for failure to meet certain contractual obligations? When is this penalty due? What amount can it reach? Liability: Is the liability of the contracting parties unlimited under the terms of the contract or does the contract instead provide for limits on the amount that may be claimed?(maximum/minimum amount)? Is there a predetermined time limit to make a claim? Does the contract provide for a notice to be sent to this effect? Dispute resolution: Does the contract provide for a dispute resolution process? Mediation or arbitration? Under which conditions can these mechanisms be applied? List all the impacts that result from a breach of obligations (e.g., penalties, notice of default, interest), and make a list of viable proposals that you can submit to the other contracting party as an alternative. What legal principles can you use to negotiate a temporary agreement with your contracting party or a postponement of your obligations?  Certain provisions or legal principles may make it possible to terminate a contract or may serve as arguments for a temporary agreement or a postponement of your obligations. Here are a few examples. (This list is non-exhaustive, of course.) Force majeure Some parties to a contract will want to invoke the concept of superior force to terminate or temporarily suspend the effects of the contract. Although this concept is interesting, it applies only to very specific situations and its application is not generalized. As previously mentioned, the Civil Code of Québec1 provides that superior force is an unforeseeable and irresistible event that must not arise from the actions of the contracting parties. Depending on the nature of the obligations covered, a contracting party may be released from its obligations or have its successive obligations suspended during the superior force period. The contract may also provide for other parameters and circumscribe the terms of what may constitute a case of superior force between the parties. The right to invoke superior force requires a case-by-case assessment of each contract and of the relationship between the parties. In any event, a party that is unable to perform its obligations, in whole or in part, must take all steps at its disposal to minimize its damage. You will find more information on the concept of superior force and its application in the bulletin The Impact of COVID-19 on Contracts.  Right to terminate Certain contractual provisions may allow for resiliation (termination) by either party, on specific terms or for specific reasons. Some contracts will provide for a termination mechanism at either party’s discretion or further to their mutual consent.  In the absence of such clauses in the contract, it remains essential to characterize the nature of the contract, since legislative provisions could allow its resiliation. That is also the case of a contract of enterprise or a contract for services, which the client may unilaterally resiliate as permitted by sections 2125 and following of the Civil Code of Québec, subject to certain limits, of course. Before deciding to unilaterally resiliate a contract, it is important to consult your legal advisor in order to properly determine the nature of the contract, validate its terms and conditions with respect to resiliation and determine the possible impacts of such resiliation (e.g., penalties, prejudice to the other party, etc.). Obligation of good faith in contractual performance The obligation of good faith imposes certain contractual duties, including those of loyalty and cooperation. The duty of loyalty entails certain prohibitions such as not increasing the burden on a contracting party, not compromising the contractual relationship, and not engaging in excessive and unreasonable2 behaviour. The duty of cooperation, on the other hand, is more positive in nature and aims for assistance and collaboration between the contracting parties to encourage contract performance. Thus, beyond the contractual relationship between the parties, the obligation of good faith allows for a genuine collaborative relationship, a partnership, even, between the parties. A party being a victim of its contracting party’s actions, which are not in accordance with its obligation of good faith under the terms of the contract or which are implicitly derived from those terms, may be in a favourable position to claim damages. Thus, if a party experiences difficulties in performing its obligations because of an event beyond its control, it is entitled to expect the other contracting party to show good faith in the performance of the contract and to act reasonably. Abuse of rights  A party’s exercise of its contractual rights may, in certain situations, constitute an abuse of rights. For example, a party that is in default of its payment obligations under the contract, due to the closure of its business as required by government authorities, may trigger the application of a contract default clause by the other party. Such other partycould proceed with the immediate resiliation of the contract upon simply providing notice. While the terms of the contract may be clear, the other party’s haste in resiliating the contract may constitute an abuse of rights. Indeed, the nature of the relationship between the parties, the duration of the business relationship and the facts that led to the default have an impact on the way a party may exercise its rights under the contract. The exercise of rights provided for in the contract in such a way as to create devastating or catastrophic effects for one of the contracting parties could constitute an abuse of rights in the performance of the contract. Mediation The contract may provide for dispute resolution processes such as mediation or arbitration. To the extent that a dispute arises between the contracting parties and that the contract provides for recourse to alternative dispute resolution mechanisms, it will be possible or even mandatory to submit the dispute to a process such as mediation before a third party, which will attempt to help the parties find an acceptable common ground. In the event of non-performance by a contractual party, this may be a very good option, insofar as the contract contains a provision providing for recourse to such mechanisms, of course. How can a temporary agreement be negotiated, and are there elements that can be put forward as part of the discussions? Given the exceptional current situation, it may also be appropriate for the contractual parties to communicate and verify the impacts of the pandemic on the contractual performance. In this way, the parties may jointly conclude that there are particular difficulties in performing certain obligations under the contract. In such a case, propose solutions or present scenarios that aim to minimize the negative impacts for your respective businesses. Rely on the mutual aid factor to meet certain obligations and/or suspend others (performance, manufacture, delivery, time limits, forbearance, etc.). It is possible to suggest performing certain obligations in consideration for the performance of your contracting partner’s correlative obligations. Where feasible, consider partial payments, deferred payments, staggered payments over time or a reimbursement based on a percentage of revenues or sales once operations resume after the pandemic. If it is possible, offer additional guarantees to the other contracting party (e.g. collateral security, personal suretyship, third party guarantee). Validate whether your insurance covers the cessation of your operations, business interruption, delays in the performance of your obligations, or financial losses arising from some of your contracts, to enable you to propose viable alternatives.  Determine which suppliers or partners are willing to conclude a temporary arrangement and those who refuse or are less open to it. You can then to try to optimize your agreements with the more conciliatory partners, allowing you to continue performing certain obligations with your more reluctant contracting parties. Innovate! Think about alternatives that might not have been possible, or that you might not have considered before the pandemic, that allow you to optimize your business practices or relationships. In short, think outside the box. A few thoughts before undertaking a negotiation  Do not restrict your thinking to the period of restriction on non-essential activities which is, at the time of writing, until May 4, 2020.  Think instead about the weeks and months that will be required to re-establish your business relationships and resume normal business operations, while performing your ongoing obligations and any deferrals negotiated during the pandemic; The inability to adapt, or the maintenance of a hard line, will bring some businesses to the brink and force them to consider various insolvency processes. You must be in a position to show your contracting parties why a position that is too firm or inflexible will not, in the long term, be satisfactory or serve the parties’ interests, in addition to being detrimental to those parties who are likely to require flexibility in the performance of their contractual obligations. You need to be able to identify the considerations specific to your business and business model, and determine the elements that may influence your decisions, such as the nature of the relationship with the other contracting party, particularly if it is a long-standing customer or supplier, whether it is a relationship that will continue into the future or if it is a one-time contract that is non-recurring, and what impacts and reputational risk your actions may entail. Beyond legal principles, the long-term business relationship must be prioritized and protected. This argument should not be underestimated. The objective of most Quebec businesses is to find satisfactory common ground for the parties involved, while trying to minimize the impacts on both sides. The watchword the parties should keep in mind is “flexibility.” During these times when solidarity is in order, it seems to us that it would be wise for each party to make the effort to reach a duly negotiated temporary agreement. We are sharing these options to provide you with ideas on how to approach the negotiation of ongoing contracts, knowing that each contract, relationship and situation are  unique. For more information, our corporate law team remains at your disposal to accompany you during the pandemic. #WeWillGetThroughThis   Section 1470 para. 2 C.C.Q. Didier Luelles, La bonne foi dans l'exécution des contrats et la problématique des sanctions, Canadian Bar Review, Vol. 83, 2004, pp. 189-190.

