CLASS 1 INTRODUCTION AND THE CIVIL LAW TRADITION SEPT.5.........................3

M.A. GLENDON, M.W. GORDON & C. OSAKWE, COMPARATIVE LEGAL TRADITIONS IN A NUTSHELL (ST. PAUL, MINN.: WEST PUBLISHING, 1982) AT 13-51...........................................................................6“QU’EST-CE QU’UN CODE CIVIL: DISCOURS PRÉLIMINAIRE SUR LE PROJET DE CODE CIVIL FRANÇAIS PRONONCÉ PAR PORTALIS” IN NAISSANCE DU CODE CIVIL: LA RAISON DU LÉGISLATEUR..................10

CLASS 2 THE CIVIL LAW TRADITION (CONTINUED) SEPT. 12.................................11

PRELIMINARY PROVISION OF THE C.C.Q.................................................................................................11J.E.C. BRIERLEY, “THE RENEWAL OF QUEBEC’S DISTINCT LEGAL CULTURE: THE NEW CIVIL CODE OF QUÉBEC”....................................................................................................................................11DORÉ V. VERDUN (VILLE), [1997] 2 S.C.R. 862......................................................................................12

THE CIVIL CODE AS A SOCIAL CONSTITUTION............................................................................13

J.E.C. BRIERLEY, “QUEBEC’S ‘COMMON LAWS’ (DROIT COMMUNS): HOW MANY ARE THERE?” IN MÉLANGES LOUIS-PHILIPPE PIGEON......................................................................................................13J.M. BRISSON, “LE CODE CIVIL, DROIT COMMUN?” IN P.A. CÔTÉ, ED., LE NOUVEAU CODE CIVIL: INTERPRÉTATION ET APPLICATION..........................................................................................................14

CLASS 3 GOOD FAITH: THE CONCEPT OF GOOD FAITH...............................................15

ART. 6, 7, 1375, 1379, 1401 (2), 1416, 1419, 2805 C.C.Q........................................................................15Good Faith: Baudouin –p.109-115.............................................................................................16Specific Examples of Good Faith: Baudouin –p.138-142..................................................17

V. KARIM, “LA RÈGLE DE BONNE FOI PRÉVUE DANS L’ARTICLE 1375 DU CODE CIVIL DU QUÉBEC: SA PORTÉE ET LES SANCTIONS QUI EN DÉCOULENT”...................................................................................18HOULE V. BANQUE CANADIENNE NATIONALE, [1990] 3 S.C.R. 122 [BACKGROUND READING]..........20ASELFORD MARTIN SHOPPING CENTRES V. A.L. RAYMOND, [1990] R.J.Q. 1971 (C.S.)....................22SUBARU AUTO CANADA V. CARAVANE ET AUTO DU CAP J.E. 96-754 (C.A.).......................................24

CLASS 4 GOOD FAITH (CONTINUED): OBLIGATION TO INFORM AND TO ADVISE SEPT. 26.................................................................................................................................26

ART. 6, 7, 1375, 1401 (2), 1416, 1419, 2805 C.C.Q..................................................................................26P. LE TOURNEAU & L. CADIET, DROIT DE LA RESPONSABILITÉ...........................................................26RÉGIE D’ASSAINISSEMENT DES EAUX DU BASIN DE LA PRAIRIE V. JANIN CONSTRUCTION (1983) LTÉE, [1999] R.J.Q. 929 (C.A.)................................................................................................................28

Obligation d’information à la formation du contrat: Baudouin –p.261.......................29L’obligation de se renseigner: Baudouin –p. 270................................................................29

BOLDUC V. DECELLES, [1996] R.J.Q. 805 (C.Q.)....................................................................................29Distinction avec l’obligation de conseil: Baudouin –p.265..............................................31

COMPAGNIE TRUST ROYAL V. VEILLEUX, [2000] R.R.A. 53 (C.A.)......................................................31

CLASS 5 GOOD FAITH (CONTINUED): OBLIGATION OF COOPERATION................33

ART. 6, 7, 1375, 1470 (2), 1693, 2805 C.C.Q............................................................................................33F. DIESSE, “LE DEVOIR DE COOPÉRATION COMME PRINCIPE DIRECTEUR DU CONTRAT” (1999) 43 ARCH. PHIL. DROIT 259.............................................................................................................................34PROVIGO DISTRIBUTION V. SUPERMARCHÉ A.R.G., [1998] R.J.Q. 47 (C.A.)......................................35BEAUDOUIN- JOBIN: OBLIGATION DE COOPERATION............................................................................38S. MARTIN, “POUR UNE RÉCEPTION DE LA THÉORIE DE L’IMPRÉVISION EN DROIT POSITIF QUÉBÉCOIS” (1993) 34 C. DE D. 599........................................................................................................40P. STOFFEL-MUNCK, REGARDS SUR LA THÉORIE DE L’IMPRÉVISION:..................................................41

CLASS 6 THIRD PARTIES’ RIGHTS..............................................................................................42

ART. 1440-1450, 1457 C.C.Q....................................................................................................................42Les effets du contrat à l’égard des tiers: Baudouin –p.376.............................................43

GENERAL MOTORS V. KRAVITZ, [1979] 1 S.C.R. 790............................................................................44

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Les ayants cause à titre particulier: Baudouin –p.380......................................................46D. JUTRAS, “LE TIERS TROMPÉ (À PROPOS DE L’AFFAIRE BAIL LTÉE)” (1993) 72 CAN. BAR REV. 28.....................................................................................................................................................................46HOULE V. BANQUE CANADIENNE NATIONALE, SUPRA AT 165-167........................................................49CAISSE POPULAIRE DE CHARLESBOURG V. MICHAUD, [1990] R.R.A. 531 (C.A.)................................50

CLASS 7 UNJUST ENRICHMENT...................................................................................................51

ART. 1493-1496 C.C.Q..............................................................................................................................51CIE IMMOBILIÈRE VIGER V. GIGUÈRE INC., [1977] 2 S.C.R. 67............................................................53LOUNGNARATH V. CENTRE HOSPITALIER DES LAURENTIDES, [1996] R.J.Q. 2498 (C.A.) (EDITED)...55TROTTIER V. TROTTIER, [1992] R.J.Q. 2378 (C.A.)...............................................................................55M. LECENE-MARÉNAUD, “LE RÔLE DE LA FAUTE DANS LES QUASI-CONTRATS” (1994) R.T.D.C. 515.....................................................................................................................................................................56

Act juridique et fait juridique: Baudouin –p.40 .....................................................................57L’enrichissement injustifié: Baudouin –p.428.......................................................................57

CLASS 8 REMEDIES: SPECIFIC PERFORMANCE AND PERFORMANCE BY EQUIVALENCE.........................................................................................................................................58

ART. 1590 AND 1601 C.C.Q......................................................................................................................58R. JUKIER, “THE EMERGENCE OF SPECIFIC PERFORMANCE AS A MAJOR REMEDY IN QUEBEC LAW” (1987) 47 CAN. BAR REV. 47....................................................................................................................61CIE DE CONSTRUCTION BELCOURT V. GOLDEN GRIDDLE PANCAKE HOUSE, [1988] R.J.Q. 716 (C.S.)..........................................................................................................................................................64CO-OPERATIVE INSURANCE SOCIETY LTD V. ARGYLL STORES (HOLDINGS) LTD, [1997] 2 W.L.R. 898 (H.L.)...................................................................................................................................................65AUBRAIS V. LAVAL, [1996] R.J.Q. 2239 (C.S.) (EDITED)........................................................................66

CLASS 9 REMEDIES (CONTINUED): LOSS OF CHANCE....................................................67

ART. 1457, 1458, 1607, 1611, 2804 C.C.Q...............................................................................................67LAFERRIÈRE V. LAWSON, [1991] 1 S.C.R. 541........................................................................................69

Loss of Chance: Baudouin............................................................................................................71L. KHOURY, UNCERTAIN CAUSATION IN MEDICAL LIABILITY, D.PHIL. THESIS, UNIVERSITY OF OXFORD, 2003 (EXCERPTS).......................................................................................................................71CASS. CIV. 1RE, 7 JUNE 1989, D. 1991.SOMM.323, J.C.P. 1989.IV.294, D. 1991.JUR.158 (ANNOT. COUTURIER), D. 1991.SOMM.323.............................................................................................................74

CLASS 10 REMEDIES (CONTINUED): ASSESSMENT OF EXTRA-CONTRACTUAL DAMAGES : MORAL DAMAGES.....................................................................................................74

ART. 1457 AND 1607 C.C.Q......................................................................................................................74BENEDEK, “NON-PECUNIARY DAMAGES: DEFINED, ASSESSED AND CAPPED” (1998) 32 R.J.T. 607 AT 651-60.........................................................................................................................................................76CURATEUR V. S.N.E. DE L’HOPITAL ST FERDINAND, [1996] 3 S.C.R. 211...........................................80AUGUSTUS V. GOSSET, [1996] 3 S.C.R. 268 (EDITED).............................................................................81

CLASS 11 REMEDIES (CONTINUED) ASSESSMENT OF EXTRA-CONTRACTUAL DAMAGES: MORAL DAMAGES (CONTINUED) - DEFAMATION AS AN EXAMPLE........................................................................................................................................................................82

ART. 4 OF THE QUEBEC CHARTER OF HUMAN RIGHTS AND FREEDOMS, L.R.Q. C. C-12...................82R. JUKIER, NON-PECUNIARY DAMAGES IN DEFAMATION CASES (1989) 49 R. DU B. 3.......................82PARIZEAU V. LAFFERTY, HARWOOD & PARTNERS, [2000] R.R.A. 417 (C.S.).....................................87

CLASS 12 THE RELATIONSHIP BETWEEN PRIVATE LAW AND PUBLIC LAW.......88

PRELIMINARY PROVISION OF THE C.C.Q.................................................................................................91ART. 3, 10, 32, 35, 36 AND 1457 C.C.Q....................................................................................................91

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ART. 1-9, 10 AND 49 OF THE QUEBEC CHARTER OF HUMAN RIGHTS AND FREEDOMS, L.R.Q. C. C-12....................................................................................................................................................................92BELIVEAU ST-JACQUES V. F.E.E.S.P., [1996] 2 S.C.R. 345. [BACKGROUND READING].......................93AUBRY V. ÉDITIONS VICE-VERSA INC., [1998] 1 S.C.R. 591.................................................................94ARTHUR V. GRAVEL, [1991] R.J.Q. 2123 (C.A.).....................................................................................96A. POPOVICI, “DE L'IMPACT DE LA CHARTE DES DROITS ET LIBERTÉS DE LA PERSONNE SUR LE DROIT DE LA RESPONSABILITÉ CIVILE: UN MARIAGE RATÉ?” [1998-1999] MEREDITH MEM. LECT. 49-94...........................................................................................................................................................96

CLASS 13 REVISION AND PREPARATION FOR THE EXAMINATION.........................97

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CLASS 1 Introduction and the Civil Law Tradition Sept.5

What is the ‘civil law’?- may be used to describe private vs. public law, or national vs. international- when we refer to civil law we mean romanic/germanic vs. anglo-american common law- Romano-Germanic legal system of Continental Europe as opposed to Anglo-American Common Law.

We trace the traditions to their separate historical developments.

The Origine of the civil law- Started with 12 tables. (533/4 AD)- Then, Justinian’s compilation of law is created to capture sophisticated body of private law (developed

over the century through dispute resolution system) Corpus Juris Civilis (body of civil law). - Roman Empire brought its laws with them to everyone they conquered. Roman Empire (473 –

1500s (Byzantine)) fell over wide geographic area and time. After the fall of the Roman Empire, many European countries returned to pre-Roman (customary) laws. Roman law falls out of primary use until 11th – 13th C AD.

- Roman law revival occurred with the opening of the first law university (Bologna). Primary disciplines were religion and law, but students were only able to study the ancient Roman texts. With professors, they restructure, interpret, & adapt them to the new ways. Roman law served as the base for Euro Continental law.

- It furnished the common methodology of civil law. Graduates of law university went into world & gained positions of importance in church, government administration, etc, influenced the development of the legal systems in Europe.

- Jus commune of Europe evolved (where “common” refers to a common underlying history and methodology).

What made Roman law so influential? A system of dispute resolution.

Each case decided by lay judge (nobleman or patrician) called iudex. But praetor limited access to the iudex. Very formalistic in structure.

Juriconsults were at the origin of reasoned learning characteristic of the civil law. There was no real legislation or formal judicial training. They decided cases by giving large latitude to opinions of jurisconsults (male only) who made law their specialty, but had no decision-making power. Still, very influential because they gave the decision-maker the reasoned judgment from which the decision would come.

Fundamental Values of the French Code:1) individual autonomy2) freedom of K3) private property

The CCLC of 1866 imports much of these values- degree of abstraction of a code ensures stability and permanence- large animating themes, fundamental values, unlike statutes which have more precise/ specific

objectives- Portalis (22): “principes féconds en conséquences, et non les détails particuliers”- you can’t predict everything- the code tradition presupposes that it’s possible to synthesize the legal system in a small space- there is a high degree of generality- Portalis predicts the large influence of the judiciary… if it’s stated at such a high level of generality, it

seems to be inviting and practically ensuring judicial influence via “interpretation” and application

Is the CCQ still consistent with its underlying values? Has it become too statutory?- the CCLC used to have one article about consent, and all it said was that consent is either express or

implied

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- the CCQ has 11 articles explaining offer and acceptance… some say this is too much

Brisson Article - the idea behind a code is that it is the foundation of other laws – the use communes, the common

thread underlying and running through the legal system- Brisson asks to what extent this holds true in Quebec- What sorts of things can undermine this?

legislation (ie consumer protection act)a) Other QC statutesb) Overlapping federal jurisdiction statutes (i.e. bankruptcy act)… how to mix civilian interpretations

with federal statutesc) QC Charter: CCQ is to be read in harmony with the QC charter

- Brisson says other statutes are inevitable, but the problem is what to do when those statutes contradict the Code, in that case it’s hard to espouse the idea that the code underlies and inspires all other laws

- Brisson says in reality these other statutes inspire the Code, therefore the Code is the sponge-ex: the Quebec Charter and the Consumer Protection Act both go against freedom of K and individual autonomy

- But, if the Code is supposed to be adaptable, flexible, does it really go against the code or does it just help direct the adaptation, isn’t charting the course of the code adaptation? Or is this a stretch?

Chain of influence of Roman Law: Corpus Juris Civilis Code Napoleon closely followed it CCBC followed the CN very closely. CCQ was updated version of that. So Roman law lives on even today.

CVL CULTURE CML CULTURETextual Oral decision-making traditionA priori (stress on theory of law): evolved theoretically

Ex post facto (casuistic): evolved practically. Begins as customary law in court of King. Substantive law consists in case-by-case basis of response to questions

Highly systematized and organized Per Jukier: s/t too organized (e.g. 1, 1.1, 1.1.1, etc)

Not well-organized.

Abstract, general principles Not very well-organized or thought out: results of practical responses to immediate questions before the courts. Lower level of abstraction. Weir: “chaotic kitchens can still produce good food”

Codes in GeneralFundamental animating themes of code rest on 3 principles (recall that it was created post-Revolution):

1) Individual autonomy (personhood)2) Freedom of K (lasted until mid-sixties in Quebec)3) Private property.

E.g. a big issue when rewriting book on obs (book V) was whether there should be a general provision on lesion. The animating themes caused that article not to be in the CCQ.

Presumptions of codes: 1) That one can put forward all residual law, synthesizing all concepts of entire legal system in one

compact edition; 2) That this can be done comprehensively.

Preliminary provision of CCQ reflects this notion: It is the “foundation” of all other laws, although others may compliment or make exceptions to it. It is supposed to be the jus commune (but see Brisson).

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Why codify?1) Bring law to the people! Accessibility of the rules (clear and simple drafting of provisions). But,

articles themselves don’t help you that much. See art. 1457. What it really means is what further jurisprudence tells us. To certain extent, accessibility is a myth. But at least any citizen can buy a code. Can’t do the same in Common Law.

2) To create a jus commune. But there are portions that are overly statutory. See formation of Ks provisions. The CCLC only had 1 article that said “Consent is either express or implied”. That’s it that’s all! CCQ expands this area a lot to include 11 additional articles on details of K formation. Many feel it is not necessary for Code to go into such detail. It should leave off at general principle.

M.A. Glendon, M.W. Gordon & C. Osakwe, Comparative Legal Traditions in a Nutshell (St. Paul, Minn.: West Publishing, 1982) at 13-51.

o The civil law, as the common law, is a sub-tradition of Western legal tradition, which is rooted in the law of Romans.

o Roman law, whose preoccupation with order, administration, law and procedure was unique in the ancient world and has cast a long shadow into the modern one.

o With the Western legal tradition, the subtradition of the civil law is characterized by a particular interaction in its early formative period among Roman law, Germanic and local customs, canon law, the international law merchant, and, later, by a distinctive response to the break with feudalism and the rise of nation states, as well as by the peculiar role it has accorded to legal science.

o Roman law The term Roman law describes the period from the Twelve Tables (c.

450 B.C.) to the Justinian compilations (c. 534 A.D.). similar to the description of ‘Common law’ from 1066 A.D. to present. The various periods according to Roman law’s subject is following :

3rd century B.C. => Jurisconcult, a class of men who made law their specialty, appeared.

1st century B.C. => the Jurisconsults become the first professional lawyers.

What we know as Roman law evolved through the accretion of the opinions they rendered case-by-case.

(Jukier: the reason why the Jurisconsults were important is that they created the concept of ‘reasoning leaning’).

The Classical period (117 A.D. => 235 A.D.) represents the fullest development of ancient Roman law.

The ‘written reason’, called by the medieval scholars who « rediscovered it as the Western world began to emerge from what the French legal scholar calls the ‘customary thicket’ of the Middle Ages. » 

From Justinian’s times to the present, Roman law, except to specialists, generally has meant the sixth century Corpus Juris Civilis of Justinian, which included four parts :

The Digest, a treatise, was by far the most important in terms of its influence on the civil law tradition, particularly in the areas of personal status, torts, unjust enrichment, contracts and remedies.

The Institutes : a short introductory text for students. The Code : a systematic collection of Roman legislation. The Novels : the imperial legislation enacted after the Code and

the Digest were completed. Together, the Digest and the Code were meant to be a complete

and authoritative restatement of Roman law.

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o The « Customary Thicket » and Roman Law Survival In the 11th century, the process became known as the ‘revival’ of Roman

law. Thought Roman legal science and Classical Roman law disappeared in

the welter, diversity and localism of Carbonnier’s ‘customary thicket’, a Romanist element survived and served both as a strand of continuity and a latent, potential universalizing factor in what we think of as the civil law tradition.

o Canon Law Cannon law itself was hybrid of sorts, which had been produced by

Christian notions interacting reciprocally with Roman law after the Christianization of the Empire, a process during which the reign of Constantine.

o Revival of Roman Law The University of Bologna became the principal legal center to which

students flocked from all over Europe to hear learned teachers lecture on the Corpus Juris Civilis.

The Roman civil law, together with the immense literature generated by the Glossators and Commentators, came to be the jus commune, the common law, of Europe.

o Commercial Law In addition to Roman law and canon law, commercial law furnished

another universalizing tendency as Europe emerged from the relative economic stagnation of the Middle Ages.

The Roman law was proved unsuitable for the need to govern business transaction, guilds and merchants’ associations established their own rules and their own tribunals.

Informal rules + expeditious procedures = merchants’ courtso Reception of Roman Law

The jus commune became the basic law of a great part of continental Europe. It proved capable of dealing with many of the new problems posed by a more complex economy; yet as part of a not entirely forgotten past, it had a certain familiarity.

The jus commune infiltrated the law of the various regions of the Holy Roman Empire of the Germanic nation to the point that it came to be regarded as the common law of the empire.

o Nation States and National Lawo Codification

An inevitable consequence of the unification of national law in these early codes was the jus commune was displaced as the basic source of law.

The French Civil Code of 1804 and the German Civil Code of 1896 have served as models for most of the other modern civil codes.

The three ideological pillars of the French civil code were privation property, freedom of contract and the patriarchal family. In these three spheres, the primary role of the State was to be to protect private property, to enforce legally formed contracts, and to secure the autonomy of the patriarchal family.

The Code civil des français was meant to be read and understood by the citizen.

o German Legal Science Unlike France, where political unification had been achieved long before

legal unity, Germany had remained a loose confederation of kingdoms, duchies, principalities and independent city states until it was unified under Bismarck in 1871.

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Historical School: they viewed Germanic, and classical and received Roman law as data, and regarded themselves as scientists formulating and systematizing concepts and principle from this data.

The Pandectist School came to adopt a rather ahistorical stance toward law. The methods and concepts developed by the Pandectists came to dominate legal scholarship in Germany just at the time the preparation of the German Civil Code began in 1874.

The German Civil Code was not a handbook for the citizen, but a system for highly trained experts.

o Distribution of the Civil Law The ‘typical’ civil law systems today are not those of France or the

Federal Republic of Germany, but rather those civil law systems which in modern times have undergone the combined influence of both.

As the civil law has spread and entered into combination with other legal elements, its influence has become attenuated.

It is difficult today to find a single “civil law rule” on any given legal problem. Indeed, there is probably as much diversity in the responses of civil law systems to various legal issues as there is between the civil and the common law tradition.

The definition of the term “civil law” Historically, the term jus civile referred to the law applicable to

Roman citizens, the law which was eventually compiled by Justinian’s jurists into the Corpus Juris Civilis.

The shift away from 19th century liberalism and the market economy has meant a shift in emphasis from private or civil law to public law.

o Contemporary Civil Law The transition of 19th century civil law systems into the 20th century is

closely tied to the transformation of liberal laisse-faire governments into modern social welfare states with planned or regulated economies.

All Western traditions are grounded in the Roman legal tradition.

The Civil Law tradition is characterized by particular interaction in its early formative period among Roman law, Germanic and local customs, canon law, the international law merchant, and later, the rise of nation states and the role it has accorded legal science.

Began as casuistic approach to law, but eventually moved from fixed rules to flexible standards, from concrete to abstract modes of thought. At its height (117 AD – 235 AD), classical Roman law constituted a body of practical wisdom the world had not yet seen. The medieval scholars who rediscovered it centuries later called Roman law “written reason”. All that was available to them was Justinian’s Corpus Juris Civilis which included 4 parts: 1) Institutes; 2) Digests; 3) Code; 4) Novels. Digests have been most influential in Civil law, especially in areas of personal status, torts, unjust enrichment, K and remedies. Code was a systematic collection of Roman legislation. Together they were meant to provide comprehensive restatement of Roman law.

Over time, Roman Empire saw its fall, and subsequent invasions. Corpus continued to be used by Germanic invaders, was influenced by the “customary thicket” (CB p. 8 s.3), modified by Church later on (Canon Law).

