A number of our lawyers in the Litigation and Dispute Resolution practice group in Québec City invite you to take a look back at the most important decisions of 2024 in different areas of law to help you stay informed about the latest court developments.
See the full presentation here: icastGo
Class Actions
Valérie Deshaye and Camila Saïdi
Procureur général du Québec c. Centre d'amitié autochtone de Val-d'Or, 2024 QCCA 403 (available in French only)
This 2024 Court of Appeal decision is the most recent authority on the issue of how to reconcile a class member’s right to anonymity with litigation privilege and the defendant’s right to make full answer and defence.
At trial, the Superior Court made the disclosure of the identity of the members of the class action subject to strict terms of confidentiality applicable until the proceedings for authorization of the class action.
The Court of Appeal reversed this decision, finding that the Superior Court’s approach constituted an unacceptable interference by the court and the applicant in the conduct of the defendant’s defence. It held that the applicant should not be informed in real time of the steps taken by the defendant to verify the allegations in the application for authorization to institute a class action. As a result, the measures imposed by the Superior Court did not respect the defendant’s right to make full answer and defence and litigation privilege.
This decision reiterates that determining the truth underpins all civil proceedings, including the pre-authorization stage of a class action, even if does not have all the elements of a true discovery process.
Action Autonomie, Collectif pour la défense des droits en santé mentale de Montréal c. Institut national de psychiatrie légale Philippe-Pinel, 2024 QCCS 3515
This decision comes in the context of a class action brought by a patient of the Institut national de psychiatrie légale Philippe-Pinel (the “Pinel Institute”) due to the fact that, starting in March 2020, as soon as any patient or Pinel Institute staff member in that unit was suspected of having COVID-19, all patients were fully confined 24 hours a day for 14 days, with only a 30-minute break outside every other day. This action seeks moral and punitive damages against the Pinel Institute due to the trauma patients allegedly suffered as a result of their confinement.
A few weeks after the filing of the application for authorization to institute a class action, the applicant died and Action Autonomie, Collectif pour la défense des droits en santé mentale de Montréal was substituted for the deceased applicant. As the applicant’s lawyers felt that the deceased applicant’s medical file was necessary in order to have all the required information regarding the facts of the proposed cause of action, the applicant’s lawyers filed a discovery request to obtain the person’s complete medical file.
However, the Superior Court rejected the request for disclosure of the deceased applicant’s complete medical file, noting that the case law is unanimous—the defendant cannot be compelled to disclose evidence at the authorization stage. While the Court recognized that this may result in an information imbalance between the parties, it should be kept in mind that the authorization stage is a screening mechanism in which the applicant simply bears the burden of demonstrating an “arguable” or “supportable” case. In determining whether there is an arguable or supportable case, the alleged facts are assumed to be true. Indeed, since Homsy c. Google, 2023 QCCA 1220, it has been established that [TRANSLATION] “should the facts alleged be sufficiently clear, precise and specific, the applicant will not be required to provide ‘some evidence’ in support of its allegations.”
Professional Secrecy
Alex McCutcheon and Marie-Ève Montminy
Several decisions rendered in 2024 serve to highlight the key principles of professional secrecy and the three (3) conditions that must be met in order for it to apply, namely (i) information must be exchanged between a lawyer and their client, (ii) the communication must involve advice or a legal opinion, and (iii) the parties must consider the information to be confidential.
In light of recent case law developments, it is important to remember that for communications or documents to be protected by professional secrecy they need not be expressly identified as “confidential” or “privileged.” It should be noted that the interest of justice in determining the truth does not allow for the lifting of professional secrecy (aka solicitor-client privilege), which is a right protected by the Québec Charter of Human Rights and Freedoms. Moreover, professional secrecy also applies to a client in Canada who communicates with a lawyer in another country, because the right to professional secrecy is held by the client rather than the professional.
Finally, recent case law indicates that there may be consequences for a breach of professional secrecy. Where the conduct of a person violates professional secrecy, this may give rise to punitive damages under both section 49, paragraph 2 of the Charter of Human Rights and Freedoms (“unlawful and intentional interference”) and sections 51 et seq. of the Code of Civil Procedure (“abuse of procedure”).
Commercial Contracts
François Dion
Groupe Inco inc. c. Groupe VSLG inc., 2024 QCCA 1436 (available in French only)
In April 2020, the appellant discovered that the respondent, Groupe VSLG inc. (“VSLG”), was looking to source N95 masks, which were in short supply during the COVID-19 pandemic. On April 23, 2020, both parties signed a supply agreement that designated the appellant as VSLG’s exclusive supplier of two types of N95 masks and included a confidentiality and non-solicitation clause. Their business relationship subsequently evolved into a partnership, formalized by a contract on June 6, 2020, under which the appellant was responsible for the sale of VSLG’s medical products and profits were shared between the two parties. A dispute later arose, resulting in the termination of the partnership and the appellant claiming $5 million as a penalty for breach of the non-solicitation clause in the supply agreement.
The trial judge refused to impose the $5 million contractual penalty. On appeal, it was ruled that the appellant’s claim, based solely on the penalty clause in the supply agreement, was inadmissible, as this contract had been replaced by the partnership agreement. As the relationship between the parties had changed to a business partnership, the non-solicitation clause in the supply agreement no longer applied. The appeal was therefore dismissed, confirming that the existence of the partnership agreement, with its entire agreement clause, rendered the supply agreement inapplicable.