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  • The Impact of COVID-19 on Contracts

    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.

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  • Prescription and Indirect Victims of Bodily Injury: the Supreme Court Rules

    On October 13, 2017, the Supreme Court of Canada rendered an important decision1, putting an end to a jurisprudential and doctrinal debate on civil liability and prescription in the field of municipal liability. Facts In October 2010, Ms. Maria Altragracia Dorval ("Dorval") was murdered by her ex-spouse. The respondents, who were close relatives of Dorval, blamed the police officers of the City of Montreal ("City") for failing to follow up on Dorval's complaints in the weeks preceding her murder. In October 2013, the respondents instituted an action in damages against the City, as principal of the police officers. In a motion to dismiss, the City argued that the six-month time limit for prescription set out in article 586 of the Cities and Towns Act2 ("CTA") applied and that the respondents' action was prescribed. According to the City, the respondents were not direct victims of bodily injury and could nottherefore take advantage of the three-year prescription period set out in article 2930 of the Civil Code of Quebec3 ("C.C.Q."), which states, in particular, that an action based on bodily injury is prescribed by three years, notwithstanding any contrary provision. The respondents, in turn, argued that, even as indirect victims, they did benefit from prescription under article 2930 C.C.Q. on the basis that the purpose of the recourse is to compensate for damages arising from a bodily injury. Issue in dispute Was the respondents' recourse as indirect victims extinguished because they failed to comply with the prescription period of six months under the CTA, or did they also benefit from the three-year prescription period provided in article 2930 C.C.Q.? Case law and doctrine The disputed issue, while dealing with the prescription period, raised the question of how the injury was to be characterized. In this case, did the indirect victims suffer a bodily injury? The issue of characterizing the injury gave rise to two different lines of authority in the case law and doctrine. The first line of authority characterizes the injury, whether it be bodily, moral or material, on the basis of the consequences of the interference suffered by the victim. Thus, it focuses on determining the effects of the wrongful act, downstream, and on characterizing the injury as a function of the damages suffered. In this case, since the damages suffered by the indirect victims were not bodily in nature, they were not victims of bodily injury, but rather, of moral or material injury. The second line of authority characterizes the injury on the basis of the type of interference itself, and therefore upstream. The focus here is on characterizing the wrongful act itself, i.e., whether it pertains to the physical integrity of the person, his or her property, or psychological integrity. Next, the consequences of this interference are characterized as pecuniary or non-pecuniary damages. In this case, given the nature of the interference was a bodily injury, the injuries suffered by the victim's relatives would also be characterized as bodily in nature, causing them pecuniary and non-pecuniary damages, depending on the death's impact on those persons. Proceedings in the lower courts The Superior Court granted the City's motion and dismissed the respondents' action, holding that it was prescribed. Following the first line of authority, the court found that only immediate victims can take advantage of the three-year prescription period conferred by article 2930 C.C.Q., since only they have suffered a "bodily injury". The Court of Appeal, following the second line of authority, held instead that the respondents' action was not prescribed. It found that the injury must be characterized according to the type of interference that caused it, and not based on the nature of the damages claimed. Accordingly, since the respondents' action was founded on a bodily injury, it was therefore covered by the three-year prescription period under article 2930 C.C.Q. Supreme Court of Canada In a majority judgment written by Justice Wagner, the Court found that the basis of the action brought by the respondents was the reparation of Dorval's bodily injury resulting from the City's wrongful interference with her physical integrity. It therefore held that article 2930 C.C.Q. must be interpreted in favour of the indirect victims of a bodily injury. In reaching this conclusion, the Supreme Court first considered the decision of the Court of Appeal in the Tarquini case.4 In that matter, the plaintiff claimed damages from the City of Montreal as a result of the death of her spouse in a bicycle accident. As in this case, the City of Montreal pleaded the short prescription period under the CTA. The Court of Appeal found that the plaintiff's recourse was not prescribed on the basis that the bodily injury in question under article 2930 C.C.Q. did not solely contemplate the injury suffered by the immediate victim, but rather, any damages resulting from a bodily injury, including those of indirect victims. Next, the Supreme Court, acknowledging that the expression "bodily injury" must be interpreted as resulting from interference with a person's physical integrity, opted to resolve the issue by reference to the basis of the action as instituted, in accordance with the second line of jurisprudential and doctrinal authority. It submitted that the characterization of the victims' action, whether as direct or indirect, is determined on the basis of the type of interference alleged, whether bodily, material or moral. As for the consequences thereof, they correspond to the heads and the characterization of the damages claimed. The Supreme Court indicated that the purpose of article 2930 C.C.Q. is to protect personal integrity and ensure the full indemnification of victims. Consequently, eliminating the distinction between direct and indirect victims favours the achievement of this objective by conferring on all victims the benefit of an extended prescription period. Furthermore, the Supreme Court was of the view that to distinguish between immediate victims and collateral victims would have the effect of creating two different prescription periods for the same wrongful act. This inconsistency is avoided by favouring a broad interpretation of article 2930 C.C.Q. The Court also noted that, since the Tarquini decision, both the doctrine and case law had preferred this interpretation, favouring the stability of the law. The Court held that "any civil liability action instituted to claim reparation for the direct and immediate consequences of interference with a person’s physical integrity must be based on the obligation to make reparation for bodily injury caused to another"5 within the meaning of article 2930 C.C.Q., whether it be the recourse of the direct victim or indirect victim. Thus, indirect victims are also entitled to the prescription period of three years. Dissent We note that Justices Côté and Brown, preferring the first line of authority referred to above, issued a dissenting opinion. In their opinion, since the respondents were not direct victims of interference with physical integrity, they could not rely on article 2930 C.C.Q. Accordingly, they found that the respondents' action was based instead on the obligation to compensate for the moral and material injury they had suffered as a result of the death of their relative, and not on the bodily injury which was in fact suffered by Dorval alone. Only a person having suffered interference with his or her own physical integrity could benefit from the three-year prescription set out in article 2930 C.C.Q. In our view, the country's highest court has clearly resolved the debate on this issue.   Montréal (Ville de) c. Dorval, 2017 SCC 48 Cities and Towns Act, C.Q.L.R., c. C-19 Civil Code of Quebec, C.Q.L.R., c. CCQ-1991 Montréal (Ville) c. Tarquini, [2001] RJQ 1405 Montréal (Ville de) c. Dorval, 2017 SCC 48, para. 55

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  • Artificial Intelligence and the 2017 Canadian Budget: is your business ready?