Europe entered period of political, economic and cultural transformation from 1050 AD onward that saw the revival of Roman law. Renewed interest in law arose from need for order, predictability, and a system of dispute resolution. University of Bologna became principal legal center to learn about the Corpus Juris Civilis (taught by many learned teachers, including nuns who were the first female law professors). Glossators annotated the Digests in order to reconstruct and explain the old text, but this in

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time gave way to work of Post-Glossators (or Commentators) who saw their work as adopting the law of old to the problems of their day. Very inspired by rational inquiry and speculative dialectic of the day (brought to a peak with Aquinas), which liberated them from literalism of Glossators. They began to explore underlying principles and rationale of various Roman legal rules. Bartolus was greatest Commentator.

All Civil law systems (from Paris and Oxford, Prague and Heidelburg, Cracow and Copenhagen, and beyond) had as their basis a strange brew of Medieval Romano-Germanic law, and learning based on revived Roman law. This formed the base for modifications and variations in each system, and furnished a common methodology. Jus commune (common law) of Europe was Roman law together with literature of Glossators and Commentators. Canon law developed as an independent system that operated alongside Roman law. Commercial law also had universalizing effect, as Roman law was insufficient to meet the particular needs of trade. Guilds and merchants began establishing their own rules and tribunals which came to be viewed as customary law b/c grounded in practical experiences and needs of business people. “Law merchant” eventually became international. Proved stronger than legal traditions, spreading even into England where resistance to Civil law was great. Jus commune soon became basic law of most of Continental Europe.

Through “reception” the laws of private Civil law moved from the universities to the courts. Previously, courts used a haphazard approach to applying laws, drawing from various sources depending on the situation, with jus commune serving a residuary function. Accepted on a wide-scale in Germany, somewhat in Spain, and less in other countries. Judges would often refer difficult cases to law universities, and scholarly responses were adopted such that they became a kind of case-law. The jus commune became like a universal language uniting the West. However, 15th C onward saw rise of nationality and state law which interrupted this somewhat.

By 16th and 17th C, scholars in Holland and France began to view the Corpus as an ancient or historical text only. This marked a step towards the eventual displacement of jus commune. Comprehensive legal system-building of Dutch jurists grounded in what they conceived to be the universal law of nature was prelude to modern codification. The awakening interest in national law, combined with national literatures, vernacular language use in universities, and division between Church and State together were parallel developments that marked the end of Western unity and rise of modern nation-states. Centralization of power within each state gave rise to rapid growth of public and national law.

Codification – All the rage in much of Europe. Scandinavian countries were first to adopt national codes in 17th and 18th C as part of national unification process. Second wave of codification attempted to synthesize political and philosophical thought of the 18th C, and were products of “enlightened monarchs”. Codification displaced jus commune as common law of land, and authority of law was derived from state rather than any inherent reasonableness or suitability of legal norms themselves. Some codes were successful, others too detailed and cumbersome to meet their aspirations. Code Napoleon (1804) and the German Civil Code of 1896 have been most influential and have served as models for most other modern codes. French revolutionary ideas and German legal science gave special stamp and flavour to each, which impacted legal thought throughout the Civil law world.

Three ideological pillars of French code: private property freedom of K, and patriarchal family. Private property: clear break with feudal past to break up strength of aristocracy. Code performed somewhat constitutional function in the other areas. Primary role of state, then, was to protect private property, enforce Ks, and secure autonomy of patriarchal family. French revolutionary ideas were contributing to public law. Stronger central state, elimination of intermediary levels of power. In France as well as in US, drafters realized that language of legislation should be in language accessible to the citizen, and in such general terms as to allow flexibility. One of the draftsmen, Portalis, remarked:

We have equally avoided the dangerous ambition to regulate and foresee everything… The function of law is to fix in broad outline the general

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maxims of justice, to establish principles rich in implications, and not to descend into the details of the questions that can arise in each subject.

Today, it seems the more “typical” civil law systems are not those of Germany and France, but those that in modern times were influenced by both French law and German legal science. NB: Civil law and codification are not coextensive. In Scotland and South Africa, Roman jus commune lives on in uncodified form, combined with other forms (e.g. common law).

Hard today to find a single “civil law rule” on any one problem because of great diversity between Civil Law sub-traditions (sometimes as great as the differences between Civil and Common). What links them together?

“Civil Law” = Historically jus civile applicable to Roman citizens and eventually compiled into the

Corpus Juris Civilis Continental European lawyers understand it to mean the law relating to the subject matter

covered by the codes and their auxiliary statutes. The very heart of the legal system, encompassing forms of legal thought.

Now, a lot of law is being created outside of the codes (public law, administrative law), even in the private realm (employment law (labour codes), landlord-tenant law) which restrict freedom of K. Now, general clauses in codes that allow for judicial discretion result in the creation of a form of judge-made law, despite the tradition’s vehement denial of such a source.

20th C legislation and code revisions differ from classical codes (CB p. 19):1. Eclectic2. Takes into account social diversity rather than impose uniform behaviour3. Codifiers are more realistic decline in belief that universally valid legal postulates can be

found by reason.4. Awareness of limits of law

Now, biggest differences between Civil law and other legal traditions lie in the mental processes, styles of argumentation, and in organizations and methodology of law than in positive legal norms.

“Qu’est-ce qu’un code civil: discours préliminaire sur le projet de code civil français prononcé par Portalis” in Naissance du code civil: la raison du législateur (Paris: Flammarion, 1989) (edited).

o Dans la rédaction d’un Code civil, quelques textes bien précis sur chaque matière peuvent suffie, et que le grand art est de tout simplifier en prévoyant tout.

Tout simplifier, est une opération sur laquelle on a besoin de s’entendre.

Tout prévoir, est un but qu’il est impossible d’atteindre. o Nous n’avons doc pas cru devoir simplifier les lois, au point de laisser les

citoyens sans règle et sans garantie sur leurs plus grands intérêts. o Nous nous sommes également préservés de la dangereuse ambition de vouloir

tout régler et tout prévoir. o Quoi que l’on fasse, les lois positive ne sauraient jamais entièrement remplacer

l’usage de la raison naturelle dans les affaires de la vie.

[Portalis speech about importance of codification & what they hoped to achieve.] All revolution is a conquest. It is crucial to create new laws to meet the new needs. The new laws reverse the powers of fathers, change marriage, and property. A new order of property to reflect a new order of citizens. Change brings about change.

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Good civil laws are the greatest good men can give and receive. They are the source of morals, the palladium of propriety, the guarantee of peace both public and particular. They moderate power, and contribute to respect for power, as if law is justice itself.

Law is not a pure act of power, but an act of wisdom, justice and reason. Law-makers should never lose sight of the fact that laws are for the people, not the other way around.

The art of code-writing is “tout simplifier en prévoyant tout”. But the drafters did not deceive themselves into believing they would really be able to do exactly that for everything. [Can’t see everything and go into detail, but draft provisions to provide large general and “fecund” principles that serve normative functions]. Reason should reign overall, and laws should never replace reason. The purpose of law is to fix general maxims of law , not descend into tiny details , which is the job of the judge during application.

In order to avoid the abuse of power by judges, no citizen should be held to a law unless it is prior and constant. The science of judges and the science of legislators are different. To each his own domain. Keep the roles distinct.

[There’s more but I haven’t gone through everything. These are just highlights]

CLASS 2 The Civil Law Tradition (Continued) Sept. 12

Preliminary provision of the C.c.Q.The civil Code of Quebec, in harmony with the Charter of human rights and freedoms and the general principles of law, governs persons, relations between persons, and property.

The Civil Code comprises a body of rules which, in all matters within the letter, sprit or object of its provisions, lays down the jus commune, expressly or by implication. In these matters, the Code is the foundation of all other laws, although other laws may complement the Code or make exception to it.

J.E.C. Brierley, “The Renewal of Quebec’s Distinct Legal Culture: The New Civil Code of Québec” (1992) 42 U.T.L.J. 484- People, things, and the points of contract b/w them are the topics to be treated. Taken

together, they make up the ‘social constitution’ that a Civil Code represents. This version is incomplete. It does not contemplate directly the person in relation to public power, the state and its emanations.

- It is still as an expression of truly fundamental norms. The Civil Code contains a series of fundamental jural concepts about persons in civil society. The Code constitutes the common law (droit commun, jus commune) in Quebec – albeit a legislated rather than a judge-made common law. The working concepts of the Code, and its language, inform the rest of the law. Statutory legislation, including Quebec’s provincial Charter and, on occasion, even federal law, draw upon its provisions. The Code is a truly fundamental reference point within the legal order.

- As to style of expression, the legal norm will be given expression at a level that achieves a generality or abstraction that enables it to serve over a wide series of particular instances. It is a ‘meaningful generality’ that aspires to accommodate future facts in all their infinite diversity.

- The Code is enabling or permissive legislation rather than an enactment calling for obedience in all its parts.

- A fundamental feature of the civilian approach to interpretation: it is through the Code that one must reach beyond it. Its interpretation is intended to be the servant of a teleological approach and the enemy of a literal, grammatical construction.

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- The new Civil Code of Quebec is now free-standing, and autonomous; it exists on its own, exclusively, without apparent reference to its own bijural antecedents or to its own historical or socio-political context. It is the Code of a new nation-state.

- The Preliminary Provision of the new Code is not a Preamble, is full of good promise. - “General principles of law” have a double role. They are the foundational concepts of Codal

rules that apply them or derogate from them; and, where the written law is silent or obscure, they justify not only the new interpretation of an existing rule, but also the discovery and application of a new rule.

Doré v. Verdun (Ville), [1997] 2 S.C.R. 862 Issue: This appeal concerns the application to municipalities of art. 2930 of C.c.Q, which provides that notwithstanding any stipultion to the contrary, the Civil Code’s 3 year prescriptive period in repect of bodily injury cannot be hindered, and the precedence of that article over s.585 of the Cites and Town Act (C.T.A.), which requires that within 15 days of the date of an accident, notice be given that an action seeking reparation for bodily injury is to be brought against a municipality, failing which the municipality cannnot be found liable. Held: art. 2930 takes precedence over the portions of s.585 C.T.A. that hinder the Code’s 3-year prescriptive period in respect of bodily harm. Reasons:Trial judge:

art. 2930 is a mandatory provision of public order. The Code as the jus commune, applies on a supplementary basis to legal persons established in the public interest.

Baudouin in C.of A: agrees with the trial judge that art. 2930 takes precedence over s.585 C.T.A., that hinder the Code’e 3 year period in respect of bodily harm.

SCC: How to interpretation the Code? - The role of the commentaries of the Minister of Justice

- They are not part of the parliamentary history surrending the enactment of the Civil Code, b/c they are published after the Code was enacted.

- The commentaries provide information on the legislature’s intentions, the context of the new legislative provisions and the sources that were directly considered.

- The interpretation of the Code must be based first and foremost on the wording of its provision. The commentaries are not binding on the courts, and their weight can vary, inter alia in light of other factors that may assist in interpretaing the Code’s provision.

- Interpretation of the Code- The preliminary provision explictly states that the Code is the jus commune of Quebec.

The Code is not a law of excetion. It must be interpretated broadly so as to favour its spirit over its letter and enable the purpose of its provisions to be achieved.

- The Code is the foundation of all other laws dealing with matters to which the Code relates, although such law may complement the Code or make exceptions to it. It is therefore the foundation of all statutes that draw mainly or incidentally on civil law concepts.

- It is also applicable to the aspects of legal persons established in the pubilc interest that come under the Civil Code.

- Art. 2930 must take precedence over “any stipulation to the contrary”. How to interpret the “stipulation”?

art. 2930 was ambiguous: the English version says “any STIPULATION” (under the usual meaning of this word, something in a contract would fall under here); the French version says “toute DISPOSITION” (this could mean the contract or a law/statutethis is much broader). [The Code is telling us here that 2930 is IMPERATIVE.] In the CA, Baudouin allowed the victim to win by saying that the French version takes precedence (because the Code was drafted in French and merely translated to English). In the SCC, Gonthier says “No. Both versions are held to have the same juridical value.” STILL, we have the problem of incoherence. Gonthier turns to the

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Minister’s Comments. He clearly states that the larger intent is to do exactly what is envisaged – the broader scope is consistent with the legislature’s intention: that changes will occur to municipal law. You cannot rely on the commentary: it is similar to doctrine, and is not binding. The term “disposituibon” in the French version cannot be limited to ks; it must also cover legislation.

- Art. 2930 overrides the first principle set out in art. 300, namely that the provisions of special Acts must be applied before applying the provisions of the Code. by using the word “notwithstanding”.

NOTES: - how to interpret the Code provisions?

- Patalis: The art of code-writing is “tout simplifier en prévoyant tout”. But the drafters did not deceive themselves into believing they would really be able to do exactly that for everything.

- SO we should give the Code wide, general sense when interpreting to achieve the purpose of the legislature.

- Two Qs here: 1) purpose & intention;2) special provisions vs. general provisions

- Code is the “droit commune” in the sense that: - Statute;- Residual function;- Conceptual resource – help to interpret other statutes; reference to other statutes

Brierley & Macdonald, eds. Quebec Civil Law (Toronto: Emond Montgomery, 1993)

Code versus Legislation: Enacted like legislation but aspires to be more: permanence; transcend differences. Not merely episodic or instrumental reflection of parliamentary will (like legislation) – it is supposed to reflect fundamental values, present legal concepts at a level of abstraction that ensures stability and permanence. Codification presumes that humans can deduce, order, and formulate general principles that should govern human conduct. A civil code confirms the substantive importance of the private law by formally impressing upon it the imprimatur of the state.

The Civil Code as a Social ConstitutionA text documenting the compact between people by which the fundamental terms of civil society are established. A Code serves as a reference point for later substantive legal development, a model for the form of legal expression, and a compass for the discovery of other implicit principles of private law.

CN was canvas for creation of CCBC CCBC is derivative. Reflects alliance with France and French way: rights set out first, remedies later; substance more than procedure. But CCBC is also original construction with blending of institutions.

The Civil Code as a Juristic Technique Code is a singular technique by which the law is expressed.

J.E.C. Brierley, “Quebec’s ‘Common Laws’ (Droit communs): How Many Are There?” in Mélanges Louis-Philippe Pigeon (Montréal: Wilson & Lafleur, 1989) at 109-128 (edited).- The Civil Code is droit commun in a special sense, in both its own right and in its relation to other enactment.

(1) It has the status of a “common law” in its own right b/o the scope of its regulation and the language in which it is expressed. It defines and set out – it constitutes – the most fundamental categories and concepts that provide the cadre of Quebec legal thought

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in one of its main branches, the private law, and this mode of thought extends even beyond the private law to permeate other fields of legal regulation.

(2) The Civil Code is droit commun in relation to other enactment b/c it is the fundamental reference point from which such other legislation proceeds. The structure of the Civil Code assumes a central importance, therefore, in its own continuing vocation as a droit commun.

- It is, unlike other encasements, an expression of droit commun b/c its scope includes a range of topics organized into a unified whole that appears to take on a life of its own and even though, conceivably, any one of its parts might be subtracted from it and thereby stand alone.

- The Civil Code is a statement of general, permanent and fundamental importance about the individual person as such in the law. But while the vocation of the Civil Code as the droit commun of private relation is, in these several ways, a primary one, it is not absolute. Other enactment can complement or derogate from the regimes of the Code.

- In current thinking, the symbolism and technique mesh well with the elevation of a range of “civil” or “private law rights” into a new dimension of fundamental public law.

- The Civil Code remains an expression of droit commun even though its provisions are not always imperative in character. Indeed a hallmark of the regulation found within the Civil Code is to provide for “suppletive” legal rules.

- The Civil Code, in itself an expression of droit commun in these various ways, may provide for the continuing incorporation of other expression of droit commun drawn from other normative systems, quite apart from those offered by its own history or by its own necessary supposition of implicit norms.

Conclusion: there is a multiplicity of droit commun in Quebec’s civil law. Droit commun is a term designating different realities, not a single idea. The idea of a “droit commun” is, after all, no more than a technique by which to acknowledge the existence of a particular set of “sources of law” – or, more correctly, a range of general norms – that are found to be commonly applicable in the event that no derogation to them has been made by another set of more specific norms. The expression of the droit commun may be contemporary or derive from a more remote time, may be explicitly articulated or only implicitly acknowledged, and may flow from a national system of law or derive from other points of reference. It must strive to be open rather than closed - a receptive rather than a narrow conception of law.

J.M. Brisson, “Le code civil, droit commun?” in P.A. Côté, ed., Le nouveau code civil: interprétation et application (Montreal: Thémis, 1992) at 292To what extent in contemporary law does the objective of a code to be a residual jus commune hold true?- Federal private law limits QC’s capacity for codification of private law.

Quebec jurisdictional power to make laws in the private realm was diminished by the fact that certain areas of law came under federal jurisdiction (federal private law), e.g. bankruptcy, marriage and divorce, intellectual property, Bills of Exchange Act, etc. (as compared with France that could codify all of its civil law).

- Does the code contain all law, or is this a myth?At its inception, the CCBC was seen as << un tout autonome>> and could be seen as <<la charte fondamentale du droit privé>>. CCBC now holds a secondary place.

- 3 types of legislation that undermine the notion that Code is jus commune : 1) Other QC statutes: Employment statutes, etc. Non-discrimination provisions (e.g. in

rental agreements). Many directly contradict the Code, debunking the notion that the Code is the foundation.Consumer Protection Act: Code tracks specific legislation & integrates it into its basic provisions. Ex: consumer K is ____. Ex: Interpretative rules (contra proferentum rule: “in all cases re consumer Ks, doubt is resolved in favour of consumer.”) When the laws were applied, much of the time civilian methodology of using general

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principles was not used. Ex: primacy of fault displaced in CSST & SAAQ regimes, contrary to fault-based X-K scheme.

2) Federal private law powers under CA (Interest which overlaps with private law under QC jurisdiction). Federal laws leave out certain details, which are meant to be filled with provincial laws [Ross example]. The suppletive nature of civil code makes it such that there is less an interaction between federal and civil law than a superposition of one law (federal) over another (civil). Serves more of a utilitarian function than a common, unifying law for Quebec. Ex: Bills of exchange act (Fed) says any promissory note must have valid consideration (CML sense). How do we take this in Civilian jurisdiction? Do we look to civil “equivalent” (cause)? QC CA split decision. Use civilian notion for that aspect? ([Ross] case about promise to pay 100K to McGill));

3) QCRF: Compare pre-QCRF case law (freedom of K included freedom to discriminate) to post-QCRF. Ex: Articles of Code reproduce articles of Charter (arts. 3, 10, 35, and others).

Jukier: it is a mistake to say that the Code is the inspiration of other legislations. - CCQ – Droit Commun Substantie

CCQ was created to fill gaps between CCBC and external law. Fundamental change was required it had to move from utility to substance.

- La modernization du droit civil fondamentalCODE LEGISLATIONExpresses

1) Ensemble of rules of law 2) Generally, 3) To a degree of abstraction, 4) In a permanent manner.

Should furnish a system with the <<armature>> to which particular laws can adhere and integrate.

Regulate in 1) Precise nature 2) Timely matters 3) That are susceptible to change.

- Necessary conditions for the continuation of a droit commun: 1) Harmony with the foundational system (treat it like other laws and modify as

necessary); 2) Take as much as possible from its intrinsic qualities when interpreting other laws.

THE ONLY WAY THAT THE CODE CAN EXERCISE A CONCEPTUAL FUNCTION IS TO CONTINUE TO OPERATE AS A DROIT COMMUN BY ENSURING HARMONY B/W PARTICULARE LAW & CONDAL PROVISIONS.

- The Code is no longer the droit commun of the private law. It is time to reconceptualize its purpose to reflect its capacity to contribute to law based on certain qualities:1) General and guiding principles2) Supposed to be congruent now with the Quebec Charter and other statute, such as

Comsumer Protection Act, etc.

CCQ CHANGED TO HARMONIZE W/ NEW STATUTES & LEGISLATION!

CLASS 3 Good Faith: The Concept of Good Faith Sept. 19

Art. 6, 7, 1375, 1379, 1401 (2), 1416, 1419, 2805 C.c.Q.6 – General Every person is bound to exercise his civil rights in good faith

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7 - General No right may be exercised with the intent of injuring another or in an excessive and unreasonable manner which is contrary to the requirements of good faith

1309 – Rules of Administration

(1)An administrator shall act with prudence and diligence(2)He shall also act honestly and faithfully in the best interest of the beneficiary or of the object pursued

1375 - Obligation The parties shall conduct themselves in good faith both at the time the obligation is created and at te time it is performed or extinguised

1401 1401 (section three: formation of contracts, consent, qualities and defects of consent)Error on the part of one party induced by fraud committed by the other party or with his knowledge vitiates consent whenever, but for that error, the party would not have contracted, or would have contracted on different terms (2) Fraud may result from silence or concealment.

1416 – Nature of nullity Any contract which does not meet the necessary conditions of its formation may be annulled.

1419 - A contract is relatively null where the condition of formation sanctioned by its nullity is necessary for the protection of an individual interest, such as where the consent of the parties or of one of them is vitiated.

2088 – K of Employment

(1)The Ee is bound not only to carry on his work with prudence and diligence, but also to act faithfully and honestly and not to use any confidential information he may obtain in carrying on or in the course of his work

2138 – Obligations Between Parties

(2) A mandatary is bound to fulfill the mandate he has accepted, and he shall act with prudence and diligence in performing it

Good Faith: Baudouin –p.109-115- There are three forms of good faith. The first two are more traditional forms and

have to do with “la disposition d’esprit dans laquelle se trouve une personne lorsqu’elle agit.” 1) Malicious intent2) Knowledge – “une personne est de mauvaise foi lorsqu’elle agit en sachant

qu’elle le fait de facon illégale ou illégitime.”3) Normal acceptable behaviour – this is a wider and more objective standard.

This is about the “éthique de comportement exigée en matière contractuelle.”

- there was no codal recognition of the obligation of good faith until 1994 (6,7, 1375)- French doctrine says you don’t need to say it explicitly, it goes without saying because it is understood- concept of abuse of right starts to change in the 1970’s in QC- 1971 case of Fiorito is the starting point of change in the judiciary, but Beetz’s 1981 SCC decision in

Soucisse is really where it all began

The CCQ & B-J (109-115)- For a long time, court only looked at if the contracting party used malice (intent of causing harm).

With no malice, parties could do as they wished notion of absolute right – no abusive right at all. - Courts then began to look at situations where there was no malice. The first case on this was decided in

1971: Fiorito. Courts confronted with situations where the behaviour in the argument of a contract was shocking, unacceptable to society.

- This obligation in contract to act in good faith is codified in 1375 CCQ: The parties shall conduct themselves in good faith both at the time the obligation is created and at the time it is performed or extinguished.”

- In the case of good faith in the negotiation of a contract, a violation of the rules of good faith at this stage can result in extra-contractual liability when no agreement is arrived at. This is important at the stage of advanced negotiations when the parties have begun to rely.