This decision clarifies the application of an entire agreement clause and reaffirms that it is not merely stylistic in nature.
Administrative Law and Civil Procedure
Olfa Riahi
Auer v. Auer, 2024 CSC 36 & TransAlta Generation Partnership v. Alberta, 2024 CSC 37
The Supreme Court clarified the appropriate standard of review for the judicial review of subordinate legislation, thereby ending the debate on the continuing relevance of Katz Group Canada Inc. v. Ontario (Health and Long-Term Care), 2013 SCC 64 (“Katz”), in light of Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65 (“Vavilov”).
The Katz decision had established the principles for reviewing subordinate legislation without, however, discussing the appropriate standard of review. As for the Vavilov decision, it changed the law of judicial review without completely overturning previous case law. The Vavilov decision also introduced a “culture of justification” by establishing that, when available, the decision maker’s reasons should be the starting point for the application of the reasonableness standard. However, subordinate legislation is often not accompanied by formal reasons.
The Supreme Court therefore confirmed that the reasonableness standard set out in Vavilov is presumed to apply when reviewing the validity of subordinate legislation, which review continues to be guided by some of the principles from Katz. However, the Supreme Court determined that maintaining the Katz threshold would be inconsistent with the robust reasonableness review and that, as a result, to be declared ultra vires on the basis that it would be inconsistent with the purpose of the enabling statute, it was no longer necessary for the subordinate enactment to be “irrelevant, extraneous or completely unrelated” to that statutory purpose.
For more details, read our Bulletin: The “Sea Change” from the Supreme Court of Canada in Vavilov Changes the Law of Judicial Review of Subordinate Legislation
Honeywell International inc. c. Bombardier inc., 2024 QCCA 19
In this case, the Court of Appeal closely examined the June 2023 amendment to section 211 of the Code of Civil Procedure (CCP), which added a second paragraph applicable to all pending proceedings, even if instituted before June 30, 2023, and made the right to appeal a judgment rendered on any application resulting from the splitting of a proceeding only possible as of the date of the notice of the judgment terminating the proceeding or as of the date of the judgment if it was rendered at the hearing.
Although it acknowledged that when the legislature amended section 211 CCP, it had probably not contemplated a situation such as the one before the Court, the Court of Appeal stated that paragraph 2 of section 211 CCP was not a provision affecting the right to appeal, rather it merely postpones the time for filing an appeal. While the defendant’s right to appeal continued to exist, it had to be exercised within other time limits. The Court of Appeal confirmed that when splitting a proceeding, this new paragraph now excludes the application of section 31 para 2 CCP.
Public Tenders and Contracts
Karo Dupuis
Public tendering and contracting remains a hot topic in Québec. Its legislative framework is evolving rapidly, with the provisions of Bill 12 having come into force in 2022 and 2023 and those of Bill 62 in October 2024, and with the introduction of Bill 79 in November 2024 by the Minister of Municipal Affairs.
Moreover, the powers of the Autorité des marchés publics (“AMP”) have been strengthened in recent years. These powers include suspending public tenders and issuing recommendations or orders. In October 2024, the AMP issued Order 2024-03 against the Ministry of Transport and Sustainable Mobility for violations of the principles of transparency and fair and honest treatment of competitors in two bidding processes.
As for the courts, in Neptune Security Services Inc. c. Autorité des marchés publics, 2024 QCCS 1966, the Superior Court dismissed the appeal for judicial review filed against the AMP’s decision to revoke the company’s authorization to contract. In its analysis, the Court found that the AMP could reasonably interpret the Act respecting contracting by public bodies so as not to grant corrective measures to a company where it deemed that this would not enable the company to meet the required standards of integrity, and without being required to receive the company's observations in this regard.
Construction Contracts and Claims
Alexandre Belzile
Ville de Montréal c. Pavages D’Amour inc., 2024 QCCA 1464 (available in French only)
This case provides an opportunity to review the conditions for termination as a penalty, as opposed to the unilateral termination of a service contract permitted under article 2125 of the Civil Code of Québec (“CCQ”). Unlike unilateral termination, termination as a penalty allows the parties to claim damages arising from the other party’s non-performance, whereas unilateral termination only allows payment of balances due at the time of termination (2129 CCQ).
This case, based on a public call for tenders, is a timely reminder that termination as a penalty, pursuant to articles 1604 and 1590 of the CCQ, is not a matter of public order and that it is therefore possible to provide for a contractual mechanism for termination distinct from that under the CCQ. For termination as a penalty to be warranted, the event must 1) involve non-performance, 2) that is unjustified, 3) not of minor importance nor repetitive, and 4) that occurs while the opposing party is in default.
In the case at hand, even in the absence of clear time limits in the notices given by the City to Pavages d’Amour, the Court found that they would still constitute valid notices of default since the time actually given to Pavages d’Amour was reasonable. Moreover, the Court also stated that the justification of certain breaches will not be sufficient to avoid termination as a penalty, in particular where an unjustified breach is repeated or sufficiently serious.
We hope you find this case law review useful, and please don’t hesitate to contact our lawyers if you wish to discuss these matters further.