    The March 22, 2017 Budget of the Government of Canada, through its “Innovation and Skills Plan” (http://www.budget.gc.ca/2017/docs/plan/budget-2017-en.pdf) mentions that Canadian academic and research leadership in artificial intelligence will be translated into a more innovative economy and increased economic growth. The 2017 Budget proposes to provide renewed and enhanced funding of $35 million over five years, beginning in 2017–2018 to the Canadian Institute for Advanced Research (CIFAR) which connects Canadian researchers with collaborative research networks led by eminent Canadian and international researchers on topics including artificial intelligence and deep learning. These measures are in addition to a number of interesting tax measures that support the artificial intelligence sector at both the federal and provincial levels. In Canada and in Québec, the Scientific Research and Experimental Development (SR&ED) Program provides a twofold benefit: SR&ED expenses are deductible from income for tax purposes and a SR&ED investment tax credit (ITC) for SR&ED is available to reduce income tax. In some cases, the remaining ITC can be refunded. In Québec, a refundable tax credit is also available for the development of e-business, where a corporation mainly operates in the field of computer system design or that of software edition and its activities are carried out in an establishment located in Québec. This 2017 Budget aims to improve the competitive and strategic advantage of Canada in the field of artificial intelligence, and, therefore, that of Montréal, a city already enjoying an international reputation in this field. It recognises that artificial intelligence, despite the debates over ethical issues that currently stir up passions within the international community, could help generate strong economic growth, by improving the way in which we produce goods, deliver services and tackle all kinds of social challenges. The Budget also adds that artificial intelligence “opens up possibilities across many sectors, from agriculture to financial services, creating opportunities for companies of all sizes, whether technology start-ups or Canada’s largest financial institutions”. This influence of Canada on the international scene cannot be achieved without government supporting research programs and our universities contributing their expertise. This Budget is therefore a step in the right direction to ensure that all the activities related to artificial intelligence, from R&D to marketing, as well as design and distributions, remain here in Canada. The 2017 budget provides $125 million to launch a Pan-Canadian Artificial Intelligence Strategy for research and talent to promote collaboration between Canada’s main centres of expertise and reinforce Canada’s position as a leading destination for companies seeking to invest in artificial intelligence and innovation. Lavery Legal Lab on Artificial Intelligence (L3AI) We anticipate that within a few years, all companies, businesses and organizations, in every sector and industry, will use some form of artificial intelligence in their day-to-day operations to improve productivity or efficiency, ensure better quality control, conquer new markets and customers, implement new marketing strategies, as well as improve processes, automation and marketing or the profitability of operations. For this reason, Lavery created the Lavery Legal Lab on Artificial Intelligence (L3AI) to analyze and monitor recent and anticipated developments in artificial intelligence from a legal perspective. Our Lab is interested in all projects pertaining to artificial intelligence (AI) and their legal peculiarities, particularly the various branches and applications of artificial intelligence which will rapidly appear in companies and industries. The development of artificial intelligence, through a broad spectrum of branches and applications, will also have an impact on many legal sectors and practices, from intellectual property to protection of personal information, including corporate and business integrity and all fields of business law. In our following publications, the members of our Lavery Legal Lab on Artificial Intelligence (L3AI) will more specifically analyze certain applications of artificial intelligence in various sectors and industries.

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  • Honesty of financial advisors and discretion of the Autorité des marchés financiers: the Québec Court of Appeal rules