- No Quebec court has yet decided on this question but an obligation to bargain in good faith is known in labour law. “Ceci dit, il faut faire preuve de prudence dans la sanction d’une rupture de négociations: seule une conduite malicieuse ou clairement abusive qui entraîne des dommages devrait

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être sanctionnée.” Also, the negotiations should be at an advanced stage before these considerations quick in order to preserve the right to back out of discussions.

Good Faith at the SCC & French Law- Conditions for abuse of rights: The Good Faith test in [Houle]

a) maliceb) using a contractual right for a purpose other than what the parties had in mind when contractingc) asserting contractual right in an unreasonable manner (1457 CCQ test)

- Court made it clear that only conduct that is a marked departure from the generally accepted standards will be condemned – i.e. not socially acceptable with a clear deviation. Borderline cases should not make abuse of rights. The cases should be clear.

- After decades, good faith was recognized. French law had an influence but more at the beginning than the end (mentioned in the cases). Jurisprudence played important role – there was no article in the code. Court built from the bottom and added reasonableness to 1024 CCLC. From the time of codification, the law was clear on Good Faith – it was not dependent on jurisprudence. The law became certain and fixed as to where Good Faith was to be exercised.

*Today, good faith is such a basic, fundamental principle that it is at the same level as (1) autonomy of the will and (2) public order.

Specific Examples of Good Faith: Baudouin –p.138-142Good Faith in K of Employment- The duty of loyalty in a contract of employment has many manifestations:

employee cannot be dishonest, ruin employer’s reputation, attack employer’s private life, cannot profit from confidential information, or exercise concurrent activities as his employer (i.e. compete with employer).

- This obligation may continue for a reasonable period after the contract of employment ends. The extent of the obligation of loyalty varies depending, most notably, on the responsibilities assumed by the employee and his important in the crucial/central activities of the enterprise.

Good Faith in Cooperation- The duty of cooperation is, in some ways more demanding than the other

obligations of good faith since it “commande un comportement positif, plutôt qu’une simple abstention.” The existence of a duty of cooperation is based mainly on two factors:a) “la poursuite par les parties d’un but commun, montrant par là leur intention

de collaborerb) la fréquence des rapports entre les parties.”

B-J (138-142)- Because of this, we often find this obligation in contracts “à l’exécution successive.” This obligation

leaves room for each party to fulfill its individual goals but they cannot do so at the detriment of the other party. In some circumstances, this obligation requires that one party help the other even without acquiring an immediate gain from this action.

- One of the most well known correlates of duty to cooperate is the duty to disclose (l’obligation de renseignement). This usually exists in negotiation but can sometimes be found throughout the contract as in the case of Banque de Montréal v. Bail.

- The main types of contracts where the courts will find a duty to cooperate is in contracts of insurance where the insured has to cooperate with the insurer by declaring all risks. It is also found in the relationship between franchiser and franchisee (“existence d’une obligation de collaboration et d’assistance technique et commerciale”).

- It is up to the courts to determine the specific application and precise objective of this obligation is different contexts especially in contracts of successive execution or in the pursuit of common goals.

Case Law & Downside of Abuse of Rights:

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- Use of these principles means that we can rely less on the contract as written – interfering with sanctity of contract.

- Judges have power to modify the contract – dark side. Power of the judge as unwarranted intrusion in a contract created by the parties.

- Disturbance that the doctrine creates in the legitimate expectations of the parties. Exceptions to broad power to contract.

- Doctrine allows the judge to substitute his own notion of right and wrong to what the parties have decided is acceptable. Especially in the cases of negotiated contracts (the doctrine does not apply only to contracts of adhesion where one side does not determine the terms).

- Creates uncertainty.- What is acceptable to one judge is unacceptable to another judge – discretion power to judges leads to

differences in decisions especially around the marginal cases. Subjective assessment of fairness.

The expansion of the doctrine of abuse of rights needed to be stopped somewhere so the courts are trying to find limits…

The Law since these cases- There is the standard case of dismissal like Gignac where Er has reasonable belief for dismissal. Even

though this is later found wrong in law. And, further, the er proceeds in the usual way of dismissing an Ee. For example: Salary must be paid, Er must use discretion, etc. Gignac was dismissed like this. In

these cases, the sole measure of damages is the salary for the period that the court determines the Ee should have had.

- There are cases where dismissal is objectionable so moral damages can be given on the basis of such abuse of rights. For example:

a. Malice – vengeance, dismissal for sexual harassmentb. Where there is NO REASON WHATSOEVER – no reasonable ground for a reasonable

person to have dismissed. The burden is on the ee to show that the grounds the er used were bullshit. In Gignac, the Bank actually believed Gignac was incompetent.

c. Dismissal with er having unnecessary and damaging method – hurts reputation of ee when no discretion is used. This is abuse of rights because you have the right to terminate but you are using it in unnecessary way by causing prejudice.

- The development of the doctrine of Abuse of Rights has reached a plateau. Upholding basic standards of behaviour. There aren’t abuses of rights everywhere. The mere breach of an implied obligation is not an abuse of rights (Provigo). Not every breach of contract is an abuse of rights.

- As stated in Houle there must be a clear departure from generally admitted standards. The SCC was careful. We should rephrase the Houle decision to say that there is no justification for judge’s interference unless what was done is a clear deviation from generally admitted standards. The abuse must be shocking.

V. Karim, “La règle de bonne foi prévue dans l’article 1375 du Code civil du Québec: sa portée et les sanctions qui en découlent” (2000) 41 C. de D. 435

DUTY TO ADVICE

ADD OVERRIDES EXTEND – Pre-K/Formation DUDY TO COOP1981 1990 1992Soucisse Houle Bail: duty to inform

Aselford

1981 SCC: Soucisse v. Banque Nationale

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Facts: Dr. Groulx signed a suretyship for Maurice Robitaille for present and future loans. Clause said it would be “binding on my estate and all my heirs.” Groulx died in 1963 and Robitaille kept borrowing after his death. Heirs claim that they should not have to pay back the money borrowed after Groulx died because the bank failed to inform them of the suretyship and thus deprived them of the opportunity to revoke it if they had so desired. Trial judge said terms of contract are clear: non-intervention, autonomy of will, etc. means they have to pay.Issue: Did the bank commit a fault in not informing the heirs of the suretyship? If so, how does that affect their claim?Holding: Bank committed a fault in not informing of the suretyship. In so doing they made the suretyship essentially irrevocable, thus placing itself in a more favorable position than it had been during the surety’s lifetime. The idea of a fin de non recevoir applies in Quebec law and one of its manifestations is that you cannot profit from your own fault. So, the bank is not allowed to claim back the money that was borrowed after Groulx’ death because it is through their own fault in not informing the heirs of the suretyship that the debt was incurred.Ratio: Beetz, J: If it were necessary to do so, I would not hesitate to hold that, to the extent that it wished to make new

advances after the surety’s death, the bank was under an obligation as soon as it learned of the death itself to disclose to the heirs if the surety that the suretyships existed and were revocable

I would hold that this obligation results from the principle that agreements must be performed in good faith […] the principle is axiomatic and agreements must be performed in good faith […] (citing Domat) There is no species of agreement in which it is not implied that one party owed good faith to the other party, with all the consequences which equity may demand, in the manner of stating the agreement as well as in the performance of what is agreed upon and all that follows therefrom

In any event, once the bank informed the estate of some of the obligations of the suretyship, it assumed a duty to do this completely, because partial information is misleading information. The Bank cannot simply disclose what is to its advantage and withhold what is in its interest to withhold.

By failing to disclose the suretyship the bank committed a fault and is therefore barred from benefiting from that fault. Fin de non recevoir can be based on the idea that a party cannot benefit from his wrongful conduct. Fin de non recevoir does not extinguish the debt, but makes it ineffective by precluding the creditor from bringing the action to which it gives rise.

Interestingly, Beetz never actually modifies the written text of the contract, rather he bases himself on 1024 CCLC now 1434 CCQ that says that obligations are not just what were written but what was intended. Good faith is an implied obligation and includes the duty to inform of the suretyship after Groulx’s death. Since the heir has to choose to accept or refuse the succession, they must be able to make an informed decision. Therefore, he doesn’t really erode the autonomy of the will, just acts as though that obligation was implicit in the contract.

DISCUSSION: The most important case which begins to recognize good faith in Quebec was the 1981 decision of Soucise. This case deals with a contract of suretyship. Under this contract the bank has the right to call on this suretyship even after the death of the surety. The new CCQ enacted an article 2361 that says:

2361: Notwithstanding any contrary provision, the death of the surety terminates the suretyship.= so looks like we can thank the Banque Nationale for a few codal provisions.

The trial judge is very sympathetic to the defendants, but we are living under a concept of absolute rights and autonomy of the will.

Beetz says that the bank is estopped from exercising its rights. If this is not in the Code where does the Court base this decision. CCLC 1024 and now 1434 (look also at 1375).

CCLC 1024: The obligation of a contract extends not only to what is expressed in it, but also to all the consequences which, by equity, usage or law, are incident to the contract, according to its nature.

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CCQ 1434: A contract validly formed binds the parties who have entered into it not only as to what they have expressed in it but also as to what is incident to it according to its nature and in conformity with usage, equity or law.

The juridical basis of this new obligation of good faith was an implied obligation of the party’s contract. This duty of good faith is generic which we see in case after case starts manifesting itself in different manners. In this case the duty of good faith puts the bank in the obligation to inform the heirs of the suretyship so they know how to act.

Mr. Beetz J. never modifies the content of the contract. He could not do this because the civil law is very much based upon the notion of autonomy of the will because this would destroy the foundation of the contract. The concept of the heir is that the heir steps into the rights and obligations of the deceased. But in this case the heirs have to choose whether to assume or not these obligations. What is clever is that Beetz merely adds an obligation to the contract. There is the notion of pact sunt servanda but he can add another obligation. It does not change the contract but added and implied obligation, thereby he is not destroying the will of the parties. This is not your classic implied obligation, in both the CoL and CiL law you can imply obligation that if you would of asked the parties the parties would have said yes. This asks the question whether you are implying an obligation or whether you are imposing it?

Good faith is taken one step further in Houle: notion of abuse of right, and that lack of good faith does not mean bad faith, but a lack of reasonable exercise of a right

Houle v. Banque Canadienne Nationale, [1990] 3 S.C.R. 122 [Background reading]Supreme Court of Canada from Quebec November 22, 1990Present: Lamer C.J. and Wilson, La Forest, L'Heureux-Dubé, Sopinka, Gonthier and Cory JJ. Facts: Appellant Bank had done business with the respondents' family and their company for 50 years. Pursuant to an expansion plan, the company obtained a rotating line of credit and a letter of credit totalling $800,000 from the appellant. The respondents personally guaranteed the loans and the Bank also obtained a trust deed on all the movable and immovable assets of the company. Subsequently, the respondents commenced negotiations to sell their shares in the company to an interested party for $1,000,000. The Bank was aware of the negotiations and decided to call in the loan and realize on the guarantees. The respondents were informed and the Bank quickly took possession of the company's assets and liquidated them in less than three hours. A few weeks later the respondents sold their shares to the prospective buyer for only $300,000. They then took action against the Bank for $700,000 which they alleged to have lost due to the Bank's abusive conduct in the sudden possession and liquidation of the company's assets. The Court awarded damages in the sum of $250,000 and the decision was affirmed on appeal. The respondents later filed motion seeking additional indemnity pursuant to art. 1056c of the Civil Code of Lower Canada. Held: Appeal dismissed; additional indemnity awarded. “I want to stress at the outset that this case is concerned only with the abuse of contractual

rights inasmuch as such abuse causes damages to third parties, that is persons who are not parties to the alleged contract.”

Abuse of right in Quebec first gained acceptance in property law and also gained doctrinal and jurisprudential support in Admin law. “The doctrine of abuse of contractual rights is alive and undisputed in France.”

Despite acceptance in Quebec doctrine, early Quebec jurisprudence was hostile to the idea that k’al rights could be abused, but it has slowly made inroads into QC jurisprudence. Turning point was Fiorito [1971], at which juncture the recourse became more widely used.

“The doctrine of abuse of contractual rights is consistent with the fundamental principles of Quebec Civil Law where good faith and reasonableness permeate the theories or rights and obligations, contractual as well as extra-contractual. It is also consistent with the general philosophy that the debtor is to be favored in contractual relationships.”

It is a necessary control over the exercise of contractual rights

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Explicit recognition of the erosion of the absolutist “intent of the parties is supreme” idea: “it inserts itself into today’s trend towards a just and fair approach to rights and obligations (I,e, consumer protection legislation, etc.

“Such uncertainty which the doctrine of abuse of rights may bring to contractual relationships, besides being worth that price, may be counterbalanced by the presumption of good faith which remains basic in contractual relationships. Courts have so far demonstrated, in applying the doctrine, that they will only sanction marked departures from the general norm of behavior acceptable in ours society.”

The abuse of right is to contractual relationships what fault is to extra-contractual relationships. (yes, but is fault necessarily a marked departure? I don’t think so…)

An question as to whether good faith is here to stay is now answered by L’H-D: “If this doctrine were not already part of Quebec Law, there should be no hesitation to adopt it.” (CB 83).

The appropriate standard for abuse of right the “reasonable exercise of right” theory which holds that an abuse of right occurs when the right is not exercised in a reasonable manner or in a manner consistent with the conduct of a prudent and diligent individual. This accords with the concept of the “bon père de famille” that is well known to Quebec Law.

There can no longer be a debate in Quebec law that the less stringent standard of the reasonable exercise of the right, the conduct of the reasonable and prudent individual, as opposed to the more stringent standard of malice and the absence of good faith, can ground liability resulting from an abuse of contractual rights.

In terms or liability if the abuse of right is to give rise to a contractual liability, the only the parties to the contract may claim for the breach of that contractual obligation. Third parties are excluded from any such claim.

At a general level, it is indisputable that an implicit obligation of good faith exists is every contract in Quebec civil law. The proper approach is to ask : were rights exercised in a spirit of fair play? If this implicit obligation is breached, contractual liability is engaged with regards to the other contracting party.

However, the existence of a contract between the parties does not shield to parties from their x-k liability towards each other, or to third parties. IN order to find x-k liability between the parties themselves, there must exist a legal obligation deriving from 1053 (1457) which exists independently of the K and would apply generally. For example, failure to warn of dangers of goods can give rise to x-k liability so long as the fault alleged is independent of the contract and would have existed even in the absence of a contract. The same holds for third parties: there must be a legal obligation between the party to the K and the third party that exists independently of the contract in order to find x-k liability.

In this case, the abuse of the contractual right could not give rise to liability to the shareholders. Instead, it comes from the general legal obligation not to prejudice the parties to a sale, when you have knowledge that the sale is imminent. Thus, the bank had a duty to act in a prudent and diligent manner so as to avoid prejudicing the shareholders in the sale they knew was imminent. No obligation of diligence towards the shareholders arose form the contract itself. The obligation to the shareholders was independent of the contractual undertaking between the bank and the company.

*** Interestingly, at the time L’H-D wrote Houle (1990) the code was in the process of being revised. In support if the idea that the principle of good faith has come to override autonomy of the will she noted several examples such as the Consumer Protection Act, etc. and also mentions the a provision dealing with “lesion between persons of full age” in the proposed reforms to the Civil Code: the CCQ only deals with persons of full age under protective supervision: maybe the reformers wanted to give a wider scope to lesion, but it didn’t make it into the final draft – so, at the time she was writing, maybe she was anticipating changes that are much wider than what actually happened. Notes: - In Houle (1990) it takes the duty of good faith one step further. As opposed to Soucise, in

the present case, the bank had a right under the contract that it could call a loan without notice. The court says that we will not let you exercise this right. This is going a step further

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than Soucise. A Company has been negotiating its sale and the bank decided to recall its loan and to liquidate its assets in a matter of hours. As a result the corporation suffered great losses and shareholders sued. The importance of Houle —the doctrine of abuse of rights is part of the civil law in Quebec.

- What is the standard of this good faith? It is important not to equate it to bad faith. Bad faith entails malice. Good faith can entail malice but it need not entail malice (objective concept of good faith). Good faith means that you have to act reasonable. The standard in Houle is one of reasonableness and not malice. L’heureux-Dube J. it is implied in every contract and it carries the obligation to act prudently. Instead of adding an obligation, it modifies the rights in the k.

Aselford Martin Shopping Centres v. A.L. Raymond, [1990] R.J.Q. 1971 (C.S.) Aselford says the essentially the same thing as L’H-D in HouleFacts: Raymond sold a shopping centre to Aselford. Aselford was to make monthly payments in order to pay the balance of the sale price. A clause in the contract said that even if Aselford was not in default, Raymond could arrange to have the rents from the tenants paid directly to Raymond. Aselford applied to the Court to see if it could kick out one of the tenants who had a huge space in the mall but wasn’t paying very much rent. Raymond claimed that this constituted default because it threatened its security interest to remove such a substantial tenant. Aselford then desisted in that proceeding, but Raymond continued to collect the rents. Raymond claims that Aselford was in default, and even if they weren’t the contract allowed them to collect the rents anyway.Issue: Can Raymond exercise its right to collect the rents from Aselford’s tenants even if Aselford is not in default on the loan payments?Holding: No. This is an abuse of right. The exercise of the right as stipulated in the clause violated the principles of fair play in 1024, (now 1434).Ratio: The right of the creditor to collect the rents owed to the debtor is in principle only exercisable when the debtor is in default, or if the debtor deteriorates or administers badly the hypothecated immovable, thereby diminishing the creditor’s security. Even if the declaratory action of Aselford constituted bad administration, that action was abandoned. Once an action is abandoned, things return to their previous state, as though the action had never been instituted. Thus, there is no question of Aselford being in default or jeopardizing the security of Raymond. The question then is whether the collection of the rents can take place in the absence of default. The answer is no. Even if freedom of contract is absolute in the Civil code, it is nonetheless subject to certain fundamental principles. In the interpretation of every contract, we must keep the principle of “equité” in mind (1024, not 1434). This is an integral part of all contracts in our law, and it exists despite the idea of autonomy of the will to allow the judge a discretionary power to correct the consequences of the most grave contractual inequities. The clause that gave the to transfer the rents in the absence of default is abusive, arbitrary and a violation of the fundamental principles of “équité”. note that the judge has to ground it in 1024 CCLC principles of equity, because this is 1990

and the good faith provisions didn’t exist yet. This case seems to almost bring good faith to a status of public order, the judge says that it’s

not just the abusive exercise of the right but the clause itself is abusive, seems to be saying that you can’t contract out of good faith

Basically, Houle and Aselford tell us that equity exists despite autonomy of the will: is this overrides the parties’ will, then too bad. It’s worth it, and we have to have faith in the judiciary that it will only be used in appropriate circumstances.

Discussion- A court will not allow a party to act in a certain manner when it will be against good faith.- If you have an immovable property and has lessees you have to put an assignment of rents clause that

allows you to pay the rent directly to you. It is a perfectly legitimate clause which is triggered by default of the debtor.

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- Was there a default in this case? The court later said that there was no default. Therefore the explicit clause in the assignment of rents gives the right to use it even in absence of default.

- The court says that you cannot exercise a right contrary to good faith. If it is abusive or arbitrary and violate the rules of equity you cannot exercise the right. This is a continuation of Houle.

- How can we override the obligations of the parties? In Houle there is a dissent that says if you give judgment for one of the parties you will undermine of the basic tenets of contract. In essence it would be an alteration of the contract which would violate autonomy of the will. Aselford answers in other words that it does not care.

- HD in Houle says that it is without doubt and encroachment into the will of the parties.- If Aselford was decided in 2002, what would happen?

- Art. 1379 – adhesive k- Art. 1437 – abusive right- Art. 1375 – good faith

Along comes the final case in what is called the trilogy of good faith cases – Bail. How does this case take it one step further?

Bank of Montreal v. Bail [1992] Gonthier,J.Facts: Hydro Quebec accepted tenders for a project. The tenderers based their bid on information supplied by Hydro Quebec. Hydro Quebec knew that there were errors in that information and never disclosed it. Hydro-Quebec knew its design was erroneous, and refused to admit the error in order to induce the contractor and sub-contractor to complete the work without having to renegotiate. The bank, who is now the receiver in bankruptcy of the sub-contractor whose business was ruined, was allowed to rely on the failure of the obligation to inform because Hydro Quebec had a duty to act reasonably towards sub-contractors, particularly when it is a matter of informing them of errors in tender documents. Contractors commonly use sub-contractors in such large projects. Thus, the obligation to inform benefits the contractor and the subcontractor.Ratio: Obligation to Inform in Quebec Law “The obligation to inform is now well-established in Quebec Law” I believe it is possible to outline a general theory of the obligation to inform, based on the duty of good

faith in the realm of contracts. The main elements of the obligation to inform are the following:

1) Actual or presumed knowledge of the information on the part of the party which owes the obligation to inform

2) The information in question is of decisive importance3) It is impossible for the party to whom the obligation is owed to inform itself, or the creditor is

legitimately relying on the debtor of the obligation the advent of this obligation relates to a certain shift that has been taking place in the civil law: we are

now more attentive to inequalities in terms of information, and are imposing positive obligations where one party is in a vulnerable position with regard to information, from which damage may result

the obligation to inform and the duty not to give false information are two sides of the same coin However, the obligation to inform must not be construed so broadly as to obviate the fundamental

obligation which rests on every one to self-inform and take care in conducting one’s affairs. Moreover, this must not be confused with the obligation to counsel or advise.

This case deals with a contractual duty to inform, although such a duty may arise in other circumstances

NOTES: - So, obligation to inform is a subset of overarching concept of good faith, and it extends to the pre-K

sphere- But, in this case although the contractual duty to inform is the key point, the fact is that the Bank’s

action is based on x-k responsibility because there was no K between Hydro Quebec and the sub-K’or. The question is not whether there was K’al fault, although it is a juridical fact that can aid in the assessment of delictual fault. The Q is whether Hydro Quebec acted reasonably towards the third party, the subcontractor. In this situation, Hydro Quebec committed an x-k fault by creating a fact situation which it could easily have foreseen would cause damage to the sub-contractor.

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- Where does it say that this doctrine applies - with respect to third parties?- Where is the breach of the obligation of good faith in Soucise? In the extinction of the obligation.- In Bail the obligation of good faith extends into the formation of the contract.

-This translates into an obligation to inform. Gone are the days of caveat emptor (buyer beware). -Gonthier says that if one of the parties in the pre-contractual stage has knowledge, and is important, and it is impossible for the other party to get that knowledge, and the other party is in reliance.-You better spit out that knowledge or you will be found to be in violation of that obligation.

We see these three decisions that in a period of 11 years extends the notion of good faith and extends into all aspects.

Remember Martel (2000) in which a lease was being negotiated between a lessee and a branch of the government. The lessor dangled the lessee along and the latter did everything to try to win the lease and finally the lease was not awarded to the lessee. The SCC in this case said there was no obligation of good faith in the common law.