    In a decision issued last May 20,1 the Québec Court of Appeal affirmed a judgment2 of the Superior Court of Québec rendered on October 28, 2013, which dismissed the action in damages for more than $7 million brought by a former representative in insurance of persons and in group savings plan brokerage, Mr. Alan Murphy, against the Autorité des marchés financiers (“AMF”). Facts Mr. Murphy was convicted in 2007 by the Disciplinary Committee of the Chambre de la sécurité financière of 32 charges,3his registration was permanently cancelled, as well as being temporarily cancelled for three years and one year, in respect of his areas of practice, and he was fined a total of $20,000. He then obtained a stay of both the permanent cancellation and the payment of the fines.4 Upon review by the Court of Québec, his sentence was reduced to a temporary cancellation for one year as well as the payment of a $12,000 fine.5 Despite the revocation of his certificate and the numerous notices from the AMF, Mr. Murphy continued acting as a representative, thereby significantly worsening his disciplinary record. Upon the expiry of the period during which his registration was temporarily cancelled, the AMF refused to renew Mr. Murphy’s certificate of practice. Claiming that in doing so the AMF had acted excessively, unreasonably and contrary to the requirements of good faith by multiplying the administrative obstacles, inspections and investigations against him, he sued the AMF in the Superior Court, contending that their actions demonstrated the bad faith required to substantiate a claim for $7 million in damages. Among other things, Mr. Murphy cited the judgment of the Court of Québec which had changed the sanction imposed on him and criticized the AMF. In response, the AMF argued that its refusal to issue a new certificate to Mr. Murphy was justified because he lacked the necessary degree of honesty to practise as a representative in insurance of persons and in group savings plan brokerage. Essentially, the issue raised was whether the AMF was protected by the relative immunity conferred on it for acts performed in good faith in the exercise of its functions, as provided in section 32 of the Act respecting the Autorité des marchés financiers.6 Judgment of the Court of Appeal Firstly, the Court stated that the clause protecting the AMF is comparable to the clause that protects the Quebec professional orders. It then cited the leading decision of the Supreme Court of Canada on relative immunity clauses, the Finney case,7 which states that bad faith includes, among other things, intentional fault, which can constitute an abuse of power. This concept also includes serious carelessness or recklessness which “implies a fundamental breakdown of the orderly exercise of authority, to the point that absence of good faith can be deduced and bad faith presumed.”8 Next, to determine whether Mr. Murphy had the necessary honesty to carry on his practice as an advisor in group insurance, the Court considered the numerous decisions which the AMF had rendered against him. It should be noted that Mr. Murphy took all the measures available to him to contest9 the decisions rendered against him, while choosing nonetheless to continue practising his profession, despite the fact he no longer had the certificate authorizing him to practice. As a result, several penal complaints10 were also lodged against him. The Court of Appeal found that the discretionary power conferred on the AMF under section 220 of the Act respecting the distribution of financial products and services11 (“ADFPS”) to assess the degree of honesty of persons applying for authorization to practise as a financial advisor, and to issue certificates based thereon, is within the exclusive jurisdiction of the AMF. The fact that Mr. Murphy had illegally engaged in activities reserved for representatives was a sufficient ground which allowed the AMF to conclude that he lacked a sufficient degree of honesty pursuant to sections 219 and 220 of the ADFPS. The Court found that the AMF had adequately assessed Mr. Murphy’s lack of honesty in refusing to issue his certificate. Accordingly, the Court of Appeal held that the AMF benefited from the immunity conferred by section 32 of the Act respecting the Autorité des marchés financiers against the action instituted by Mr. Murphy. It therefore upheld the judgment of the Superior Court dismissing his action. Murphy c. Autorité des marchés financiers, 2016 QCCA 878. Murphy c. Autorité des marchés financiers, 2013 QCCS 5764. Rioux c. Murphy, June 12, 2007, No. CD00-0404. Murphy c. Chambre de la sécurité financière, 2007 QCCQ 7950. Murphy c. Chambre de la sécurité financière, 2008 QCCQ 5427; Murphy c. Autorité des marchés financiers, 2010 QCCA 1078; application for leave to appeal to the Supreme Court of Canada dismissed (S.C. Can., 2011-01-27) 33860. Act respecting the Autorité des marchés financiers, CQLR, c. A-33.2. Finney v. Barreau du Québec, [2004] 2 S.C.R. 17. Ibid., para. 40. 2008-PDIS-0086 (July 25, 2008); 2008-DIST-0090 (September 19, 2008); 2009-PDIS- 0190 (July 23, 2009); Murphy c. Albert, 2009 QCCS 6366; Murphy c. Albert, 2011 QCCA 1147; 2011-PDIS-0249 (October 7, 2011); number unknown (January 10, 2012). Autorité des marchés financiers c. Murphy, 2010 QCCQ 11692; Murphy c. Autorité des marchés financiers, 2011 QCCS 3510; Murphy c. Autorité des marchés financiers, 2011 QCCA 1688; Autorité des marchés financiers c. Murphy, 2016 QCCQ 2992. CQLR, c. D-9.2.

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  • Fraud, nullity and compulsory professional liability insurance: the Québec Court of Appeal rules in

    On May 16, 2016, the Québec Court of Appeal adjudicated1 on whether a professional liability insurer can plead the nullity of a policy based on misrepresentations or concealment of facts by the insured. This decision is of interest because it addresses the novel issue of whether a liability insurer can claim the nullity of an insurance contract where it is compulsory for the insured to hold such insurance under the applicable legislation. Facts In preparing for their retirement, Jean-Pierre Brunet (“Brunet”) and Giovanni Berretta (“Berretta”) as well as their holding companies, invested more than $2.5M through a group savings plan brokerage firm, Triglobal Capital Management Inc. (“Triglobal”), and its president and director, Thémiskoklis Papadopoulos (“Papadopoulos”), who were registered with the Autorité des marchés financiers. Papadopoulos managed and invested the assets of Brunet and Berretta, as well as those of several other investors, in two offshore funds located in the Bahamas and in the Cayman Islands. Until the beginning of 2008, Axa Assurances Inc. (“Axa”) was the liability insurer for Triglobal and its 200 representatives. In 2007, a newspaper reported that Triglobal, Papadopoulos and another shareholder had engaged in wrongdoing with respect to the offshore funds in which Brunet and Berretta had invested. A few days later, the same newspaper published a corrected version of its previous article. At that time, based on the answers provided by Triglobal and its representatives, Axa decided to extend the coverage of the insurance policies then in effect, and to renew them thereafter. A few months after the renewal of the insurance policies, a freeze order, cease trade order and prohibition against acting as securities advisers were issued against Triglobal and Papadopoulos pursuant to certain provisions of the Act respecting the Autorité des marchés financiers2 and the Securities Act3 which were in force at that time. A provisional director was also appointed. A few days later, Axa informed Triglobal that it was canceling its insurance policy. The facts adduced into evidence revealed that Papadopoulos and one of his acolytes had funnelled certain investments entrusted to Triglobal through the offshore funds with the intention of defrauding certain investors, including Brunet, Berretta and their companies through the use of a fraudulent financial operation, namely a “Ponzi Scheme”. Brunet, Berretta and their companies sued Axa in its capacity as Triglobal’s liability insurer to recover their losses. Judgment of the Superior Court of Québec4 The trial judge held that Axa could seek the nullity of the policy. He found that Triglobal’s officers breached their obligation to disclose circumstances which would materially influence the risk, namely, the fraudulent scheme. Axa was justified in canceling the policy because if it had known all the circumstances surrounding the risk, it would not have agreed to issue the policy.Therefore, the Court dismissed the action brought by Brunet, Berretta and their companies. Judgment of the Court of Appeal La Cour d’appel confirme unanimement le jugement de la Cour supérieure. The Court of Appeal unanimously affirmed the Superior Court’s judgment. Firstly, the Court rejected the argument by Brunet and Berretta that Triglobal’s insurance policy could not be canceled because provisions of public order in the Act respecting the distribution of financial products and services (“ADFPS”)5 and the Regulation respecting firms, independent representatives and independent partnerships (“RFIRIP”)6 obliged Triglobal and its brokers to hold a liability insurance policy. After reviewing the relevant provisions of the ADFPS and the RFIRIP, it held that nothing in those provisions precluded the application of the fundamental principles governing the relationship between the insurer and the insured. Thus, in accordance with article 2410 of the Civil Code of Québec (“C.C.Q.”), a liability insurer can invoke the nullity of its own insurance policy where material circumstances were not disclosed to it that were likely to influence its decision to accept the risk. It noted that nothing in the cases of Souscripteurs du Lloyd’s c. Alimentation Denis & Mario Guillemette inc.,7 Audet c. Transamerica Life Canada8 or Larrivée c. Murphy9 supported the proposition that provisions of public order which require a professional to hold liability insurance should supersede the principle that the insured must disclose all of the circumstances that are relevant for the insurer’s assessment of the risk. Secondly, the Court of Appeal held that the conditions for the application of article 2410 C.C.Q. had been met. The misrepresentations and concealment of facts by Papadopoulos as to the true nature of his fraudulent activities when the disclosure of risks was made to Axa were attributable to Triglobal since, as director and president, he was its alter ego. In fact, the evidence showed that Triglobal communicated through him when it submitted the relevant information for the assessment of risk by Axa, while hiding the fraudulent scheme, thereby distorting the insured risk. Had the true risk been revealed to Axa, it would not have agreed to issue the insurance policy. This conclusion might have been different however if Papadopoulos had only been an employee of Triglobal. Article 2464 C.C.Q. obliges the liability insurer to pay the indemnity where the insurer covers the insured for harm caused by another person for whom the insured is responsible, such as the employer’s liability for its employee. Conclusion This decision is the first rendered by the Québec Court of Appeal on the issue of whether an insurer can seek the annulment of a liability insurance contract where it is imposed on the insured by law. It confirms that, unless prohibited by an express provision of the legislation, the insurer may apply for the nullity of the insurance policy where the conditions for doing so are met.   Brunet c. Axa Assurances inc., 2016 QCCA 832, juges France Thibault, Yves-Marie Morissette and Mark Schrager CQLR c. A-33.2. CQLR c. V-1.1. Brunet c. Axa Assurances, 2014 QCCS 5227. CQLR c. D-9.2. CQLR c. D-9.2, r. 2. 2012 QCCA 1376. 2012 QCCA 1746. 2014 QCCA 305.