State of the Law Post-Trilogy- Where does the law stand post this trilogy? - The first thing to now is that the CCQ which come into force in Jan 1, 1994 is tremendously influenced

by these decisions and we can remember that the tradition of the civil law is that it is supposed to provide a guide to future behaviour.

- Here is an example where the Code is influenced by the jurisprudence and the Code reflects the developments of the jurisprudence. This contradicts the notion that civil law judges do not make law.

- The new Code contains a number of important provisions: CCQ 6, 7 these articles pick up that good faith is reasonableness. There is also art. 1375, which picks up on the jurisprudence. We also have 1434 (CCLC 1024). The other articles that we will look at are CCQ arts. 1416/1419/1401(2).

- Conclusions?1) The CCQ is tremendously influenced by case law with respect to the GOOD FAITH.2) These articles are enacted in the Code3) There is jurisprudence that is developing the doctrine. There are no countless articles on good

faith.

We now have a proliferation of doctrine and jurisprudence in this area. The doctrine is now being extended to all kinds of situations. Some would say that good faith is a principle of public order. Therefore you cannot contract around public order provisions.

Subaru Auto Canada v. Caravane et Auto du Cap J.E. 96-754 (C.A.)Quebec obligations — Breach of obligations — What constitutes breach — Remedies — Extinction of obligations — Notice requirement. An example of where the abuse of right argument didn’t fly:Facts: Caravane had a contract to sell Subaru cars. The agreement was renewable on an annual basis, subject to the right of Subaru to cancel it, by written notice, by October 1 st if they did not want to renew it for the upcoming year. Caravane knew that Subaru was planning to cancel on September 30, but did not get the written notice until October 3. So, Caravane sued for damages.Issue: Is strict adherence to the formal requirement of a written notice by October 1 st an abuse of right?Holding: No. This is a formal requirement of the contract, intimately related to the right to resiliate the contract. The parties wanted their business to be conducted in writing, and it is in light of this will of the parties that the clauses must be interpreted.Ratio: “Les tribunaux doivent se mettre en garde contre des interventions tous azimuts.” Chamberlain, J.A. reiterates L’H-D in Houle saying that judges have applied this only to sanction

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marked departures , “écarts marqués”. In this case, it is not unreasonable to insist on written notice before October 1. Caravane had a serious and legitimate interest in insisting that Subaru give it written notice, it has not exercised this right with the intent to injure or in an excessive or unreasonable manner. Chamberlain emphasizes stability and predictability in contractual relations. He also notes that Subaru had decided to resiliate the contract at least 30 days prior to the deadline, so they had all the time they needed to send the notice and thus have only themselves to blame. NOTES: Once again, I think there is a bit of a contradiction here. Marked departure from the standard

of reasonableness, and simple unreasonableness are not the same thing. In criminal law, this is the basis for the distinction between civil and criminal negligence.

Subaru—there are still decisions that go against good faith. In this case the court does not find there was a lack of good faith. It brings into account the issue of notices. In this case it was said that notice must be received by Oct 1, but the Subaru dealer gets it on Oct 3. Subaru knew on Sept 30. The Subaru dealer stands firm and says that they did not receive notice on the date stipulated, therefore the k cannot be rescinded. It is usually the stronger party that insists on the strict legal rights. Therefore the good faith provision gives courts a lot of leeway. In Subaru it is actually the little guy insisting on strict legal rights. The court does agree with the dealership. Therefore sticking to the strict legal rights does not always contradict good faith.

What remedies does good faith provide? - There are certain uncontroversial remedies, but there are some which are controversial. What is the

remedy that is given in Soucise, they do not hold the heirs responsible for everything since the time when they should have given the notice. The bank is estopped. This is a very passive remedy.

- In Houle, contractual damages have been awarded. The bank breached its contractual obligations and will therefore be found liable.

- Would the remedy be nullity? Unresolved question in contemporary Quebec civil law. Nullity applies to the defects of consent for error, lesion, fear.

- Article 1399: doesn’t say consent can be vitiated by a lack of good faith. - Article 1375: doesn’t give a remedy =>Need 2nd paragraph?- Not usually remedied by damages. Remedied by the nullity of the k. If something happens in pre-

formation of k, that caused the parties to enter the k defectively, we have nullity. Poorly formed contract = nullity.

- There’s a hole because 1375 doesn’t give a remedy. 1399 doesn’t take into account good faith. 1405 doesn’t take into account good faith.

- Is this fraud? Or is it something else?- Baudouin + Jobin on pre-contractual obligation to inform: the foundation of the pre-

contractual obligation of information is 1401(2) – fraud by reticence. So it is fraud. Fraud is now increasing its ambit yet again (being influenced by good faith). In most situations, this is the case – there is overlap in breach of obligation to inform and fraud by reticence. The remedy for a breach of the pre-contractual duty of information is the remedy for fraud. 1375 has brought into Quebec civil law a new contractual morality with an effect on the definition of fraud by reticence/concealment. Every pre-contractual breach of 1375 can fit itself in with a defect of consent.

- The alternative view on good faith in the pre-contractual sphere is put forward by Vincent Karim, Brigitte Lefebvre. The obligation to inform is not always a dol. It doesn’t always fulfil all the conditions

because the dol necessitates voluntary acts and an intentional element that looks like bad faith. While there is an overlap, it is not in every case that the abstention from sharing of information that is a breach of 1375 is always going to be a 1401(2). There is a subtle difference between 1401(2) and 1375 – fraud requires an intentional bad faith element. The law of fraud in civil law has not grown like misrepresentation in common law. Lack of information that ought to be shared might not amount to fraud.

Article 1416 CCQ is the solution. “Any contract which does not meet the necessary conditions of its formation may be annulled”. Meant to cover gifts not in notarial form,

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things not in writing, hypothecs not in proper form, k’s that had language, formal, writing requirements that weren’t fulfilled. It does not actually say formal conditions – it says necessary conditions. Therefore, 1375 is now a necessary condition for the formation of contract. Now 1375 is an autonomous remedy with its own sanction.

CLASS 4 Good Faith (Continued): Obligation to Inform and to Advise Sept. 26

Art. 6, 7, 1375, 1401 (2), 1416, 1419, 2805 C.c.Q.

P. le Tourneau & L. Cadiet, Droit de la responsabilité (Paris: Dalloz, 1998) at 462-6L’obligation de renseignementDefinition: - l’obligation d’information permettant au créancier d’éviter de subir un dommage à sa

personne ou à ses biens. Le débiteur de cette obligation est le plus souvent un professionnel, mais l’obligation d’information existe aussi dans les contrats conclus entre non professionnels.

If the duty to inform exists b/w non-professional, such as vendor in k of sale, then “l’obligation d’information se limite alors à la communication des seules informations détenues par celui qui en est débiteur, cette détention devant être prouvée par le créancier de l’information.”

If the duty to inform exists b/w professional and layman, then “le débiteur est tenu de communiquer à l’autre partie les informations relatives à l’objet du contrat; peu importe à cet égard qu’elles soient ou non en sa possession: sa qualification professionnelle lui impose de connaître les données nécessaires à son contractant (information technique et, de plus en plus, information juridique)”.

- L’information est due par le professionnel au profit d’un cocontractant profane; mais elle peut aussi bénéficier au contractant également professionnel, dans l’hypothèse où la compétence de ce dernier ne lui donne pas les moyens d’apprécier la portée exacte des caractéristiques de l’objet du contrat.

- There are different obligations: l’obligation d’information; l’obligation de renseignement; l’obligation de conseil =: mais il n’y a là que l’expression de degrés différents dans l’information imposée.

- En toute hypothèse, il s’agit d’une obligation accessoire de nature contractuelle, dont la violation met en jeu le régime de la défaillance contractuelle de son débiteur, dans le mesure ou une relation contractuelle existe bien entre les parites, ce qui n’est pas toujours le cas. Il est possible d’y voir, en vérité, une application du devoir plus général de collaboration entre les parties découlant de la bonne foi devant dominer les rapports contractuels.

Distinction: - cette obligation doit être distinguée de la fourniture de renseignements sur autru. Celle-ci

peut être l’accessoire d’une obligation principale, ou faire l’objet d’un contrat particulier. L’obligation d’informationDéfinition: - par l’obligation d’information, le contractant prévient son cocontractant des risques et

avantages de telle mesure ou acte envisagé; il l’éclaire afin que son choix soit effectué en pleine connaissance de cause.

- Cette obligation est, en principe, une obligation de résultat: fournir l’information, et non pas faire son possible à cet effet.

- Il aurait cependant été possible d’adopter un régime diversifié, selon la nature de l’obligation principale, le genre d’information à donner, et le rôle que peut jouer ici le cocontractant.

Application: - Le médecin- L’architecte et l’entrepreneur

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- Tout intermédiaire financier à titre professionnel, principalement le gérant de portefeuille, le banquier, la société de bourse

- Les intermédiaire dans les assurance: agents généraux, courtiers et mandataires.- Le fabricant, l’entrepreneur et le vendeur. - L’organisateur d’une compétition sportiveAménagement: information réciproque- dans maints contrats, l’information est réciproque. L’acheteur d’un appareil, le maître de

l’ouvrage à construire, et d’autre encore, doivent préciser, dans leur appel d’offres ou lors des pourparlers, les caractères, qualités, performances qu’ils attendent, leurs besoins et leur objectifs à atteindre.

- Et parfoi, il arrive d’ailleurs ce devoire de s’informer mutuellements subsiste durant toute la vie contractuelle, en vertu d’une clause expresse ou tacite, cette obligation étant inhérente à telle espère de contrat. I.e. les contrats de franchisage.

- Limites: l’existence de cette réciprocité dans l’information risque d’inciter des contractants de mauvaise foi à toujours invoquer la défailance de leur partenaire.

Extension: le devoir du débiteur de se renseigner. - Pour informer autrui, encore faut-il être informé personnellement. Le débiteur de l’information

a donc l’obligation de se renseigner lui-même.- L’information peut être recherchée auprès de son contractant. Mais le plus souvant,

l’information doit recherchée auprès de tiers, dès lors que cette recherche préalable est nécessaire, et demeure dans des limites raisonnables.

Extension: le devoir du créancier de se renseigner- La jurisprudence prend en considération les compétences respectives des parties. En outre,

il lui arrive de faire peser un devoir de se renseigner sur le créancier lui-même de l’information dont l’ignorance, face à son cocontractant, ne deviendra précisément légitime qu’à cette condition.

- Il appartient au créancier de prendre connaissance lui-même des caractéristiques de la chose et, en tant que de besoin, d’interroger le professionnel pour obtenir des information.

- Limites: Le droit de se taire. Obligation légales- Parfois, l’obligation d’information, accessoire d’une obligation principale, est prévue par la loi.

I.e. le Code de la consommation; le domaine des assurances.

English translation: - duty to inform, advise, warn: these are just expressions of different degrees of information that must be

conveyed, they are more questions or degree of the duty rather than different types of duties – the distinction is more intellectual than practical

- it is possible in this to see a more general duty to co-operate between the parties which stems from the notion of good faith that dominates contractual dealings

- goal is to make sure that the choice of the other party will be enlightened, but that is the end of it: he does not have to come out in favor of one option or another. It’s an obligation of result: provide the information.

- this obligation has been recognized in a number of contracts: doctor-patient, architect, banker, etc. (In Quebec, Gonthier is Bail says that it can apply to any contract that fits the three criteria set out in the Bail decision)

- obligation to inform can often be mutual, and it can also subsist throughout the contract- when there is an obligation to inform, this implies an obligation on the debtor to get the information he

is supposed to provide. It is not an excuse to say that you didn’t know that information which you are supposed to provide

- there is also still a duty to self-inform on the creditor of the obligatio- in the medical context, there is also sometimes the right to remain silent: the medical professional must

only inform of habitual risks, and not of exceptional ones, except in cases of purely aesthetic surgery. The authors note the irony of this because it is the exceptional risks that the patient will most likely not be able to know about on their own. The reason is one of policy: you don’t want to scare people away from treatment.

- Moreover, the obligation on the vendor of technical equipment has the obligation to inform the buyer

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about the equipment he is selling, not about the existence of other products on the market.

Régie d’assainissement des eaux du basin de La Prairie v. Janin Construction (1983) Ltée, [1999] R.J.Q. 929 (C.A.) Duty to inform = duty to get necessary information to informFACTS: a “contrat à forfait relatif” entered into b/w Régie and Janin. Before preparing the k, Régie asked some relevant companies, such as Fondatec Inc., to work for them. Janin, when preparing its “soumission”, also consulted an “expert en excavation de tunnels et le géologue Fojanesi” and “pour l’exécution des travaux, il avait engagé un ingénieur spécialisé en géo-technique”. In the k, there is an exclusion clause, in which Régie was excluded any liabilities due to the information they provided in k. However, b/o the condition of the soil, the work was delayed. Janin brought an action for the damage it suffered and its extra expenses due to the wrongful information in the k. ISSUE: Ought there be a duty to inform in the party of Régie? Could Régie use the exclusion clause to get out of his duty to inform? HELD: yes, there should be a duty to inform in the party of Régie. Even though Régie is not expert/professional, its position make it have the duty to inform or get information to inform the co-contractor. NOTES: - In Bail, Gonthier set up three elements to the duty to inform.

1) Knowledge of the information, whether actual or presumed, by the party which owes the obligation to inform;

2) The fact that the information in question is of decisive importance;3) The fact that it is impossible for the party to whom the duty to inform is owed to inform

itself, or that the creditor is legitimately relying on the debtor of the obligation. - In this case, the judge goes further to hold that b/o the position of Régie who prepared the

tender, he should owe the duty to inform to Janin, as a contractor. Even thought, Régie didn’t know the condition of the soil too.

- The court characterized the k as an adhesion k based on the fact that the k was not negotiable b/w the k parties (art.1379), no matter if there is unequal bargaining power b/w the parties. Then according to art.1437, the exclusion clause in k could be declared null as an abusive clause. The court stated that

“Les tribunaux, inspirés par la doctrine, ont longtemps vu dans cette notion d’adhésion non pas un acte juridique de nature particulière, mais le rappel de la nécessaire protection, dans certains contrats, de la parties la plus faible”.

“Peu à peu, on a substitué à la description traditionnelle du contrat d’adhésion, qui mettait essentiellement en lumière le déséquilibre des contractants, une définition qui permet d’appliquer le contrat d’adhésion aussi bien aux situations où ce déséquilibre existe qu’à celles qui mettent en cause des relations économiques entre partenaires de force comparable”.

- Was the crt here correct? Is there other ways to deal with it?- Defect consent; - Public order, art. 9- Can we argue that 1375 is public order?

-“notwithstanding”;-art.6, 7 -doctrinal support from karim.

DISCUSSION: - in this case, there was a K of adhesion between the Régie and Janin- in that K, there was a clause excluding liability for any mis-information- the case is decided under 1437, which says that abusive clauses in contracts of adhesion can be struck

out or the obligations resulting therefrom reduced- So, the question is whether the court would have held the same if it hadn’t been a K of adhesions

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-I think that certainly the K of adhesion made the Court’s job easier, and that they were acting prudently in only deciding what was necessary on the facts before them-although you can never know for sure, I think if the you follow what happened in Aselford it shouldn’t matter that there was a K of adhesion. Aselford practically gave good faith the status of public order and said that a clause that was so contrary to the principles of then “equité” under 1024, but now 1434 and good faith under 1375. Thus, you can’t contract out of it. But, that case was pre-CCQ and was only a Superior Court decision. But the court was being prudent so the true test case to affirm this principle is still out there.

- according to Gonthier’s decision in Bail the duty to inform is base don a recognition of an inequality of information power and to recalibrate the balance between the parties

- but Jukier says that is not really what Janin is all about: here we have the Government who wants to install a sewer system and Janin, a sophisticated contractor with expertise

- but, eventhough the Regie is not an expert, and there is no inequality on bargaining power, the regie had an obligation to get information from third parties, which it did, and Janin was entitled to rely on that information

- Janin tried to say exclude its liability for any inaccuracy in the information provided in the invitation for tenders, but cases like Bail recognize a duty of information in this type of situation

- So, they were not allowed to exclude it, but the decision was grounded in articles dealing with K of adhesion, and it remains to be seen if it would extend generally.

Obligation d’information à la formation du contrat: Baudouin –p.261- l’obligation d’une partie de fournir à l’autre les information nécessaires à un

consentement pleinement éclairé est reconnue depuis assez longtemps dans certains domaines, i.e. contrat de soins médicauxé. Par le dol par réticence et surtout le dol par le silence, la jurisprudence, sous l’empire du Code du Bas-Canada imposait une obligation d’information à l’une des parties quand l’autre, dans les circonstances, plaçait en elle sa confiance relativement à des faits déterminants.

- Peu de temps avant l’entrée en vigueur du nouveau code, la Cour suprême est venue consolider cette tendance et faire de l’obligation d’information, à certaines conditions, une obligation générale; l’existence de cette obligation a été reconnue à la formation du contrat et en cours de contrat (Bail).

- L’obligation précontractuelle d’information se fonde donc, soit sur les articles 6 et 1375, soit, plus précisément, sur l’article 1401.

L’obligation de se renseigner: Baudouin –p. 270- l’obligation de se renseigner est au fond la limite imposée à l’obligation de

renseignement, l’envers de la médaille. Dans la mesure, en effet, où, d’une façon générale, le contractant a la possibilité de connaître l’information ou d’y avoir accès, l’obligation de se renseigner vient faire échec au devoir corrélatif de renseignement de l’autre partie.

- Dans l’obligation d’information, le droit entend protéger la contractant contre une inégalité situationnelle, mais non contre sa propre sottise (foolishness) ou négligence.

- Aussi la Cour suprême a-t-elle pris la précaution de situer l’obligation d’information dans le contexte général où toute personne a le devoir de se renseigner raisonnablement avant de conclure un contrat (Bail).

Bolduc v. Decelles, [1996] R.J.Q. 805 (C.Q.)Duty to inform in pre-contractual stage is a general duty, which comes from 1399 C.c.QFACTS: Decelles, as a financial agent, sell the “placement-plus” to plts., who thought it was REER collectif or REER conventionnel. Decelles did not tell the plts. the difference b/w these two financial products. Actually, these two products have different characteristics. The plts. then

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brought an action to annul the k on the basis that Decelles failed to fulfill his duty to inform and the k entered into without the plts.’ free and enlightened consent. ISSUE: On what basis the k could be held null?Holding: Contract is void. - One, for error as to the nature of the contract (1400CCQ) - Moreover, for lack of free and enlightened consent as per 1399 CCQ because Mr. Descelles

did not tell them about his 40% commission, and for failure to fulfill the obligation to inform that finds its source in the general obligation of good faith under 1375 CCQ.

- “l’obligation de renseigner tire sa source dans l’obligation général de bonne foi que consacre d’ailleurs l’article 1375. L’ommission de renseigner a en effet provoqué l’erreur des demandeurs en ce qu’ils ont confondu une police Placement-plus et un REER”. Il s’agit manifestement d’une erreur portant sur la nature même du contrat qui touche au consentement, de sorte que les contrats n’ont pu naître véritablement. La doctrine et la jurisprudence reconnaissent qu’il n’importe pas que l’erreur soit connue du cocontractant. Par ailleurs, on ne peut pas dire l’erreur soit inexcusable.

- Due to the complexity of the contracts and the information under Descelles’ control, the error was not inexcusable. Moreover, the fact that they did not read what they were signing cannot be used against them because for one, they had placed full confidence in Descelles, and for two, the convoluted wording of the documents only discouraged them from so doing.

Ratio: Descelles is obviously a very knowledgeable and able sales person when it comes to

instruments of financial planning. He should be considered as a professional in an area that is by and large cryptic for the average consumer. In this light, he has to use his competence first and foremost for the service of the consumer. He has an obligation to be transparent when he undertakes to help people to choose from amongst the product he is offering.

He did not fulfill his duty to inform and did not offer proof of the transparence that is required of him. He did not explain the difference between what he sold to the claimants and the traditional RRSP. He brought to the situation a paternalistic demeanor whereby he undertook to tell them what their true needs were, thus unduly orienting them towards the product he wanted to sell.

In this case, the consent was not free and enlightened as per 1399 CCQ. And, although there is also a duty on the co-contractant to self inform in appropriate cases, in this case, we cannot say that the claimants failed in this respect because the defendant knew how to create a climate of confidence that did not incite any need or desire to go elsewhere for information.

The obligation to inform finds its source in the general obligation of good faith in 1375 CCQ The failure of the obligation to inform led to error as to the nature of the K (1400 CCQ), and

this error is excusable because of the complexity of the contracts. The confidence that was invited by the defendant as well as the convoluted text of the contracts excuses them for not having read the. It is unreasonable to reduce equality of bargaining power to the opportunity to verify the obligation by reading the contract

NOTES: - the k was null based on errors, not on duty to inform or good faith in general. However, this

case still pointed out some interest arguments as to the duty to inform. - The court held that the duty to inform could come from art.1399. “cette disposition (art.1399)

sous-tend que le cocontractant doit avoir en sa possession tous les renseignements pertinents et utiles lui permettant de prendre une décision contractuelle. Par conséquent, elle suppose, entre autres, l’obligation de renseigner qui impose à l’un des contractants de communiquer à l’autre les informations essentielles”. Even though, the plts. also have the duty to self-inform, in this particular case, b/c “en l’espèce, on ne peut pas dire que les demandeurs aient failli à ce devoir, d’autant que le défendeur avait su instraurer un climat de confiance qui n’incitait nullement à s’informer ailleurs”.

- The failure of the duty to inform could alone annul the k : “selon le professeur Baudouin, l’ommission de renseigner suffirait à elle seule à sanctionner de nullité le contrat au motif qu’il contreviendrait à l’obligation générale de bonne foi, sans qu’il soit ainsi nécessaire de faire appel aux causes de nullité”. CB at p. 126 The court here did not make the k null based on

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this point, the failure of the duty to inform also provoked the error, which resulted in the nullity of the k.

- This point seems support what Karim argued in his article (see CB at p.55). “Il existe actuellement une controverse au sein de la doctrine quant à la sanction

de la violation de l’obligation de bonne foi. Le manquement à cette obligation peut-il faire l’objet d’une sanction autonome? Dans la mesure où ce manquement ne donne pas lieu à un cas de vice de consentement suffisant pour appliquer l’article 1407 C.c.Q, quelle sera alors la sanction applicable?” –CB at p.62

“Aucune disposition ne laisse entendre que le législateur a limité la sanction en matière de formation du contrat aux cas des vices de consentement classiques prévus dans les articles 1400 à 1406 C.c.Q.”