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  • Legal newsletter for business entrepreneurs and executives, Number 19

    CONTENT  Notifying your insurer of potential legal proceedings : A sensible measure which may help you avoid significant costs! The ABCs of Managing >Absenteeism at WorkNOTIFYING YOUR INSURER OF POTENTIAL LEGAL PROCEEDINGS: A SENSIBLE MEASURE WHICH MAY HELP YOU AVOID SIGNIFICANT COSTS!Jonathan Lacoste-JobinCompany directors sometimes have the reflex of minimizing the importance of a letter of demand or of the threat of a legal action. Fearing, for example, to see their insurance premiums increase, they sometimes decide not to notify their insurer of potential legal proceedings. This can have significant consequences and cause problems that a simple notice could have avoided.OBLIGATION TO NOTIFY THE INSURERParticularly in liability insurance matters, the insured has the obligation to notify his insurer as soon as he becomes aware of any loss, as provided under article 2470 of the Civil Code of Québec. Such is the case, for example, upon receipt of a letter of demand. If the insured neglects to notify his insurer, the insurer may, in certain circumstances, refuse to respect its own obligations.This article also provides that the insured must declare any loss “which may give rise to an indemnity”, that is, which would be covered under the insurance policy. Once again, it is best to play it safe. In fact, it is not for the insured to determine whether a loss is covered or not1. When in doubt, it is therefore prudent to notify the insurer as soon as possible upon a loss occurring, the receipt of a formal notice or a legal action.A timely notice will allow the insurer to investigate, meet with the appropriate witnesses, visit the site, hire the necessary experts, etc. It will also allow the insured to more quickly be informed of the position of the insurer as to insurance coverage.Failing to receive such a notice, an insurer sustaining injury therefrom may set up against the insured any clause of the policy providing for forfeiture of the right to indemnity. A liability insurer could thus refuse to cover the loss and refuse to defend its insured against legal proceedings.COSTS OF DEFENCEOne of the main obligations of the insurer in liability insurance matters is that of defending its insured against any proceedings covered by the insurance policy. Article 2503 of the Civil Code of Québec provides that the costs and expenses resulting from actions against the insured, including those of the defence, judicial costs, lawyers’ and expert fees, are borne by the insurer, over and above the proceeds of the insurance. This obligation is all the more important since the costs of defending a legal action may escalate rapidly even if the amount claimed is not very high.With this in mind, it is therefore prudent and advisable to notify the insurer as soon as possible in order to have him assume these costs, irrespective of the amount claimed and the chances of the proceedings being successful.DEMONSTRATION OF INJURY SUSTAINED BY THE INSURERTo invoke a late notice, the insurer must however demonstrate that it suffered an injury therefrom. It may assert, for instance, that it was prevented from investigating and that the site of the loss has been disturbed between the event and the time it received the notice2. The disappearance of exhibits or evidence which would have allowed to establish the loss, exonerate the insured or involve a third party, the death of some witnesses, etc. may also constitute an injury to the insurer3.Although the courts require from insurers convincing demonstration of the injury sustained, failure to notify the insurer may be fatal to the claim of an insured, even if he successfully defends the liability proceedings instituted against him.4CONCLUSIONAn insured has the obligation to notify his insurer of a loss as soon as he becomes aware of it. Upon receipt of a letter of demand or a notice whereby he may incur liability, the insured should notify his insurer accordingly. Failure to do so may result in the insurer refusing to take up the defence of the insured and thus put him in a position where he has to incur significant costs which he may have avoided. It is always better to be safe than sorry.________________________________1 Marcoux v. Halifax Fire Insurance, [1948] S.C.R. 278; Androutsos v. Manolakos, J.E. 2000-2046 (C.S.).2 Union canadienne Compagnie d’assurance v. Bélanger [1998] R.R.A. 685 (C.A.).3 LEMAIRE, M., Du délai d’avis et de la prescription en assurance : quelques problèmes, Développements récents en droit des assurances (2001), Service de la formation permanente du Barreau du Québec, Yvon Blais, 2001, online: EYB2001DEV220.4 Axa Boréal Assurances inc. c. Université Laval J.E. 2003-540 (C.A.); See also Gagnon v. Ratté [1996] R.R.A. 766 (C.S.).THE ABCs OF MANAGING ABSENTEEISM AT WORKMarie-Hélène JolicoeurINTRODUCTIONAbsenteeism brings with it high costs for employers, leading to losses in efficiency, productivity and even the demoralization of staff. In such a context, the employer must act quickly. This text provides an overview of the basic principles applicable to absenteeism.1The obligation to perform work is the foundation of the employment contract.2 The employer can expect work to be performed in a consistent manner and for such work to be of sufficient quality.However, a wide range of laws apply to the issue of absenteeism, sometimes making it difficult for employers to make sense of them all and to fully understand the scope of their managerial rights. In a unionized environment, such managerial rights are of course limited by the terms of the collective agreement.Generally speaking, an employer is entitled to be informed of the health of its employees , meaning that he or she may be provided with access to certain medical information. In addition, the employer has not only the right, but also the duty, under various occupational health and safety laws, to ensure that such an employee is capable of performing his or her work. The employer is also entitled to be informed of the reasons for the employee’s absence, to assess whether such justifications are reasonable, and, if necessary, to take disciplinary action.There are two forms of absenteeism, and each must be