“Au contraire, plusieurs dispositions prévoient des sanctions à la formation du contrat et établissent les conditions de leur application.” For example, the of marriage (440 C.c.Q); k of donation (1824 C.c.Q); k of hypothecs (2693 C.c.Q); absent of consent (1398 C.c.Q). “La règle de la bonne foi prévue dans l’article 1375 C.c.Q. nous paraît devoir être appliquée de la même manière et selon le même raisonnement que dans le cas prévu par l’article 1398 C.c.Q., où l’absence d’aptitude chez le majeur contractant donne lieu à la nullité du contrat conclu par celui-ci”.

La règle géréral prévue dans l’article 1416 C.c.Q. énonce expressément que le contrat qui n’est pas conforme aux conditions nécessaires à sa formation peut être frappé de nullité. Cette disposition et celle de l’article 1375 C.c.Q., qui exige la bonne foi lors de la formation du contrat, lorsqu’elles sont jumelées justifient une sanction autonome pour le manquement à cette obligation pouvant être la nullité, à condition que la preuve établisse, d’une part, un manquement sérieux par le débiteur à son obligation de bonne foi envers un créancier ayant les ‘mains propres’ et que, d’autre part, ce manquement ait été déterminant dans la conclusion du contrat ou dans l’acceptation des stipulations principales par le créancier de l’obligation.

- although throughout this case the duty is framed as a “devoir de renseignement” rather than a “devoir de conseil”, Jukier says what was expected if Descelles in this case is more akin to a duty to advise. He should have helped the couple pick what was best for them, not just lead them to the product he wanted to sell.

- very interesting in this case, the judge mentions that according to Baudouin, the failure of the duty to inform would in itself have been cause for nullity for the reason that it would be against the general duty of good faith, without having to resort to 1399 CCQ, but that it is no important in this case to ponder all these nuances in cause of nullity. The K is void under 1399 and 1400.

Distinction avec l’obligation de conseil: Baudouin –p.265- l’obligation de renseigner vise uniquement la communication au cocontratant

éventuel de faits pertinents à sa prise de décision et qui peuvent avoir sur l’adhésion au contrat un impact déterminant.

- L’obligation de conseil peut former l’obligation principale de certains contrats, va plus loin, puisqu’elle oblige son débiteur, non seulement à la communication de l’information, mais aussi à une présentation objective de l’ensemble des renseignements obtenus, à l’évaluation des différentes décisions que le cocontractant peut prendre, et même éventuellement à l’émission d’une opinion sur l’opportunité pour lui de conclure l’engagement.

- Lorsqu’il existe une relation de mandat, une relation de type professionnel (par exemple, le notaire agissant pour les deux parties), ou semi-professionnel (l’argent, le courtier d’assurances), l’obligation de simple renseignement peut se doubler de cette obligation de conseil.

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Compagnie Trust Royal v. Veilleux, [2000] R.R.A. 53 (C.A.)Duty to advice in professional area – financial agentFACTS: In 1988, Trust Royal offered Veilleux a loan, which was guaranteed by a life insurance. The amortisement for the loan was 25 years and the life insurance was 3 years. In 1991, the Trust Royal noticed Veilleux to renew her loan, but did not mention the life insurance. When Veilleux went to one of the branches of the Trust Royal in June 1991 to renew her loan, the agent also did not mention the life insurance. While in January 1992, the Trust Royal sent Veilleux a notice, which stated that her loan was not guaranteed by the life insurance and recommend her to call the custom service as soon as possible after receiving the notice. Veilleux did nothing as to the notice and died on March 31, 1992. ISSUE: Did the Trust Royal commit a fault not to inform Veilleux to renew her life insurance and therefore can not call the loan? HELD: - Although the trial judge found that the Company failed in its duty to inform, the Court of

Appeal reversed that finding, holding that a letter she received 5 months before her death, informing her that her loan was renewed, but that it was not accompanied by life insurance, discharged that duty.

- Thus, although the company failed in its duty to inform her sooner, she was negligent in not responding once she found out. Thus, her own negligence broke the chain of causation between the first fault and the damage.

Ratio: - Although the succession doesn’t win the case, there is a discussion about duties to inform.

However, the whole discussion is conducted without reference to any codal article of good faith.

- throughout the entire negotiation process about renewing the loan, there was not mention made whatsoever about the insurance policy. However, the following year, when the deceased was sent an annual statement of her loan account, it was written on the statement that the loan was not accompanied by an insurance policy, and to call right away. She never did. Thus, although the company should have told her sooner, should have advised her to renew before the policy expired, as they did with the loan, the chain of causation was broken by her own negligence.

NOTES: - this case raised the issue of duty to advise. The court characterized the k b/w the Trust and

Veilleux as a k of service. “L’appelante s’engage ainsi à l’informer ses clients des divers services financiers qu’elle offre et à les conseiller adéquatement. Elle est ainsi tenue d’agir au mieux des intérêts de ses clients, avec prudence et diligence, elle n’est toutefois pas tenue à une obligation de résultat”. “L’appelante manquait alors à son obligation d’agir au mieux des intérêtes de sa cliente,

avec prudence et diligence.” “L’appelante se présente comme un conseiller en matière de services financiers; elle doit

agir avec prudence et diligence. Cette obligation commande, à tout le moins, qu’elle soulève auprès de ses clients la question du renouvellement de l’assurance-vie au moment du renouvellement de leur prêt hypothécaire. En l’espèce, elle ne l’a pas fait; elle est en faute.”

No statutory duty or duty arising from mandate: In cases where there is no statutory duty or duty arising from mandate, recall Gonthier’s criteria in Bail: Actual or presumed knowledge of the information on the part of the party which owes the obligation to

inform The information in question is of decisive importance It is impossible for the party to whom the obligation is owed to inform itself, or the creditor is

legitimately relying on the debtor of the obligation

Duty to self-inform

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Questions to think about: What’s left of the duty to self-inform after cases like Bolduc, where the parties don’t even read to K, and Janin Construction, where arguably the more sophisticated party doesn’t verify the info?

Duty to infrom vs. Duty to advice - recall as noted by Letourneau that the terminology of duty to inform and advise is often used

interchangeably, but to be accurate a duty to advise is really a stronger obligation which involves giving an informed opinion about the option most favorable to the client (as in Bolduc) over and above merely presenting all the options (or risks) or information (Bail, Janin).

- France has gone further in requiring duties to advise than Quebec has, absent statutory obligation or through mandate. For example, there have been cases of duties to advise involving computer salespeople in France.

CLASS 5 Good Faith (Continued): Obligation of Cooperation Oct. 3 - Introduction

Art. 6, 7, 1375, 1470 (2), 1693, 2805 C.c.Q.

Obligation de Cooperation Commands a positive respect, more than simple abstention Depends on two factors: the pursuit by the parties of a common goal shown by their intention to collaborate and

the frequency of the relations between the parties See Bail There is such an obligation for sure in contracts of insurance where the insured has co-operate with the insurer

with respect to the declaration of risks and claims and also between franchisers and franchisees (Provigo)

A recap of the duty of good faith- We’ve seen how the duty of good faith has manifested itself in terms of judicially imposed obligations

in K, and we’ve seen it in the non-applicability of parties.- We’ve seen the duty to inform in pre-K stages of a contractual relationship.- And last class – duty to advise, which is one step up from the duty to inform. And it’s particularly

stronger in cases where statutes have a duty to advise (professionals – certainly no doubt that they, banks, and financial advisors not only have duty to inform but also to advise).

Most extreme aspect of good faith: duty to cooperate- This is the part that says that during the life of the K, there should be a duty to cooperate between the

contracting parties.- Diesse article points out that there is a whole psychological about-face if you’re going to accept the

duty to cooperate.- How far removed is this from commercial reality? What has happened to the bargaining and the

negotiation of contracts since then?-Diesse: Have to see this as a psychological about-face in the acceptance of what a K is. Have to change one’s whole conception of a contract.

- We tend to think of K in classical terms – impoverishment of party in order to increase wealth for another.

- The about-face that must take place (and that many say has already taken place): a K is not about conflicting rights, but rather complimentary rights. Although the interests of the parties to a K are different, not in conflict.

- Diesse goes way back and classifies the K as a form of partnership – when parties are in a K, they’re partners and must therefore work together to make the best of the partnership. The idea that a K requires its two partners to work together in their mutual interest is very different from the classical individualistic notion of a K.

- This means that you have to facilitate the other party’s execution of the K. Take into account their interests, and respect them, and act accordingly.

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- This is a very drastic change in mentality: is this the new conception of the K?-The decision in Provigo: This case goes far beyond any of the other cases we’ve seen – beyond Houle and Soucisse. Not that just that the K was unfair in the beginning, etc… Worked well for 10 years. No particular abuse of right here, but going even further than the implicit obligation in a K and not applying an obligation that may be abusive, duty to inform etc… 10 years into life of K, you can’t act any way you want if it’s going to have negative implications in the end for the other party.

- Some people do argue that the extent of this duty to collaborate is limited by the extent of the duty to cooperate involved. But the doctrine does not unanimously limit it to franchise agreements. But it will apply to a relational type of contract.

Further ratification of duty to cooperate: Imprévision - Can the duty to cooperate be a potential root to bringing in the doctrine of imprévision?- Will this duty to cooperate require parties to renegotiate in light of changing circumstances. The issue

is: when the equilibrium of the K is upset due to some extrinsic and unforeseen event, can it require the parties to renegotiate the K in order to reestablish the equilibrium?

- This is loosely linked to the common law notion of frustration – whether or not changing circumstance should have effect of enforceability of a K.

« La théorie de l’imprévision…” Nothing allowing for imprévision in CCQ, but it is interesting to note that it was in the draft version…

- But in extreme circumstances such as peanut drought, incredible fact pattern of Churchill falls, should we have an ability to go in and change contracts so as to reestablish an economic equilibrium?

- Martin: Part of “schizophrenia” of CCQ: mental block when it comes to imprévision and lesion, but goes at lightening speed when it comes to good faith and abusive clauses. It’s a very strange tension within the law.

- So this is a DRASTIC inconsistency – lenient in one area, but significantly less so in others.

What should the remedies be for imprévision?- Even those who advocate strongly for imprévsision, say that we shouldn’t let the judge decide when to

apply it. Why? Because there is still this mentality that civil law judges shouldn’t re-write contracts.- He says that a party could be held liable in damages for not renegotiating, but judges shouldn’t go in

and split the loss so that each party loses equitably.

F. Diesse, “Le devoir de coopération comme principe directeur du contrat” (1999) 43 Arch. phil. droit 259.GENERAL ARGUMENT: - The duty to co-operate in context of K has always been a legal std., but std. that for a long

time under the classical view of K we’ve put in the shadow of a strict or adversarial notion of contract (Similar to our notion of adversarial proceeding, where K has competition or as way of regulating a K).

- We are returning/re-discovering a more fundamental logic of contract which will be co-operation and not conflict, where co-operation is a common goal between parties to a K.

- He defines common goal as sum of individual interest of Ks. Belley says however this is a minimal definition of Ks to conceive of common interests as individual interest of parties to K. K is so much a fact of co-operation than conflict, that there is something in general experience of contract like an affectio contractus or societas (a sense of belonging).

SOURCES OF THIS DUTY TO CO-OPERATE: - This duty is a legal duty imposed by the law and then either recognised and explicitly

expressed in K by parties; then this duty becomes a Contractual obligation by the very words or express intent of the parties.

- If it is not express in K, the legal duty is an implicit obligation which will be implied by court on basis of considerations like fairness, usefulness, business efficacy, or good faith (hereinafter GF) which are all objective bases of duty to c-operate.

HE MAKES A CLEAR ASSESSMENT OF THE PROPER UNDERSTANDING OF DUTY TO CO-OPERATE:

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- To co-operate is more than just to act faithfully or honestly. It is more than just avoiding causing an injury to the other party or refraining from acting to the detriment of other party.

- There is a positive aspect behind this duty which is working together for a common or convergent interest or more generally the duty has to do with the fact of providing a benefit to the other party not just avoiding causing a detriment.

THE DUTY TO CO-OPERATE IS NOT A SPECIFIC RULE WHOSE MEANING CAN BE STATED IN ADVANCE. - It is a legal std. content of which cannot be betterment before knowing of the special

circumstances to be faced by parties.CONTRACT = PARTNERSHIPBASIC ELEMENTS OF DUTY TO CO-OPERATE:1. Interdependence linked to solidarity between to parties:

- Interdependence is importance in context of K whose development in future. The longer the term of the contract, the more uncertainty, the more need for solidarity of parties.

2. Respect for the interests of the other parties:- This is the basic notion of fairness and is the basic ingredient of duty to co-operate

3. Reciprocity in terms of proper performance of K, which is needed to have the gain which is intended through the fact of Contracting.- Diesse gives the example where in collaboration between author and translator to have a

good translation for performing K of translation there is a clear and important need for co-operation

- Some Ks can’t go without co-operation between parties in process of performance. There cannot just be parallel performance by every party of his obligations. There is a need to work together to get positive results parties were seeking.

FUNCTIONS OF DUTY TO CO-OPERATE: - Diesse distinguishes between two complimentary functions. Duty to co-operate is means of

regulation of contractual behaviour of creditor or debtor. - Creditor will have to exercise his right with respect for interest of other and considering

common interest between parties. Creditor will not to insist on strict performance of K in order respect his obligation to co-operate.

- Debtor will have to resist temptation to ask for modification of K, which is not possible for other party to refuse in performance of K, given the cost that would be incurred by creditor with refusal to modify

- Evolution or/and adaptation of K: To promote better techniques or better methods of K negotiation/K management/K adaptation to changing circumstances. The duty to co-operate has dynamic function to force and to teach the parties the ways of promoting efficiency of their contractual relation in context of changing circumstances. They must learn better techniques of K (re)negotiation, adaptation, management. It is crucial in context of long-term K otherwise you will just get failure of long-term Ks. Duty to co-operate is a recipe for Contractual success in context in never-ending change of circumstances.

Provigo Distribution v. Supermarché A.R.G., [1998] R.J.Q. 47 (C.A.).Facts: ARG had a franchise agreement with Provigo whereby ARG operated as an independent contractor and was allowed to use Provigo’s name but in exchange agreed to pay fees and have to purchase 90% of its supplies from Provigo distribution centres. There weren’t any abusive clauses, and the agreement had been working for over 10 years. But, Provigo changed its marketing strategy and opened discount stores with an everyday low price idea rather than weekly advertised specials. These stores were not franchises, but were rather corporately owned. Nothing in the contract prohibited from competing with their own franchises.Issue: Was is a breach of good faith to open the discount stores when the franchises were unable to compete with these prices because they were bound to buy supplies from the franchisor?Holding: It was not a breach to open the stores per se, but it was a breach of the implied obligation of co-operations and loyalty in a franchisee-franchisor contract not to help the franchises deal with the new competition. They do not have to refrain from competing altogether

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with their franchisees, but they have an obligation to collaborate and provide the necessary tools so that the franchisees could stay afloat in the new market.Ratio: - The court throws a word of caution about overusing the concept of good faith and abuse of

right. They acknowledge the “new contractual morality” that is brought by art 6,7, and the doctrine of abuse of rights. But, they say it is a mistake to treat every non-execution of an implied obligation as an abuse of right. There is civil fault whenever an obligation is not performed, be it an express obligation or one that results from the nature of the K or from equity as per 1434 CCQ. The simple fact that there is non-performance of an implied obligation does not automatically entail an abuse of right, otherwise this notion will lose all meaning.

- Thus, through the lens of good faith, and within the framework of implied obligation of the contract, the fault that was committed by Provigo was not that they exercised their right to compete with their franchisee, which was never excluded by the contract of franchise. Rather, it is that they failed to perform their obligation of collaboration and loyalty in providing technical and commercial assistance which would have allowed the franchisee to compete in the new climate that was largely created by the franchisor. They are allowed to compete, but the nature of the contract of franchise, which is one of affiliation and partnership, obviously limits the extent to which this competition can be free from any obligation to the competitor.

- The franchisee was bound to buy 90% of its supplies from the Provigo, and the prices it paid prevented it from being able to compete if it wanted to realize a profit. Although it is not for the court to say what the reasonable and prudent franchisor should have precisely done in this situation, it is clear that they failed in their duty to collaborate in order to minimize the impact of the competition they created.

- While there was a connection between the losses suffered by the Granby stores and the opening of the Heritage stores in that region, there was no evidence that showed that the Heritage store had an influence on the evolution of the food market in Cowansville generally, specifically on the Gagnon Group’s store in that area. So damages only awarded with respect to the losses suffered by the Granby stores.

NOTES:- Most commentators say that such a duty to co-operate can only work for relational, long-

terms contracts such as this one, and not instant on-time transactions.- the more controversial question is whether the duty to co-operate requires parties to

renegotiate the terms of the K when external circumstances change

1693. (Impossibility of performance) A debtor is released cannot perform an obligation by reason of superior force and before he is in default, or where, although he was in default, the creditor could not, in any case, benefit from the performance of the obligation by reason of that superior force, unless, in either case, the debtor has expressly assumed the risk of superior force.(2) The burden of proof of superior force is on the debtor.1470. (Civil liability, certain cases of exemption from liability): A person may free himself from his liability for injury caused to another by proving that the injury results from superior force, unless he has undertaken to make reparation from it.(2) A superior force is an unforeseeable and irresistible event, including external causes with the same characteristics.

The duty to co-operation- This is the last aspect of the duty of Good Faith that we will be discussing in this course. We have

seen how Good Faith has been imposed in contract, in non-applicability of contracts in Aselford, and the duty to inform in pre-contractual negotiations. We also discussed the duty to advise, which is a step up from the duty to inform. Statutes and jurisprudence have imposed an obligation to advise on professionals, banks, and financial advisors in particular.

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- The most extreme aspect of Good Faith is the argument that during the life of the contract there should be a duty to cooperate between the contracting parties. Can the duty to cooperate be a potential root to the bringing in of the doctrine of imprévision?

- The Diesse article is long, dense, and repetitive, but an interesting aspect is the psychological about-face in the conception of a contract.

- Classically, we think of a contract in conflictual terms, thinking the success of one party depends on the impoverishment of the other.

- Diesse says a contract is about complementary rights, not conflicting rights. He pulls out what some other scholar said about contracts, that a contract is a form of partnership.

- The idea that a contract requires partners to work in mutual interest is very different from the classical notion of individualism that prevailed in the 19 th century. “Partnership” means facilitating the other party’s means of reaching his goal, and taking into account his interests.

- Provigo is a recent real-life example of the duty to cooperate. - It’s about a franchise contract. In exchange for the franchisee using the Provigo name and

equipment, he gets to operate a Provigo supermarket. He has to purchase 90% of his supplies from Provigo’s distributive centre at the prices fixed in the contract. It was not an unfair agreement, when it was first agreed upon. It worked fine for ten years.

- Then, Provigo initiates a new marketing strategy, opening Maxie and other supermarkets. The new strategy is “everyday low prices”. By opening these corporately-owned discount stores, they weren’t doing anything prohibited in the contract.

- The Court of Appeal says Provigo never limited its right to open new corporate stores. The problem is that the franchisee was bound in his contract with Provigo to buy 90% of his supplies from Provigo at prices set in the contract. He couldn’t lower his prices, so he lost business. He sues Provigo for the losses he sustained. What if it had been another company, not Provigo, which competed with the franchisee?

[In class: What was important about this particular contract? Salient factors? The franchisee must buy 90% of goods from Provigo, the franchisee is not allowed to fly the Provigo banner and not use their products. In exchange for good-will, 90% of goods must be supplied by Provigo and at Provigo’s prices. Of course, the franchisee could not go outside “Provigo marketing” and asked if they could launch their own “everyday low pricing”, but they said no. The non-competition clause in the K made it so that he couldn’t open a mom-pop shop in the area. However, Provigo had no obligation of exclusivity or to not compete. Provigo’s actions to open two types of marketing strategies: are typical supermarket with typical prices and then we’ll have discount stores with lower pricing. This lowered sales in the market by 15%. Thus, Provigo didn’t breach a contract clause. Then why does court ask them to pay 2.3 million in damages. What did Provigo do wrong? For liability, you need fault, causation and injury. Where’s the fault? Did Provigo commit an extra –K civil wrong or an explicit breach of K? to grant 2.3 million, there must be grounding in fault. So the fault was there was implicit obligations that were breached. This implied clause of GF exists in every K. The GF was breached. No prohibition on expanding, but Provigo should have given tools to franchisee to deal with this new expansion…court gives some ideas i.e. give franchisee the ability to initiative everyday low prices. Or maybe they should be able to get more than 10% of their goods from another distributor so that they don’t have pay high prices. No matter what, Provigo had to do SOMETHING because by doing NOTHING they are breaching their duty to co-operate. IN using the duty to cooperate by entailing the duty to modify the K to adjust to the equilibrium of the K. if the equilibrium is upset due to new unanticipated circumstances, should the party be obligated to co-operate a.k.a. creditor must help the debtor.]- The Court of Appeal says the contract contains implicitly a duty of Good Faith, which

translates in these circumstances to an obligation of loyalty, partnership, and collaboration. The franchisor couldn’t just go off and do whatever it wanted, but had to make sure not to impoverish the franchisee. He had to give the franchisee a way to prevent or minimise the economic loss caused by the new strategy. Provigo is therefore held contractually liable in damages by not fulfilling this obligation of cooperation.

- This case goes beyond Soucisse, Houle, etc., because it wasn’t intrinsically unfair or Draconian, and there was no abuse of right, and it worked well for ten years. The Court is saying that ten years into the life of a contract, you can’t act any way you want to without

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taking into account the interests of your co-contractant. This changes our conception of what a contract is.

- It’s a powerful case, and now we can’t doubt the existence of a post-contractual obligation of cooperation. There is no doubt that a franchise agreement, by its very nature, lends itself to a duty to co-operate. But the judgement suggests that this duty goes further, extending to all relational contracts.

(Extension of the Obligation of Cooperation to Situations of Hardship)

Canada Starch v. Gill & Duffus, [Unreported – 1981] (Que. S.C.)Facts: Canada Starch (plaintiff) claims damages from the defendant (Gill) for its failure to deliver peanuts it had bound itself to deliver. The defendant pleads that the failure was due to a cause beyond its reasonable control and that the action should be dismissed. Gill could not get more peanuts from its supplier due to a drought. They supplied 71% of the contracted tonnage.Issues: Is the defendant liable towards the plaintiff for damages it incurred when it had to buy from other sources?Holding: Nope. Action dismissed and no damages granted. Ratio: - The defendant has not established that there was an absolute impossibility to buy US peanuts from

other suppliers to make up the shortage under its contract with the plaintiff.- The defendant assumed that the force majeure clause in its contract applied. However, the defendant

cannot be faulted for not buying in May since historically there had been an over-supply of peanuts. The court is of the opinion that the defendant did not deliver because of the action of the shellers that was brought about by the drought and the resulting crop failure.

- If no peanut had been available in the US then the defendant could not be sentenced to pay the plaintiff’s damages. However, peanuts did become available at 3x the price of the contract. Otis Elevator will be applied. Thus, the action is dismissed and no damages are granted.

Note: Court rejects argument based on a) imprevision and b) force majeure in the CCLC.

Beaudouin- Jobin: Obligation de Cooperation Commands a positive respect, more than simple abstention Depends on two factors: the pursuit by the parties of a common goal shown by their intention to

collaborate and the frequency of the relations between the parties See Bail There is such an obligation for sure in contracts of insurance where the insured has co-operate with the

insurer with respect to the declaration of risks and claims and also between franchisers and franchisees (Provigo)

Imprevision: - The more controversial question is whether the duty to cooperate will entail requiring parties to modify

and renegotiate contracts in light of changing circumstances. Are there circumstances of extreme difficulty in which the duty to cooperate means the creditor wouldn’t even require the debtor to fulfill contractual obligations? This is the doctrine of imprévision, loosely parallel to Common Law “frustration”.

- See the Canada Starch peanut case. - U.S. farmers had a contract (under U.S. law) with the DF, a middleman, who had a contract

with the PF under QC law to supply peanuts at 30 cents/pack. A drought in the U.S. reduces the amount of edible peanuts by 55%. The DF can’t get all the peanuts he promised the PF, unless he pays three times the price, so he delivers fewer peanuts than promised.

- PF sues for damages. DF argues imprévision: he was caught with a drastic unforeseen event outside his control that interfered with economic situation.

- The positive law in QC was that DF could argue Force Majeure under 1693 and 1470(2) CCQ, or impossibility under 1693. The problem is that paying three times the price is not impossible. From 30 cents to 90 cents. The question we mount is an argument that one party should be excused form performance or that the parties should renegotiate their K relationship

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if this happens… this is the doctrine of Imprevision and the closest CiL dealing with CoL’s frustration.

- There is currently no doctrine of imprevision in Quebec Law, see Martin article. Barring an explicit clause put into the K by the parties or a specific enactment in a specific area, there is no doctrine of Imprevision. The courts don’t want get involved in K where performance would be difficult. However, art 1470 (2) and 1693 allows parties to get out of K when there is a force majeure. Purpose of this is to not repeat the law but to ask whether the next step in the development in the doctrine of GF is to take the Duty to Co-operate and use it as the stepping stone or the basis of the doctrine of Imprevision.

- In Martin’s article, he asks: “est il equitable que l’un des parties exiges l’execution de contrat quand l’economie…boulverse…..pas prevue”..he says no and continues on that there are 4 ways to reason to ground Imprevision in a Duty of GF i.e. the duty of GF/duty to cooperate, implied obligation, reading in for impossibility to encompass economic issue, and . The other article by Stoffel-Munck a French doctrinal writer and he writes on Imprevision where he believes it is a natural extension of the duty to cooperate is to oblige the parties to renegotiate the K in light of the circumstances that arise. If you trace doctrine of Imprevision in Quebec, there was an attempt to legislate (1977 draft of CCQ) on this topic. But they said it would bring in to much uncertainty into the law of K. martin and Stoffel-Munck don’t think this is going too far but Quebec does.

- Are there CiL jurisdictions that have adopted an Imprevision clause? In Germany, the courts have brought in a doctrine of Imprevision. Germnay is an adventurous jurisdiction. ON what basis has German CiL adopted the doctrine of Imprevision, and what si the remedy they are using? Historically, the triggering event in Germany which caused them to cause about modifying their legislation and laws was the devaluation of the mark at the end of WW1. Two decisions that arose b/c of this incredible devaluation in the currency that caused revision of hardship in contracts. Other things have surfaced as well that have caused imbalance in Ks. They are: t Berlin Blockade and the German reunification…unforeseeable and caused great disruption has forced the hardship issue come before the courts in a way that it wouldn’t in Quebec. Prof loves Peanut case however! IN this area of law, Germany is most like England. But Germany still doesn’t have an expressed clause on Imprevision. No specific legislation on Imprevision and the courts in the 1920s and 1950s and most recently in ‘92, have decided on the doctrine of Imprevision based on section 242 of the German Code which is the provision of GF. Thus doctrine of Imprevision is grounded in GF, where Martin and Stoffel say it should be. Also note, how is the duty to cooperate to bring in Imprevision different from what is happening under CoL rubric of frustration? If Peanut case arose in CoL, what would the powers of the courts be? They would tell the parties not to perform. Frustration is an excuse form performing…I don’t have to deliver the peanuts at 30 cents per pound because this K was frustrated…like a cancelling of the obligations under the K. That doesn’t mean that aspects of unjust enrichment won’t come into play and other things. Anyway, when the currencies devalued or there’s a draught, or blockade or an oil embargo, any big event that affects economics, you must sit down with contracting parties and renegotiate. If they don’t renegotiate, what is the remedy? If there are no peanuts? The CiL reasoning…obligation of GF, duty to cooperate, to renegotiate, but if not….no splitting of loss in frustration, it’s all or nothing, you are either excused or not. The damages will probably be 30 cents assuming that a reasonable negotiation get to 30 cents a pound. Can the judge impose the solution on the parties? No. Stoffel-Munck says you can’t do that b/c we’ve already thrown away the will of parties, and it could potentially hurt both parties terribly. The parties have a right not to contract. The one freedom that can never be taken away from you is your freedom to or not to contract. But he still wants Imprevision to be worked into GF.

- In Cardinal Construction, the Court of Appeal says “la théorie de l’imprévision n’est guère reconnue dans notre loi”, so there’s no similar doctrine to frustration in Civil Law. The 1977 Draft Civil Code envisioned modification of a contract as a result of excessive hardship caused by unforeseeable circumstances – but this was not included in the new CCQ.

- In Churchill Falls, there was potentially a 65 year long contract between Churchill Falls and the Quebec government to supply all hydro power from the falls to Quebec at low prices, requiring the Nfld government to buy its hydro elsewhere at higher prices. In extreme circumstances like a huge

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drought, should we have an ability to go in and modify the contract to re-establish its economic equilibrium? Is the next step in the development of Good Faith to take the duty to cooperate and develop it into a doctrine of imprévision? Is the PF not in Good Faith by requiring the DF to be held strictly to the contractual obligation? In Canada Starch, the PF was making peanut butter. The argument was that the PF didn’t mitigate his damages, by raising the price of peanut butter and passing on the increased cost to the consumer. So especially in circumstances where PF can get back some of the damages, doesn’t that go toward an argument that the PF is not in Good Faith? No recognition for the need to revise the K even though it was 65 years old and on longer makes any sense. This is QC’s great event…so you see, nothing like in Germany.

- Is the extension of the obligation to cooperate the obligation to require parties to renegotiate? Stoffel-Munck says a party should not be allowed to insist on strict legal rights in situations that greatly disrupt equilibrium between parties. He refers on p. 247 to a case called BP v. Huard, in which Huard owns a car repair shop and enters a contract of distribution with BP agreeing to buy petroleum products from BP for a certain price. In 1982, prices were deregulated in France, and the price went down 17 centimes/litre. Unlike the Provigo case, it’s not the co-contractant that causes the other party to sustain damage by fulfilling the contract. The Cour de cassation said the failure to renegotiate was a breach of Good Faith. So we’re on the cusp, and it’s just a matter of time before a court says there’s a duty to renegotiate.

- There are as many opponents to imprévision as there are proponents. Some say the parties should include clauses to cover changes of circumstance. One scholar suggests reading “economic impossibility” into the definition of force majeure. But this isn’t plausible because there have been opportunities for courts to do this, and they haven’t done so. Quebec Civil Law has a mental block with respect to lesion and imprévision, where courts remain wedded to autonomy of the will. Yet there is no such block when it comes to Good Faith. Jukier characterises this as schizophrenic, drastic inconsistency.

- Remedies for imprévisionEven those who advocate strongly for imprévision say we shouldn’t let judges decide when to apply it, because there’s a mentality that civil law judges shouldn’t rewrite contracts. In BP, the judge says a party can be liable in damages for not re-negotiating, but the judge himself doesn’t say how they should split the loss. This mental block comes from the tension between flexibility and certainty.

S. Martin, “Pour une réception de la théorie de l’imprévision en droit positif québécois” (1993) 34 C. de D. 599.- Considering the huge impact that the principle of caution would have on future state of civil

liability (based on risk) we should embrace it warily. Penetration of concept of precaution is evident mostly in international law and communitarian laws (small self-governing communities). Inspires regulation in fields such as chemistry, pharmacy, aeronautics, nuclear energy, genetic engineering, environment, and medicine. F. Ewald said that he who introduces the risk must foresee that in not taking sufficient caution, in particular, abstention, he may be declared liable. It is still a principle and not has force of law until implemented in statute.

- Two possible directions: Simple principle with political orientation that will have minor influence on law OR New juridical standard will great impact on evolution of law with impact on decision- making process

- Caution principle can enrich the following essential juridical concepts:PREVENTION (which is to take necessary measures for the non-occurrence of a foreseeable event). Precaution goes one step further so that probability of occurrence renders necessary measures of protection to protect against foreseeable risksRIGHT TO INFORMATION (DROIT D’INFORMATION)

- Will foster the development of research and impact studies like you see in environmental business and activities; more and more forms of impact studies of residual risks- Increase in terms of form of information available is due to principle of precaution- Certain tribunals have announced condemnations for failure to take precautionary measures even if defendant did not have access to the scientific knowledge.

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PROPORTIONALITY (in context of environmental law regarding the circulation of products v. harmfulness of the products or process of production to environment)

- Precaution adds element of subjectivity to laws e.g. allowing a state to oppose the development of research or a technology that it fears

- Danger of drastically changing and impoverishing the law of liability based on risk: By giving rise to fear that impedes progress andDeveloping a regressive notion of liability founded on fault rather than risk

- Problem is that liability based on fault and of liability based on risk are competing regimes where adoption of one could mean exclusion of other in past, risk won over fault in legislative enactments

- Today, liability based on risk means victim establishes causal link between injury and actions of defendant and of little important whether risk of harm was foreseeable or uncertain. Only existence of intervening factor could exonerate defendant

- As liability insurance figures more prominently in indemnifying victim, understandable why there is temptation to transform judicial notion of risk to insurance company friendly notion of probable risk

- Present regime allows us to place charge of hazard and uncertainty on one who introduced risk and profited from it as opposed to victim this traditional regime often challenged by providers of full-coverage insurance plans where both potential authors of harm (liability insurance) and potential victims ( personal insurance) are covered

- BUT: financial arguments (suffering of insurance companies) should not be grounds for shifting to another regime. Basis for change should be philosophical in nature!

- Essential objective of civil liability, i.e., to indemnify victim is best met though liability based on risk

P. Stoffel-Munck, Regards sur la théorie de l’imprévision: Vers une souplesse contractuelle en droit privé français contemporain (Aix, Marseille: Presses Universitaires d’Aix-Marseille, 1994) at 127-45, 163-6.- The principle of co-operation has to do with doctrine in French administrative law re: doctrine

of imprecision (unforseeability). Doctrine of Administrative law gives excuse for non-performance of K in cases of impracticability (economic) due to an abnormal change of circumstances. As for the basis of this principle of co-operation, he suggests that this principle is a deduction from the more general principle of good faith. Major characteristic of Civil law systems to refer to good faith rather than in Common law.

- THREE IMPLICATIONS OF CO-OPERATION:- Through this principle, a party to a K may be obliged to first renounce the exercise of

a Contractual right or a Contractual power which is no longer useful or whose expected utility initial purpose as this appeared. The first spatial obligation issuing from co-operation is to renounce the strict performance of the K and not to insist on respect for exercise of contractual right

- The principle of co-operation could oblige party of K to renegotiate the whole contract or just a specific term with or without the assistance of a third party; the negotiation would be an alternative to the termination of the K or to a judicial revision of the K

- The principle of co-operation may signify that a party would be obliged to compensate the other party for the consequences of a non-co-operative behaviour; especially if this party insists on the strict performance of a K or if this party refuses to renegotiate the contract, the legal consequence could be that he would be liable for compensating the other party for the consequences of his non-co-operating behaviour

- Stoffel also warns us of very serious reluctance toward this principle or some extension of it and he remarks that this resistance is greater in civil law as compared to commercial law in Civil law. Civil law and commercial law distinction is greater in Civil law.

- Resistance to this principle is on philosophical or moral foundations, the principle of which is the reference is the autonomy of the will which is a basic fundamental principle against a clear or large reception of principle of co-operation; Stoffel says that lawyers which have

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moral considerations of guiding principles will resist principle of co-operation; principle of co-operation has to do with economic considerations rather than moral considerations.

[Handout – tentative] W.F. Ebke & B.M. Steinhauer, “The Doctrine of Good Faith in German Contract Law” in J. Beatson & D. Friedmann eds, Good Faith and Fault in Contract Law (Oxford: O.U.P., 1997) at 180-190 (excerpt). CLASS 6 Third Parties’ Rights Oct. 10

Art. 1440-1450, 1457 C.c.Q.

Art. 1440: a k has effect only b/w the k parties – k could not extend to the 3P, except where provided by law.

Art. 1441: the rights and obligations arising from k could be passed to the heirs upon the death of a k party, IF the natural of the k permits it.

Art. 1442: the rights passed to one k party’s successors by particular title if they are accessory to property which passes to them or are directly related to it.

Art. 1443: k could only bind the k party AND his/her heirs; k party also could in his/her name to promise a 3P to perform an obligation, if the 3P fails to perform that obligation, the k party will be liable for the injury caused by the 3P’s non-performance.

[III. Stipulation for another – (arts. 1444 – 1450)]Art. 1444: a k party may make a stipulation in a k for the benefit of a 3P (= the 3P beneficiary). Under this right, the 3P could directly ask promisor to perform his/her obligation.

Art. 1445: no requirement for the exist or the determination of the 3P beneficiary when the stipulation was made in the k; but he/she need only exists or be determinable when the performance commence.

Art. 1446: the stipulation may be revoked when that the 3P beneficiary has not advised the stipulator or the promisor his acceptance of the stipulation

Art. 1447: the only person could revoke the stipulation is the stipulator. BUT IF the promisor has an interest in maintaining the stipulation, the stipulator may not revoke it without the promisor’s consent.

Art. 1448: revocation of the stipulation has effect on the moment i) the promisor knew it; ii) the opening of the succession, if it is made by will. Where there is no new beneficiary, the stipulator or his heirs get the benefits of the revocation.

Art. 1449: even after the death of the stipulator or the promisor, the 3P beneficiary or his heirs still may validly accept the stipulation.

Art. 1450: the promisor may set up against the 3P beneficiary under the same defenses against the stipulator.

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Two Questions: 1. How the 3P could benefit from the k?2. Can K parties be held liable to the non-performanced k to the 3P?

Concept of relativity- art. 1440- two excepts: - 1. Art. 1443: “promesse de porte-fort”;- 2. Art. 1444: Stipulation for the 3P

Les effets du contrat à l’égard des tiers: Baudouin –p.376- Le contrat a un effet relatif, en ce sens qu’il ne lie pas les tiers, c’est-à-dire les

personnes qui n’y sont pas parites - Cependant, le contrat crée malgré tout une situation juridique qui s’impose à

tous et que tous sont tenus de respecter. Dans ce sens, le contrat produit quand même certains effects à l’égard des tiers, effets qui ne proviennent pas de la présence d’un lien de débiteur à créancier, mais plutôt de l’existence du fait juridique que ce contrat, conclu entre les parties, représente pour eux.

- De plus, le droit civil compte des mécanisms – promesse du fait d’autrui, stipulation pour autrui, simulation – qui établissent des liens plus ou moins intenses entre les parties contractantes et les tiers.

Le principe de l’effet relatif des contratsObservations générales - La source formelle du principe de l’effet relatif des contrats se retrouve à l’article

1440 C.c.Q., tel que complété par les articles 1441 et 1442 C.c.Q. - Pour être lié par une convention, soit comme débiteur, soit comme créancier, une

entente (une volonté de s’obliger), est indispensable. - Ce principe est loin d’être aussi absolu dans la réalité. En effet, la plupart des

obligations contractuelles sont transmissibles, comme la plupart des droits, à l’exception de droits extrapatrimoniaux ou de ceux exclusivement attachés à la personne.

- Dans l’appréciation de la portée de l’effet relatif des contrats, il ne faut pas confondre deux notions voisines et parfois difficiles à bien distinquer: l’effet de l’obligation et son opposabilité.

- Le principe de l’effet relatif des contrats doit donc être réduit à sa vraie dimension qui est la suivante: le tiers n’a aucun droit de créance, ni aucune responsabilité obligationnelle en raison d’une convention à laquelle il n’est pas partie même s’il demeure tenu de respecter celle-ci.

Champ d’application- Le contrat ne produit pas seulement ses effets à l’égard des contractants eux-

mêmes. Il atteint aussi tous ceux qui, d’une façon ou d’une autre, continuent la personnalité juridique des parties, soit les héritiers (légaux ou testamentaires) et, dans certains cas, les ayants cause à titre particulier.

- Les contractants représentés- les héritiers, soit universels, soit à titre universel. – art. 1441 C.c.Q - les ayants cause à titre particier. - Les tiers

- Les tiers, ou penitus extranei, sont tous ceux restés totalement étrangers au contrat soit au moment de sa conclusion, soit postérieurement à celle-ci.

- Créanciers chirographaires: les contrats produisent donc, au sens très large seulement, un effet juridique à l’égard des créanciers chirographaires.

- Responsabilité du tiers à l’égard d’une partie. C’est un aspect important du principe de l’opposabilité du contrat.

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- Responsabilité d’une partie à l’égard du tiers. Parfois, même un tiers peut invoquer l’inexécution d’un contrat intervenu entre deux autres personnes pour réclamer le dommage subi par lui en raison de cette inexécution.

- L’inexécution ou l’exécution déficiente d’une obligation contractuelle constitue une faute extracontractuelle

- La violation du contrat peut causer à un tiers un préjudice direct. I.e. l’inexécution de l’obligation contractuelle constitue pour le tiers une faute, source de responsabilité, et lui donne un droit de recours en vertu des dispositions générales relatives aux obligations légales (in Bail).

General Motors v. Kravitz, [1979] 1 S.C.R. 790The application of the art. 1442 : A legal warranty against latent defects is an accessory of the thing sold. Articles in C.c.Q:

Art. 1726: The seller is bound to warrant the buyer that the property and its accessories are, at the time of the sale, free of latent defects. The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect.

Latent defects: the defects that render the property unfit for its intended use or diminish its usefulness so that the buyer would not have bought it or paid so high a price if he had aware of them. An apparent defect: a defect that can be perceived by a prudent and diligent buyer without any need of expert assistance.

Art. 1727: the remedies are, if the property perished by reason of a latent defect that exist at the time of sale: i) restore the price to the buyer; ii) deduction of the payment, if there is force majeur or the fault of the buyer. Art. 1728: If the seller was aware or could not have been unaware of the latent defect, the remedies would be the restore of the price AND the damages suffered by the buyer. => a presumption of knowledge of the defect

FACT: Kravitz bought a new 1968 car from Plamondon, an authorized dealer of G.M. in 1967. Then Kravitz found the car had certain defects from the moment he took delivery of it. Because he was not satisfied with the reparation, he bought an action against both Plamondon and GM, arguing that i) the k b/w he and Plamondon should be cancelled; ii) Plamondon and GM should be condemned jointly and severally to pay him the purchase price and the amount of the certain damages. ISSUE & HOLDING: Whether can Kravitz successfully, as against GM, avail himself of the legal warranty against latent defect?

Under art. 1522 & 1527 C.c (now 1726 -1728), there is no doubt that in selling the vehicle to its dealer, GM became liable to it for the warranty against latent defects. Hence Plamondon could have brought a redhibitory and damage action against GM, based on this legal warranty against latent defects. In the appropriate circumstances, Kravitz could have exercised this remedy himself through an action in subrogation.

However, in the case at bar, Kravitz sought to exercise against GM a personal right which he would have acquired with the automobile and whereby he could avail himself directly against the manufacturer of the legal warranty against latent defects resulting from the sale by the latter to its dealer. To allow him to do so, the court must answer the following three questions. 1) The first question is whether the non-warranty stipulation contained in the k of sale b/w

Plamondon and Kravitz, in the circumstances of the case at bar, should be held to be valid? NO, it must be held null and void; it cannot be a bar to Kravitz’s remedy against GM. - the French courts have consistently held that any clause avoiding or limiting the liability of

a professional manufacturer or seller is void. Doctrinal comments are: 1) the stipulations in the k as the parties’ will is not absolute and it is necessary to assume that the parties are in good faith; it can not be used to allow one of them to stipulate in a k against the

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consequences of the “dol” he has committed when making this very contract. 2) the presumption of knowledge that flows from the professional status is considered to be not rebuttable. 3) in order to protect the non-professional buyer, the warranty against latent defects was considered as a matter of public policy in cases where the sale is made by a manufacturer or professional seller.

- as to the case at bar, the judge preferred the French approach and saw no reason to depart from it. Moreover, the k of sale was a standard form k. In this type of k, a manufacturer or a professional seller is not permitted to ignore the warranty against latent defects or limit its effect, to the detriment of the non-professional buyer (this has already been adopted by the courts of Quebec).

2) The second question is what about the effect of GM’s conventional warranty when the automobile was delivered to Kravitz. It should be held null and void. - Because neither a manufacturer nor generally a professional seller can contract out of

the legal warranty against latent defects or limit the liability resulting from such warranty. Consequently, any provision of the conventional warranty which would be to relieve GM from its liability under the legal warranty for latent defects for which it is liable must be held to be null and void.

- It follows that GM’s conventional warranty, stipulated in booklet No. 2 cannot be opposed to Kravitz’s claim against GM.

3) The third question is whether Kravitz can exercise a direct remedy against GM based on the legal warranty against latent defects resulting from the sale b/w GM and Plamondon. In other words, the question is whether the warranty has effect only as b/w the immediate parties to the k or whether it can also benefit a subsequent purchaser or the thing sold. YES. When a sub-purchaser acquires ownership of the thing he becomes the creditor of the legal warranty against latent defects owed by the first seller to the first purchaser. He may proceed directly against the first seller for both cancellation and damages. - the theory of relativity stated in art. 1023 C.c (1440 C.c.Q) was subject to the

exceptions. The exceptions to the rule are based primarily on the interpretation of arts. 1028 to 1031 C.c (arts. 1443, 1444, 1441 and 1627 C.c.Q). The rules differ depending on whether a right or an obligation is involved. While it is generally true that a k binds only the contracting parties, and their successors either universal or by general title, this does not necessarily mean that a k can never benefit a successor by particular title. Indeed, it seems to have always been recognized that some rights are so closely related to a thing that they can benefit only its owner.