managed in a different way.UNJUSTIFIED ABSENTEEISMUnjustified absenteeism can leave the employee open to sanctions in accordance with the principle of escalating sanctions (verbal notice, written notice, short suspensions, lengthy suspensions, and dismissal).Unjustified absences are absences which are neither authorized nor justified, and include absences taken under false pretences. There are also other violations which are related to absenteeism, such as the failure to provide notice of an absence or of the fact that one will arrive late to work (even where such absence/ tardiness is justified), the unjustified and unauthorized abandonment of one’s position, the refusal to provide a valid medical certificate upon request, or the falsification or fabrication of a medical certificate.Where absences are repeated or combined with other violations, the sanction will be more severe.Note that, in the absence of specific clauses in the collective agreement on this subject, an absence for “personal reasons” is not justified.JUSTIFIED ABSENTEEISMJustified absenteeism is involuntary. In such a case, the employer’s management of the employee will be administrative rather than disciplinary in nature.For example, an employee may be absent on numerous occasions, all of which may be justified, particularly if the absences have been authorized by the employer for a valid reason (e.g., health problems), or were permitted by statute (Act Respecting Industrial Accidents and Occupational Diseases,3 Act Respecting Labour Standards4) or the collective agreement.This type of absenteeism can sometimes justify dismissal. For this to be the case, the following five (5) elements must generally be demonstrated:1) The absenteeism is excessive and lasts for a significant amount of time.In this respect, it is useful to compare the employee’s rate of absenteeism with the average rate of absenteeism within the company. While there is no magic number, an absenteeism rate fluctuating at a minimum of about 20% over a period of three (3) or four (4) years can be considered excessive.52) Little likelihood of improvement in the foreseeable future.If the employee’s absenteeism is primarily or entirely due to a single cause (e.g., chronic illness), medical evidence will be necessary and must address the prognosis, among other things. The instructions to the medical expert must be well-written so that he or she can provide a complete and substantiated opinion. Where the absence is due to multiple causes, such evidence is not required.3) The absenteeism has consequences for the business.It is advisable to document the effects of the absenteeism both on the workplace (e.g., work overload) and on the costs that it entails (e.g., overtime, new hires).4) The employee is informed of the problem and of the risk of losing his or her job.It is appropriate to meet with the employee to ensure that he or she is aware of, and to require him or her to resolve, the absenteeism problem. The employee should be informed that his or her employment may be terminated if his or her attendance does not improve.5) The employee has a disability or “handicap”6 and the employer is not able to accommodate him without undue hardship.If the employee has a “handicap” within the meaning of the Charter of Human Rights and Freedoms,7 the duty to accommodate will be triggered. For example, physical musculoskeletal limitations, alcoholism, drug addiction, bipolar illness, depression, and anxiety may all constitute “handicaps”. The employer will therefore have a duty to attempt to find a reasonable accommodation. The employee, his union, where applicable, and his colleagues must also be involved in this process. However, the employer will be relieved of its obligation if it can demonstrate that it is not possible to accommodate the employee without experiencing undue hardship. Undue hardship may result from the impact of the accommodation on other workers or from the significant costs the business may incur given its size and financial resources.MEDICAL CERTIFICATEThe employer is not entitled to require medical certificates on a systematic basis, but rather must have a legitimate interest and valid reasons for doing so. Such reasons may include:  repeated or chronic absenteeism; where questionable reasons are given for the absence; to evaluate an employee’s ability to return to work following a prolonged absence; to evaluate the employee’s ability to perform the work where there are valid reasons for doubting his or her ability (e.g. repeated falls, disorientation, blackouts).To be valid, the medical certificate must be signed by a physician and must refer to the specific dates of the absences. A mere statement that the employee was seen by a physician is insufficient.8 The employer may require a detailed medical certificate indicating a diagnosis.9CONCLUSIONWe invite you to clearly inform your employees of the company’s expectations as they relate to attendance ( punctuality, notice of absences or tardiness prior to the beginning of one’s shift, compliance with the work schedule, and the obligation to remain at one’s station for the entire shift, etc.). Employees should also be informed that they may be required not only to justify their absences, but also to provide a valid medical certificate if they cite their health as the reason for their absence.________________________________1 This text was taken from a presentation on the management of absenteeism given by Carl Lessard and Marie-Hélène Jolicoeur on November 13, 2013 at the offices of Lavery de Billy. It is not a legal opinion, nor is it comprehensive in its coverage of this issue, providing only an overview of the basic principles that apply.2 Article 2085 of the Civil Code of Québec, SQ, 1991, c. 64.3 CQLR, chapter A-3.001.4 CQLR, chapter N-1.1.5 For example: Syndicat des métallos, section locale 7625 et Dyne-A-Pak inc., D.T.E. 2012T-212.6 Section 10 of the Charter of human rights and freedoms, CQLR, chapter C-12.7 CQLR, chapter C.-12.8 Aliments Cargill et Travailleuses et travailleurs unis de l’alimentation et du commerce, section locale 500 (TUAC), D.T.E. 2010T-817 (T.A.).9 Syndicat des travailleuses et travailleurs du Pavillon St-Joseph (CSN) et Pavillon St-Joseph, D.T.E. 2010T 754 (T.A.), upheld by the Superior Court (2011 QCCS 3426).