- In France, the seller is liable on the warranty (whether the warranty against latent defects or that against eviction) not only to his immediate purchaser, but also to any susequent purchaser of the thing. => the doctrinal comments:

a. Pothier stated that successors by particular title benefit from the stipulations pertaining to the thing they acquire.

b. Lepargneur pointed out that “in the case of a personal right that is an advantage for the thing transferred and is so closely related to it that it cannot be exercised without the thing, common sense also seems to support the view that the purchaser should be allowed to enjoy this right, even without a special agreement.”

c. Aubry & Rau: “the successor by particular title enjoys … all the rights and actions which have been identified with the thing as its active elements or which have become its accessories.”

d. where an obligation is identified with the thing transferred or is the accessory thereof, the successor by particular title of the first seller is not regarded as a third party, and it is considered normal that he be automatically substituted for the previous creditor of such obligation.

e. The warranty against latent defects, like the warranty against eviction, is clearly an accessory of the thing sold. “For a long time and in accordance with the general law, the courts have held that the obligation of warranty is transferred to the creditor’s successors” (C.B. 192). The sub-purchaser can bring this action

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directly against the original seller, because the action is tied to the thing sold as one of its accessories. The obligation to answer for latent defects is inherent in the sale, and the action designed to ensure performance of this obligation is transferred, as an accessory, to the holder of the thing sold.

f. This solution as to the transfer of the warranty against latent defects is also valid as regards the warranty against eviction.

CONCLUSTION: there is no express decision of the higher court in Quebec. Even thought Anglin J. held the same position as the French counter-party in Ross v. Dunstall, his comments are just obiter. However, we must acknowledge the existence of a direct remedy in warranty by a subsequent purchaser against the original seller. A claim in warranty against latent defects is not one that is personal to the purchaser in the sense that he is entitled to it intuitu personae; the purchaser is entitled to it as the owner of the thing. It is a claim that is tied to the thing to which it relates. It is therefore transferred to the successors by particular title at the same time as the thing itself, in that the initial seller is liable on it to any purchaser of the thing sold. NOTES: - At end of the day, Pratte J created a new exception as to art. 1023 C.c (1440 C.c.Q). - There are some interest debates, such as the warranty against latent defects is a personal

right or real right. - Jukier seems to be not satisfied by Pratte J’s interpretation that the warranty against latent

defects is a real right (an accessory of the thing sold).

Les ayants cause à titre particulier: Baudouin –p.380Les ayants cause à titre particulier = successors- L’ayant cause à titre particulier est celui qui reçoit de son auteur un droit ou un

bien spécifique et déterminé soit entre vifs, soit à cause de mort.- L’acheteur, le cessionnaire, le légataire ou le donataire d’un bien.

- Contrairement aux héritiers universels ou à title universel, ils ne continuent pas la personnalité juridique de leur auteur.

- Les ayants cause à titre particulier sont des tiers à l’égard des contrats relatifs au bien ou au droit transmis par leur auteur.

- Cependant si le contrat passé par l’auteur lui confère des droits réel, ce contrat profite alors aux ayants cause à titre particulier avec la même étendue et les même limitations, puisque, de par sa nature même, le droit réel suit le bien et est opposable à tous.

- Il en est même pour certains droits personnels. - L’article 1442 C.c.Q introduit le principe de la transmission aux ayants

cause à titre particulier des droits personnels, acquis par l’auteur, s’ils constituent l’accessoire du bien qui leur est transmis ou qu’ils lui sont intimement liés.

- Le doit peut résulter d’une obligation contractuelle ou légale. I.e. la garantie contre les vices cachés dans le contrat de vent est transmise au sous-acquéreur.

- Le principe de l’article 1442 est destiné à jouer un rôle important pour la protection des sous-acquéreurs et à recevoir une interprétation plutôt large.

- Le principe est complété par des mécanismes comparables dans des contextes particuliers (dans la vente et dans le doit de la consommation).

- L’ayants cause à titre particulier, par contre, ne sont pas tenus des obligations personnelles résultant d’un contrat conclu par leur auteur, à moins qu’ils ne s’y engagent.

D. Jutras, “Le tiers trompé (à propos de l’affaire Bail ltée)” (1993) 72 Can. Bar Rev. 28.- The main issue in this essay is that “on what basis can a third party complain about the

conduct of a contracting party?”

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- There are two strategies to deal with this question: first, “il peut prétendre qu’il n’est pas vraiment un tiers, et se fonder sur le contrat: it faut alors élargir le cercle contractuel pour lui donner raison”; second, “il peut reconnaîre qu’il est un tiers, et son recours est, dans ce cas, délictuel ou quasi délictuel”.

L’élargissement du cercle contractuel- Entre les parties à un contrat et les personnes qui lui sont totalement étrangères, le droit civil

indentifie un autre groupe de personnes. Ces “faux tiers” disposent d’une action directe, qui leur permet d’invoquer en leur faveur. I.e.

- Sub-purchaser in Kravitz; - Stipulation for another;- Article 1442 C.c.Q: successors by particular title; - Concept of “a group of ks”, which have forged k-ual links b/w the subcontractor and

the owner, in French (not the law in Quebec). - Bail did not fit in all of above categories, the solution in Quebec is that “le rapport contractuel

(maîre/entrepreneur) et le rapport extracontractuel (maîre/sous-traitant) étant distincts, c’est l’image d’un triangle qui s’impose, et qui remplace elle du cercle.”

Le constitution du triangle - Le tiers peut invoquer l’existence du contrat et son inexécution comme des faits juridiques. - Méthordes:

- Le contrat comme point de départ: identifier les devoirs résultant du contrat, et à déterminer lesquels, parmi ces devoirs, peuvent fonder une responsabilité quasi délictuelle à l’égard d’un tiers. - Toute faute contractuelle ne constitue pas nécessairement un délit ou un quasi-

délit. - Le manque de diligence dans l’exécution de ces obligations purement

contractuelles n’engage pas la responsabilité quasi délictuelle de débiteur. - Par conséquent, dans le meilleur des cas, il n’y a que certaines obligations

contractuelle qui engengrent un devoir légal parallèle et symétrique. Il ne s’agit pas de chercher dans le contrat des devoirs qui puissent être transposés sur le plan extracontractuel, mais de déterminer quels sont les devoirs légaux qui résultent de la relation distincte qui existe entre le contractant et le tiers.

- Le contrat exclu de l’analyse: il faut donc s’assurer que le devoir invoqué par le tiers existe séparément dans le domaine légal. C’est le cas, notamment, quant la loi impose un devoir de prudence dont le défendeur autait été tenu même en l’absence du contrat. It faut déterminer si le défendeur aurait eu un devoir de prudence à l’égard de la victime si le contract n’avait jamais existé.

- Le contrat comme context factuel: ce méthord consiste à se demander si le contractant s’est comporté, à l’égard des tiers, comme l’aurait fait une personne raisonnable placée dans les mêmes circonstances. - 1) si le défaut d’exécution de l’obligation contractuelle comporte une menace

pour l’intégrité physique ou les choses matérielle d’autrui. - 2) dans l’appréciation des devoirs des contractants à l’égard des tiers, tient aux

caractères du fait préjudiciable. → s’il apparaît que le ocntractant, agissant de mauvaise foi, a porté atteinte aux intérêts du tiers en toute connaissance de cause, ou même avec l’intention de nuire.

- 3) l’omission qui prend la forme d’une inexécution contractuelle peut quant même, dans certains cas, engager la responsabilité civile du contractant lorsqu’un rapport particulier s’est créé entre celui-ci et le tiers. → legitimate reliance

- conclusion: au delà de ces trois facteurs, dont le rôle dans la création de devoirs légaux pour les contractants n’est pas à négliger, il en existe probalement beaucoup d’autres, qu’il reste à analyser.

English Version

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Jutras goes through the Bail decision and assesses the state of the law with respect to liability of contractants vis a vis 3d parties – also an excellent discussion of the duty to informDuty to inform:- The SCC in Bail says that it is a fundamental obligation to self-inform and act prudently in conducting

one’s affairs. And, given that information is very valuable especially when no one else has it, the temptation to stay quiet and keep things to oneself is great. But, if silence is golden, it can also be very costly is it is one of those situations where it is a fault to keep quiet.

- We should be asking two questions: Can the victim who suffers an injury because of his lack of information complain about not being told? On the other hand, did the victim perform his or her fundamental obligation to self-inform? These questions are always linked: it is a matter of determining who is responsible for the lack of information: the victim or the one who knew and didn’t tell.

- The SCC presents 3 criteria to guide answers to these questions:i) Did the defendant have real or presumed knowledge of the facts in question? Jutras says that in

essence, this means that you can only complain about the silence of those who knew or ought to have known. Those who have nothing to say do nothing wrong in saying nothing.

ii) Was the undivulged information determinative? This supposes two things: that the victim really didn’t know, and that the damage could have been avoided had she known. Jutras says a great many situations can be resolved having regard to this causal link. But, we are still left with the question as to when the person with the information has the duty to divulge in order to avoid the harm. In comes #3.

iii) The obligation arises when one party is in a vulnerable informational position. Such a position results either from impossibility for one party to obtain the information himself, or from legitimate reliance by one party on the other for information. It’s not just an obligation to say something, but to give accurate information. Erroneous or incomplete information is analyzed as a lack of information, as in Bail.

- the SCC presents a global theory of the duty to inform, the details of which remain to be worked out in relation to the particular circumstances of each case.

- in terms of a contract of enterprise, you look at the nature of the contract and the manner in which the parties envisaged their relations, who assumed the risk vis a vis insufficient information, what impact does the relative expertise of the parties have on their expectations of exchange of information in the formation and execution of the contract, these expectations, representations made by one party, do they amount to the other being in a vulnerable position? Thus, even within the same type of contract, the obligation can vary heavily according to the circumstances

- other questions remain as to whether we should distinguish between inequality of information power that results from the actions or conduct of the defendant or merely from the situation of the parties. When it is the conduct of a party that indices the other to have confidence in and to rely on his information, it is much easier to justify a duty to inform. In other cases, it is just a fact of the relative expertise of the parties and the nature of the contract. But, the court imposes a duty in both situations. But, in the latter case, it arises out of a duty of loyalty between the parties rather than one of altruism. In such a case, you would probably have to show that the one who withheld the information derived a profit from his silence or acted in bad faith in exploiting the other’s ignorance. But, this remains to be seen, because the court, in the circumstances of Bail did not have to decide this because it was the conduct of Hydro Quebec that induced reliance.

Liability to the 3d parties- But it was not the contracting party to whom the duty was clearly owed that was claiming damages in

this case, it was the sub-contractor who had no contractual relationship with Hydro-Quebec. The question the court had to deal with over and above duties of information was on what ground could liability of a contracting party

- The problem is the age old idea of the “relative effect of the contract” that arises, whenever the fact that generated the harm has a relation with a contract to which the plaintiff is not a party

- there are 2 ways to deal with this:1) enlarge the contractual circle: let some 3d parties have a direct action, such as in the case of the

subsequent purchaser who is given a direct action against the manufacturer, but this was not envisaged in Bail. There is no real continuity as there is in the previous example, there is no thing passed from one person to another that links all the parties.

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2) The triangle approach: third parties can assert the contract and the contractual fault as juridical facts. But, you can’t simply extend every contractual duty to a third party. There are 3 ways to deal with thisa) The contract as a starting point:

-identify the obligations resulting from the contract and determine which of these can found an extra-contractual obligation to a third party. It is obvious that legal duties and contractual duties will not coincide perfectly, and you cannot get around the problem by simply calling the recourse extra-contractual. Thus, unless we want to say that you undertake obligations to the whole world when you enter into a contract, we can’t say, without any other stipulations, that a failure to perform a contractual obligation equals a delictual or quasi-delictual fault. The court rejected this approach both in Houle and in Bail. You cannot equate contractual and extra-contractual fault. Contracts often create obligations that you could not demand of a person in the absence of that contract.-The SCC says that the 3d party cannot be indemnified unless there is an autonomous legal duty that he can establish and that has not been performed.

b) The contracted taken out of the picture-The duty has to exist separately in the legal domain, so from that starting point, the second approach would be to analyze the situation as if the contract never existed. But we can’t really do that either, because but for the contract, the 3d party would never have been in this situation. So, you can’t really analyze the duty as if the contract never existed

c) The contract as factual context-Thus, given that you can neither ground your claim on the sole breach of a contractual duty nor can you act as though the contract didn’t exist, the correct approach, and the one adopted by the SCC is to ask if the co-contractant acted towards the 3d party as a reasonable person would have in the same circumstances, where the contract is one of the circumstances that factors into the analysis-the parties have a duty to act reasonably in their relations with third parties, even if those relations flow from their contractual activity. The duty is fastened to the existence of the contract, but the duty to the 3d party is distinct from the duty that is owed to the co-contractant. -we have to force ourselves to separate contractual duties on the one hand, and legal duties that are tied to the existence of the contract, on the other-the norm of reasonable conduct requires the parties to take the legitimate interests of third parties into account in the exercise of their rights and the execution of their obligations that result from the contract.

- there are several things which still need to be worked out as the jurisprudence accumulates in this area such as whether the type of injury the third party suffered will be relevant, eventhough according to extra-contractual liability of should be, or whether bad faith or malice will be a decisive factor, eventhough in theory it shouldn’t have to be, whether it will matter if the third party has a contract with one of the co-contractants as in Bail, etc.

- Analysis of these types if factors will help us give content to this notion of the reasonable contractant that has now been incorporated into our law by the SCC’s decision in Bail.

Houle v. Banque Canadienne Nationale, supra at 165-167.- L’eureux-Dubé J in Houle: in summary, although contractual and delictual liability may

coexist even in the context of a contract, delictual liability must arise independently of contractual obligations and all the elements required to give rise to such liability must be found.

- The contract relationship, the obligations contained in the k and the failure to perform the k-ual obligations are all relevant circumstances in assessing delictual fault. It is necessary to determine whether the party whom it is sought to make liable behaved like a reasonable person toward the third parties, or in other words what the conduct of a reasonable contracting party would have been toward the 3Ps.

- In the k-ual context, the general duty imposed by art. 1053 C.C.L.C (1457 C.c.Q) is expressed as a duty to act reasonably toward 3Ps. A general duty of good faith in k-ual

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relationships, which derives from art. 1024 C.C.L.C. (1375 C.c.Q), has been recognized by the courts and by the legal authors. This duty of good faith derives from the same source as the general duty of good conduct set out in 1475 C.c.Q., and it goes without saying that a party to a k must conduct itself just as reasonably and with the same good faith toward 3Ps as toward the other k parties.

- The 3P is not seeking to appropriate to itself the benefit of an obligation which is not stipulated in its favor, but is seeking compensation for the damage caused to it by the delictual act of the k party; the 3P is asserting a right based on the k, but on the fault for which the k simply provided the occasion.

- It is entirely possible that the performance of a k may be the basis for an action in delictual liability against a k party, even in the absence of k-ual fault and without regard to the obligations set out in the k in question, if that party failed in its general duty to act reasonably.

- The parties to a k are therefore delictually liable for the damage which they may cause to 3P in the context of their k-ual relationship, by their failure to meet the standard of reasonable conduct in the circumstances of that relationship.

- While a k party may fail to meet its general duty to act in good faith and in a reasonable manner, notwithstanding the content of the k and the parties’ conduct in terms of its k-ual relationships, it is nonetheless indisputable that those two factors have an influence in assessing the delictual fault.

Caisse Populaire de Charlesbourg v. Michaud, [1990] R.R.A. 531 (C.A.).Causation could mitigate or relieve the wrongdoer’s liability Facts: Mr. Lebel needed a personal balance sheet of his finances in order to get a building contract, so he got his brother, an accountant, to prepare one for him. The accountant based his report on figures given by his brother, which were inaccurate and he did not verify the accuracy of these figures. Yet, the report had a subtitle “rapport de verificateurs” which would suggest that the information had been verified. Lebel used the same report to get a bank loan, and subsequently went bankrupt. Now the bank is suing the accountants because of the false information contained in the report.Issue: Did the accountant commit a fault? What is the nature of the fault? Did the fault cause the injury?Holding: Since there was no contract between the accountants and the bank, the fault can only be x-k. The accountant did not act as reasonable prudent accountant would have and thus committed a fault. But, the bank who is an expert in this area knew there was something fishy in the figures and should have checked. Moreover, had the bank known, they indicated that they might still have lent him the money, so there is no causation.Ratio: (This case brings together all the elements of professional duties, duties to inform, and liability to third parties)- If the accountants are not asked to verify the information and make it clear that the

information has not been verified, then they cannot be said to have committed a fault when their report is based on wrong information from the client

- but, in this case, the standard is not one of gross negligence but of the reasonable prudent and diligent accountant. It is the civil standard of extra-k liability because there is no contract.

- the first fault was in not making further inquiries into the information that was given- the second fault was in the ambiguity of the report itself which on the one hand led the reader

to believe the information had been verified, but on the other notes that it is possible that there is information that they didn’t have, so they can’t say if the report is accurate of not.

- Baudouin is very annoyed at this and says this is essentially like saying: we have acted professionally and expertly. However, everything we have said could be false, inexact, incomplete and thus does not represent the truth. A professional report is supposed to mean something to the reader.

- however, the expertise of the bank is undeniable, indeed they had questions about the report and thus proceeded to revise it asking for more information from Mr. Lebel. Moreover, they couldn’t say for sure that they wouldn’t have lent him the money anyway.

Notes:

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- this case is very interesting because it touches on all the elements that Jutras brings up, especially the conflict between the duty to provide accurate information and the duty to self inform, and how the relative expertise of the parties factors into the equation. – if the 3d party has any expertise, the reliance will be a lot harder to establish

- in this case, the accountants met two criteria of the Bail test: they should have known the information that was withheld, and they induced confidence in their report through their own statements. But, there was no informational vulnerability on the part of the bank who should have known better. Moreover, just as Jutras predicted, a number of these cases will be resolved at the causation stage: was the withheld info really the cause of the damage? In this case, no. Bank’s own negligence was a mitigating factor, as was the deceased’s in Poulin, and they probably would have lent him the money anyway.

- shows how although there is no “duty of care” limitation as there would have been in the common law (Hedley Byrne), causation plays the same role in limiting liability

- it also shows how they couldn’t avoid liability by saying there was no contract: the court found an x-k duty grounded in the standard of reasonableness

Wrongful life CasesClass notes: wrongful life doesn’t exist in QC law- in Cooke v. Suite, the parents were able to sue, because they didn’t want to have more kids and she had

the operation because they knew they couldn’t afford more kids- Chamberlain says there is nothing in public order that prevents this kind of claim: family planning is

the right of Quebeckers, so nothing prevents a claim for damages by the parents for the costs of the pregnancy

- the question is whether the child can sue: not in Quebec- in France, the “Perruche” decision allowed

-mother had rubella, doctor didn’t tell her that her baby might be handicapped as a result, she says she would have had an abortion had she known, so child is essentially suing for having been born-Cour de cassation allowed the child’s claim in x-k;-the legislator reacted and said no more actions for wrongful life clearly policy consideration

- Jukier says apart from public policy, there is an argument grounded in causation that limits this type of claim: there is no direct link between the fault and the damage: it was the rubella that caused the baby to be handicapped, not the doctor’s failure to inform – his failure to inform may have led to the baby being born, but he is not responsible for the fact that it is handicapped, nothing he could have done would have prevented the handicap

- in the case where the parents sue as in Cooke v Suite, the claim is contractual- What if doctor knows that the patient has a communicable disease, i.e. an STD: Is there an obligation

to third parties? If the patient’s partner contract the disease, does she have a claim?

CLASS 7 Unjust Enrichment Oct. 17

Art. 1493-1496 C.c.Q.

Art. 1493: A person who is enriched at the expense of another shall, to the extent of his enrichment, indemnify the other for his correlative impoverishment, if there is no justification for the enrichment or the impoverishment.

Art. 1494: the situations which the enrichment or impoverishment is justified: 1. From the performance of an obligation;2. From the failure of the person impoverished to exercise a right

of which he may avail himself or could have availed himself against the person enriched;

3. From an act performed by the person impoverished

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-for his personal and exclusive interest or -at his own risk and peril, or -with a constant liberal intention.

Art. 1495: An indemnity is due only if the enrichment continues to exist on the day of the demand.

-both the value of the enrichment and that of the impoverishment are assessed on the day of the demand;-the exception when the enriched person was in bad faith, the assessment could be based on the time the person was enriched.

Art. 1496: action against the 3P by the person impoverished: 1. when the person enriched disposes of his enrichment gratuitously, with no intention of defrauding the person impoverished;2. the 3P beneficiary could have known of the impoverishment.

General Introduction: - L’enrichissement injustifié : n’est ni un régime basé sur la faute ni contractuel : il est entre les 2, c’est

un régime autonome d’obligations ou quasi-contrats. Nom bizarre puisqu’il y a une ressemblance avec les K –voir Terrasses et Viger

- Le principe qui régit les relations K’elles en terme de protection est celui de protéger les attentes des partis alors que unjust enrichment est plus un fait juridique qu’une action juridique.

- Until 1994, there was no codal reference at all. CCQ was completely silent on unjust enrichment. Viger [1977] and Soucisse [1981] are sources of jurisprudential codification creating an obligation of good faith and a rule for equity: principle being that “ nobody can be enriched w/o justification”

- Today, the principle of unjust enrichment has been codified in art. 1493 – 1496- Art. 427 is also based on unjust enrichment from a spouse to another one where a compensatory

allowance after divorce is given to compensate enrichment of one patrimony to another one. ! but this only applies to married couples. De facto unions have a remedy only if unjust enrichment is proven (see Langevin case)

- unjust enrichment can apply to: family situation w/ children, common law spouses, commercial settings.

- It seeks to re-adjust patrimonies at the expense of others.- Issue: should it be neutral or should we penalize parties if they’re at fault? Some say yes others no (see

French article).

6 criterias of unjust enrichment are established in Viger1) enrichment: doesn’t have to be money all the time. Can be added value to property (Trottier and

Viger) or free work from son or common law spouse. In corbeil they could not establish a link btwn her impoverishment and his enrichment. But an expense that you avoid can also be classified as an enrichment = means that enrichment can be positive or negative. L’accroissement peut provenir d’un enrichissement + ou -, selon qu’il s’agit d’un gain direct ayant augmenté le patrimoine de l’enrichi ou d’une perte ou dépense évitée que ce dernier aurait normalement subie si l’appauvri ne l’avait pas supportée à sa place.

2) Impoverishment :If + you expensed $ for resources (Viger) or you relied on future interests (Langevin) = diminution du patrimoineIf – you’re not getting paid for the work you’ve done (ce que dit Corbeil mieux illustrée par Terrasses) = manqué à gagner. In all these cases, creditors are impoverished.Tout comme l’enrichissement, l’appauvrissement doit s’évaluer en $ et s’apprécie au jour de la demande et non au jour ou a été subi.

3) Correlation btwn the 2: that’s the link that was missing in Corbeil but well established in Trottier. We cannot prove that Co got enriched by virtue of her work. In fact he got enriched but

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not the Co. Had she sued him instead of the Co she might have won. Comptoirs no good target. This case shows that you can’t have a situation where the link is indirect. However, when you look at Viger, it seems that this correlation doesn’t need to be direct, so how did we obtain this result with Corbeil?