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  • Francization – Bill No 14 amending the Charter of the French language

    This publication was authored by Luc Thibaudeau, former partner of Lavery and now judge in the Civil Division of the Court of Québec, District of Longueuil. The title of this newsletter gives a good summary of the explanatory notes that serve as an introduction to Bill 14, entitled An Act to amend the Charter of the French language, the Charter of human rights and freedoms and other legislative provisions (the “Bill”). The legislator is concerned that English is being used systematically in certain workplaces. The Bill was tabled on December 5, 2012 and the proposed amendments are designed to reaffirm the primacy of French as the official and common language of Quebec.

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  • Liability insurance, professional activities and gross fault: the Québec Court of Appeal sets the record straight

    On August 2, 2012, the Court of Appeal rendered a major decision on professional liability insurance . As a result of this ruling, insureds and insurers alike should review the wording of such policies, especially gross fault exclusions and the definition of "professional activities". The ruling is also noteworthy for its treatment of apportionment of liability between the professional and the client.

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  • Directors and Officers Liability

    The practice area of Directors and Officers Liability focuses on the liabilities of directors and officers arising out of their duties and responsibilities as directors and officers of business corporations and non-profit organizations. Much of modern society’s activities are carried out by such corporate entities, and as they act through their directors and officers, it is not surprising that there is a broad range of sources of liability for directors and officers when acting in their respective capacities for these corporations. 

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  • Legal Developments for Directors and Officers in Canada dans le livre Executive Risks: A Boardroom Guide 2010/11

    Over the past few years, there have been significant developments in both legislation and case law which have had an impact on corporate governance and the obligations and liabilities of directors and officers in Canada. In Canada, directors’ and officers’ statutory liability arises generally from two principal sources: the applicable Canadian and provincial corporate statutes and the provincial securities statutes. Directors and officers may also incur liability arising from various other statutes which impose specific liabilities to ensure compliance with their dispositions. It is important to note that the federal Canadian crown, the ten provinces and the three territories each have their own set of statutes by which corporate entities can be created and regulated. Each of these is slightly different, although most of the provinces have based their statutes in large measure on the federal statute, the Canada Business Corporations Act (R.S.C. 1985, c. C-44, ‘the CBCA’).Securities statutes have been enacted by the provincial legislatures and securities matters are governed by these statutes which are enforced by provincial regulators. There is no central Canadian regulator and while many believe having one would be preferable, the issue has been hotly debated for some time without resolution. Other federal and provincial statutes provide for specific liabilities for directors and officers. Some of the more significant examples are found in tax and excise legislation, employment standards legislation and environmental protection legislation. This chapter is a summary of the significant recent developments in legislation and case law that have an impact on corporate governance and the duties, obligations and liabilities of directors and officers in Canada.

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  • A lawyer’s freedom of expression : there is a limit to what one can say

    With regard to the professional obligations of a lawyer, is it possible outside the physical confines of the tribunal to let a judge know exactly what he thinks of him? Should the response be negative, does it not unduly restrain his right to freedom of expression otherwise guaranteed to all by virtue of the charters of rights and freedoms? This is the question to which the Court of Appeal had to respond recently by rendering judgment in the case of Doré v. Bernard, which has incited various reactions in the legal community.

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