Baudouin répond en disant: il n’est pas nécessaire de recourir au concept traditionnel de la causalité ni de rechercher si l’appauvrissement a été la causa causans ou causa proxima de l’enrichissement. Il suffit juste de démontrer une correspondance entre les 2 que sans cette enrichissement, l’appauvrissement n’aurait pas eu lieu. La détermination d’un lien de causalité serait une Q de fait laissée à l’appréciation du tribunal.

Ici Giguere never paid Viger (benefited)= Corbeil Saumure

K1City K2

Here she could not win b/c even if indirect Comptoirs has not been enriched it’s Saumure. Also love failed the all thing b/c justifies her motivation. Not like viger. This link shows that you only get what you lost. In Terrasses he lost his time but relied on a promise that’s recognized in 1395 (promesse explicite)

Trottier: be careful. The son didn’t get his reliance. The goal of unjust enrichment is to equilibrate patrimonies: he only gets what the father got enriched about and not his reliance (x days passed on the farm) so if you’re lose 100$ but father gets from you 40$ you’ll only get those 40!

4) Absence of justification.C’est en général l’objectif de l’avocat: de tuer l’action ici c-a-d de trouver une raison qui justifie cet enrichissement.Facilement prouvé par un K, obligation légale, agir pour son propre I ou risque, intention libérale.Le cas du K:

a) If you contract to sell your car 5000$ and you screw the buyer, that’s ok. Unjust enrichment cannot do anything b/c you have a remedy in law of K. In Viger, they couldn’t ask for this remedy b/c K was void, ends up to be invalidated!

b) If I donate my time and effort to you and that I get empoverished, it’s intention libérale: I agree to do s/t for you for free. If it’s proved action for in rem verso fails. Q: how do you distinguish in such personal situations btwn intention libérale and expectations [1395] like Trottier? A: She says she has a problem with Langevin, b/c – justement- the guy said that he did that in the expectation to have half of the house. Difficult to reconcile with Corbeil (?)

c) Acting at your own risk: very controversial

5) Absence de fraude à la loi: if you try to evade the law: you can’t avail yourself to exercise a right against the enriched one that you could have exercised in a reasonable period. You can sue someone for a right that you already had before [1494]

6) absence d’autres recours: if other remedy, unjust enrichment fails. Should Giguère sue the city Xtra-K’ally in torts he would not have the remedy of u.e.

Both are other reasons for justification.

Conclusion de Jukier: la notion de faute du parti appauvri.L’enrichissement injustifié ne devrait pas punir celui qui s’est appauvri, c’est une action neutre et objective. She says that in Giguère, Mr. Justice asks if Giguère was in fault but there was no way he knew. This still opens the door to s/t that’s blamably wrong for empoverished parties: was he at fault??=> courts still look at it.

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Cie immobilière Viger v. Giguère inc., [1977] 2 S.C.R. 67.FACTS: - two agreement b/w the town of Plessisiville (‘Plessisville’) and the appellant Viger: a notarial

deed (DP-4) on Aug. 10, 1966 AND P-15 agreement on Oct. 15, 1966. Both of the agreements included that it was at Plessisville’s “sole expense” to improve the lands sold.

- A k b/w Plessisville and the respondent Giguère on Aug. 25, 1966, in which Plessisville awarded Giguère the k of levelling.

- Later it was found that the agreements DP-4 and P-15 were null b/c, in undertaking to pay the cost of improving the lots, Plessisville was granting a benefit to Viger, thereby contravening the Municipal Aid Prohibition Act.

- The levelling k b/w Plessisville and Giguère was found also null b/c it was never approved by the Municipal Commission.

- Plessisville had already paid Giguère part of money for the work done, a sum of $75,000, but it was not enough to cover the whole cost of work. Therefore, Giguère claimed the cost of work: the price of the work, the profit and the interest.

- The trial judge dismissed Giguère‘s action, while the court of Appeal allowed Giguère’s appeal and ordered Viger to pay Giguère the rest of the cost of work. Viger appealed the SCC.

ISSUE: the only issue here is whether the Court of Appeal was correct in concluding that Viger was unjustly enriched at Giguère’s expense? HOLDING: yes, the appeal was dismissed. REASONS: - the theory of unjustified enrichment is now undeniably incorporated into the civil law. French

adopted the theory at the end of 19 th century. In Quebec, both before and after promulgation of the Civil Code, case law implicitly but effectively applied the theory. The theory is no longer open to debate; discussion relates only to its theoretical basis and to the conditions of application.

- The Civil Code does not contain the whole of civil law. It is based on principles that are not all expressed there, which it is up to case law and doctrine to develop.

- The court then analyzed 6 conditions for the application of unjust enrichment in this case. - 1. An enrichment: Viger was clearly enriched by the value of the work necessary to improve

the lot. - 2. An impoverishment: Giguère’s impoverishment is material and positive – a reduction of its

patrimony.- 3. A correlation b/w the enrichment and the impoverishment: The theory of unjustified

enrichment does not require that the enrichment pass directly from the property of the impoverishment to that of the enriched party. The impoverished party looks to the one who profited from its impoverishment. It is then for the enriched party to find a legal justification for its enrichment. indirect correlation and the shift of burden of proof.

- 4. The absence of justification: the divergence of opinion b/w the trial judge and the court of appeal.

-here the SCC separate the ks that Viger relied on to justify its enrichment and the real cause – the promise of aid made by Plessisville to Viger. -“it was Viger’s and Plessisville’s intention that the aid, that is the levelling of the lots without cost, to the benefit of Viger, was to be guaranteed by the agreements b/w these two parties rather than by Viger’s ks of acquisition, which were only a formal stage in implementing the plan to set up the factory and the ks concluded b/w Plessisville and Viger.”-Viger’s ks to purchase the lots thus have an object other than the cost of improvement; further, the cause of Viger’s enrichment and Giguère’s impoverishment is not to be found in these ks – except by separating them artificially from the project as a whole. -the k concluded b/w Giguère and Plessisville is not intrinsically null, it was null b/c it did not meet the requirement of the formality. -the ks b/w Viger and Plessisville are null b/c the law states that municipal subsidies are contrary to the public policy.

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-in fact, Viger’s enrichment and Giguère’s impoverishment have a common origin in the agreement made b/w Plessisville and Viger, and this origin, far from constituting a justification, is clearly unlawful with respect to Viger.-it was unjust and unlawful that a 3P should have to bear the cost of an illegality of which it is innocent.

- 5. The absence of evasion of the law: - 6. The absence of any other remedy: the court here assumed a situation, in which Giguère

may claim based on other cause in stead of unjust enrichment. -“I doubt that the subsidiary nature of the action de in rem verso, if it exists, requires the court hearing the action to calculate the chances of success of an action for damages that the impoverished party might have brought against a party other than the enriched party, and to conjecture as to the possibility of executing a judgment thus obtained, if any. It would at least be necessary, for it to be so, that this other remedy be more apparent than it is in this case.

Loungnarath v. Centre hospitalier des Laurentides, [1996] R.J.Q. 2498 (C.A.) (edited).FACT: the k b/w appellant Loungnarath and the respondent hospital included a clause of arbitration clause. It is the law that the services supplied by applt. to the respt. hospital will be compensated by RAMQ, not directly by the hospital. In failing to get the compensation as to the fixed fees for specific medical services, the applt. sued the hospital based on the action of unjust enrichment. ISSUE: Was there unjust enrichment b/w the applt. and the respt.? HODLING: No. Action dismissed. REASON: here the judges followed the conditions set up in Viger v. Giguère by the SCC. Even though they all refused the action brought by the applt., there were still slightly different in interpreting the conditions b/w the judges. - An enrichment, an impoverishment and the correlation b/w them:

LeBel: it is clearly that the applt. was impoverished and the hospital was enriched according to the decision in Viger and Giguere. Fish: The hospital had no legal right – let alone any legal or moral obligation – to pay for those services in default of payment by the RAMQ. The RAMQ’s refusal to pay for the medical services in the case at bar has certainly impoverished the applt., but hardly enriched the hospital. Applt.’s loss was not their gain. Applt. seems to be entitled to compensation out of public funds for the professional services he rendered. Unfortunately, he cannot now exercise the wrong recourse against the wrong party merely b/c he failed to exercise in a timely manner the right recourse against his real debtor. Chamberland: les intimés ne peuvent pas s’être ainsi enrichis puisqu’il ne leur appartient pas, en vertu de la loi, de payer les médicins qui traitent les patients qu’ils hébergent; la loi leur défend même expressément.

- Absence of justification: there was the justification by the law – under which the hospital had the legal right not to pay the services that the applt. supplied.

- Absence of any other remedy: L’action de in rem verso n’a qu’un caractère subsidiaire, elle ne peut être admise qu’en l’absence de tout autre recours; elle doit être refusée losque l’appauvri disposait d’un autre recours, en l’occurrence le recours à l’arbitrage, qu’il a laissé prescrire.

NOTES: - the majority in this case did not find the hospital’s enrichment, b/c the hospital was identical

no matter the applt. got payment or not. - Here the legislation could also become a source of justification.

Trottier v. Trottier, [1992] R.J.Q. 2378 (C.A.).FACT: the son worked for the family farm almost gratuitously – only got living and eating in his parent’s house and the necessary clothes – from 17 years old and from then on until his father sold the farm to his brother. At that time, he was 30 years old and a single, with him an old bicycle, his clothes and $500. The son brought an action against his father based on the unjust enrichment and asked for the salaries that he could earn during his work in the farm.

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ISSUE: Was there the unjust enrichment b/w the father and the son?HOLDING: Yes. But the compensation should be based on the value the farm sold. REASONS: - the first 3 condition were established by the trial judge. Here the issue was whether there was

a justification. - In Viger and Giguere, the SCC held that “the impoverished party looks to the one who

profited from its impoverishment. It is then for the enriched party to find a legal justification for its enrichment”. Here the judge then concluded that “l’enrichissement du père est ici injustifié en raison même du fait que le fils n’a pas fourni sa prestation par pur esprit de libéralité.”

- Il me semble qu’en toute logique l’absence de justification doit d’abord s’apprécier en fonction de l’enrichissement. Pour qu’il puisse y avoir ouverture au recours de l’enrichissement sans cause, la première condition, je dirais la plus importante, me paraît être que l’enrichissement ait lieu sans juste cause.

- L’enrichissement de l’intimé revêt ici une multitude de formes. Le travaux de l’appelant n’one pas servi uniquement à maintenir la valeur de la ferme, mais à lui donner une plus-value certaine. Ils ont agumenté indubitablement la valeur du patrimoine de l’intimé.

- For the assessment of the enrichment and impoverishment, the judge here held that “le seul point de référence que nous fournit le dossier est l’offre de dédommagement faite par le père au moment où il s’apprêtait à vendre la ferme à son fils Martin.”

FACTS: At 17 the appellant abandoned his studies to work on the family farm without remuneration other that food and lodging, clothing and a meager allowance. After 14 years of this, when he was 30, his dad sold the farm to the dad’s brother. Basing his claim on the number of hours worked per wage of a farm worker, the appellant is here claiming 161 406$ from his dad. The trial judge found 5 of 6 necessary conditions. But “the impoverishment was justified by the hope of a recompense et so he was missing an essential condition.ISSUE: Is the hope of future compensation enough to negate the liberal intention that would justify an impoverishment/enrichment?HELD: The hope of a recompense constitutes in some way an absence of cause for, or at least a negation of the spirit of liberal intention- In the present case, the trial judge only considered “the absence of justification” with respect to the

impoverishment of the appellant. Having concluded that the father never made a formal promise, the judge held that the son consented to working for almost nothing in the hope [emphasis added] that the father would one day give him the farm in a maniere compensatoire.

- Citing Me. Taillefer: once a plaintiff renders services based on a promise or in hope of a recompense he would have the right to indemnification the value for unjust enrichment, all other conditions having been met.

- If the impoverishment was due to pure liberal intent, the enrichment would be justified. If however there was a hope of recompense, as in this case, the enrichment of the other would not be justified.

- It is evident that without the services of the appellant, the respondent would not have had such an appreciation of his patrimony. He admitted that he would have had to hire a farm hand to fill the position.

- The impoverishment cannot exceed the enrichment since to my mind there must be a correlation between the two. This was a sale that was not at arm’s length so the actual sale price is not the actual value. There is no way to determine the actual value. Our only point of reference was the offer from the father to sell the farm to his son for 43 000$. So we’ll award 43 000$. [he should have bought and sold the farm at a profit].

M. Lecene-Marénaud, “Le rôle de la faute dans les quasi-contrats” (1994) R.T.D.C. 515.- Le rôle tenu par la faute de l’appauvri dans les quasi-K dépend directement des rapports que

cette faute entretient avec la cause de l’appauvrissement du demandeur.

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- Elle dit que la faute est la cause qui justifie l’appauvrissement car lorsqu’elle est commise par le demandeur, ça prive celui-ci d’une indemnisation qui sans cette faute aurait été tenue comme pour légitime.

- Le principe général est que nul ne doit s’enrichir injustement au détriment d’autrui. Elle joue un peu l’ironie en disant que celui qui a commis la faute par le principe que l’on voit ne semble pas être digne de mériter l’équité.

- Sa thèse : même si celui qui est appauvri réclame une réparation, elle ne lui sera pas accordée s’il a commis une faute : la faute légitimise donc l’appauvrissement même si le défendeur s’en trouve enrichi.

- Ceci explique la double fonction de la faute de l’appauvri :1) on punit2) on fait de la morale

- La conséquence de ça est qu’en sanctionnant l’appauvri fautif on imprime un aspect moral à l’action in rem verso ( action par laquelle celui au détriment de qui une personne s’est enrichie sans cause réclame les sommes qui lui sont dues, jusqu’à concurrence de cet enrichissement = action in recovery of unjustified enrichment) alors que le but de cette action est d’équilibrer les 2 patrimoines.

- Apparemment, celui qui obtient réparation c’est lorsque sa faute ne contribue qu’à révéler l’absence de cause à son appauvrissement ou à minimiser son étendue.

- Pour l’auteur la maladresse du demandeur est parfois trop pénalisée et ce n’est donc pas normal car cela va à l’encontre de l’objectif du droit civil qui est de réparer et non de pénaliser quelqu’un.

Act juridique et fait juridique: Baudouin –p.40- Act juridique: est toute manifestation de volonté individuelle qui est destinée à

créer, modifier ou éteindre un droit. Il est fondé sur la puissance de la volonté individuelle, créatrice de droits et d’obligations.

- Le contrat; - Actes juridiques unilatériaux, qui résultent uniquement de la volonté d’une

personne et dans lesquels il n’y a donc pas échange de consentement. E.g. le testament.

- Fait juridique : est un événement qui entraîne des effets juridiques sans que ces effets aient été recherchés par l’individu qui en l’auteur.

- The different b/w these two : - Dans le fait juridique, les effets ne sont pas prévus d’avance par les

parties, mais prédéterminés par la loi;- L’individu n’est donc pas maître des conséquences que l’acte posé est

susceptible d’avoir.L’enrichissement injustifié: Baudouin –p.428- Depuis la codification de la notion d’enrichissement injustifié dans le chapitre De

certaines autres sources de l’obligation”, on peut désormais affirmer qu’il s’agit d’une institution autonome.

CONDITIONS- Enrichissement: d’abord prouver l’enrichissement du défendeur, enrichissement

qui doit encore exister, être certain et appréciable en argent, c’est-à-dire chiffrable, au jour de la demande.

- L’enrichissement peut prendre plusieurs formes: Des services rendus par l’appauvri à l’enrichi; Un accroissement matériel du patrimoine de ce dernier – cet accroissement peut provenir d’un enrichissement positif ou négatif, selon qu’il s’agit d’un gain direct augmenté la patrimoine de l’enrichi, ou d’une perte ou dépense évitée que ce dernier aurait normalement subie si l’appauvri ne l’avait pas supportée à sa place.

- Appauvrissement: il faut prouver aussi un appauvrissement du demandeur. Celui qui, par son acte, enrichit un autre sans s’appauvrir pour autant ne peut

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recourir à l’action de in rem verso. L’appauvrissement doit être susceptible d’une évaluation pécuniaire et s’apprécie au jour de la demande et non pas au jour où il à été subi.

- Une diminution du patrimoine – appauvrissement positif; - Une manque à gagner – appauvrissement négatif. E.g. un service rendu

mais non payé- En tout état de cause cependant, l’appauvrissement ne saurait résulter de

la volonté de faire une libéralité à l’enrichi ou de procurer un enrichissement sans espoir de retour.

- Relation de cause à effet: un lien de cause à effet, une corrélation, un lien de connexité suffisant doit exister entre l’appauvrissement et l’enrichissement.

- Il n’est pas nécessaire cependant de recourir ici au concept traditionnel de la causalité. L’exigence est beaucoup moins rigoureuse que dans d’autres domaines.

- Il suffit de montrer une correspondance entre les deux; en somme, que l’enrichissement ne se serait pas produit si l’appauvrissement n’avait pas eu lieu.

- Il n’est même pas nécessaire que l’enrichissement passe directement du patrimoine de l’appauvri à celui de l’enrichi: il peut y aboutir par l’intermédiaire de celui d’un tiers.

- La détermination de l’existence du lien de causalité demeure en pratique une simple question de fait laissée à l’appréciation des tribunaux.

- Absence de justification- L’action de in rem verso n’a été créée que pour permettre de pallier les

situations où l’enrichissement n’est pas réguler, c’est-à-dire non prévu, sanctionné ou même imposé par la loi.

- Sans raison juridique – sans justification légale ou conventionnelle. - Les situations indiquées à l’article 1494 C.c.Q- L’absence de justification s’apprécie par rapport à la personne enrichie.

Voir Trottier c. Trottier.- Exécution d’une obligation: une obligation légale, naturelle ou un acte

juridique. - Acte fait dans son propre intérêt ou à ses risque et péril - L’intention libérale: ou un contrat à titre gratuit

- Absence d’autre recours- L’action de in rem verso a un caractère subsidiaire. Elle ne pourrait être

admise qu’en l’absence de tout autre recours prévu par loi.- La condition de la subsidiarité du recours est, cependant, comprise

implicitement dans celle de l’absence de justification. - L’analyse de cette condition négative est difficile et il faut reconnaître que

le droit n’est pas toujours clair à ce sujet. Il est certes exact de dire que ce recours ne doit pas contreveneir à une disposition imprérative de la loi.

- L’action de in rem verso doit également être refusée lorsque l’appauvri disposait d’un autre recours qu’il a laissé prescrire. E.g. Loungnarath

CLASS 8 Remedies: specific performance and Performance by Equivalence Oct. 24

Art. 1590 and 1601 C.c.Q.

Art. 1590: the creditor could demand the obligation be performed in full, properly and without delay.

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When the debtor fails to perform his obligation without justification on his part and he is in default, the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalent,

1. force specific performance of the obligation;2. in the k-ual obligation, obtain the resolution or resiliation of the

k OR the reduction of his own correlative obligation;3. enforce his right to the performance of the obligation by taking

any other measur provided by law.

Art. 1601: a creditor may, in cases which admit of it, demand that the debtor be forced to make specific performance of the obligation.

Baudouin¶436 “Contrairement à la common law, on affirme en droit civil que le créancier a un droit fondamental, dans les cas qui le permettent, à l’exécution en nature de l’obligation contractuelle, c’est à dire, à obtenir directement ou indirectement la prestation prévue au contrat.”

Damages are only one form of execution among others, and the creditor is not legally bound to make do with damages.

¶800: In French law, specific performance seems to be the rule, whereas in common law it is the exception. Quebec law has had an interesting development. Older decisions seemed to echo the common law reticence of awarding specific performance and illustrated the common law preference for an award of damages. This has changed in recent years. Although the CCQ didn’t really change the law as it was under the CCLC, in article 1590 CCQ, forcing specific performance is the first option in the list. The right of specific performance is again repeated in 1601 CCQ. Baudouin says this indicates that the legislator really does consider specific performance to be on par with other remedies, and not an exceptional remedy that can only be invoked when damages won’t do.

¶805: Baudouin identifies four criteria which can be invoked by the courts in order to refuse an order of specific performance:1) Where the order would require unique or personal services of the debtor, most often in the case of a

physical person. This type of restriction normally doesn’t apply to a moral person, as in Aubrais v. Laval where police force is seen as a large public body, where individual candidates are not so much hired for personal characteristics but for the profile they fit.

2) When specific performance would be physically impossible, would create a serious danger, or runs contrary to a legal norm

3) When specific performance would unreasonably limit the rights of a third party. For example, if you has a lease for an apartment, but then a third party in good faith rented the same apartment, specific performance of the first contract would unduly prejudice the rights of the third party who in good faith rented that same apartment.

4) When the order for specific performance cannot be made with enough precision, such that it would be too difficult to identify who is in breach of the order and for what reason. You must be able to make clear proof of the violation, therefore the acts cannot be too complex.

Differenc Approaches as to the Specific Performance in CoL and CiL - Specific performance is an area with a very distinctive civilian philosophy. - It is one of the rare instances where two cases, one form the common law (Argyll Stores) and one from

the civil Law (Golden Griddle) can have virtually identical facts but have such different reasoning and produce such divergent outcomes.

- the remedy used to enforce specific performance is the injunction. The irony is that the injunction is a common law remedy that stems from equity.

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- However, whereas equity in the common law is supposed to be only secondary, where the law provides no sufficient relief, specific performance has been established as being on par with an award of damages in the Civil law.

- As noted in Argyll stores, “Specific performance is traditionally regarded in English Law as an exceptional remedy, as opposed to the common law damages to which a successful plaintiff is entitled as of right.” This is representative of the common law approach.

Transplant b/w the different legal systems- The case of specific performance provides an excellent illustration of the possible responses to the

question of what can happen when one legal system imports a concept from another. - Jukier says there are three possibilities:

1) RejectionNotes list 2332 CCQ as an example here, not sure why:2332 CCQ: In the case of a loan of a sum of money, the court may pronounce the nullity of the contract, order the reduction of the obligations arising form the contract or revise the terms and conditions of the performance of the obligations to the extent that it finds that, having regard to all the circumstances, one of the parties has suffered lesion.

2) Adoption and Blind application of the transplanted concept:- this is what first happened in relation to specific performance- until the 1980s, the QC courts basically just adopted the common law position

3) Adaptation to fit within the new system:-1994 Court of Appeal decision in Varnet Software v. Varnet UK, where the court stated that it is not because something is historically a common law procedural remedy that the restrictive approach of the common law to mandatory injunctive relief should be followed

- When you understand the mentality of an entire system; you will be in a better position to effect a successful transplant and integration of a concept. If you don’t understand the big picture of a system, it’s hard to fit in pieces.

- It is clear from 1590 CCQ that the right is not subsidiary, but codified and on par - The phrase “in cases which admit of it” from 1601, however, ended up limiting the scope of specific

performance- Jukier says that the civil law is based on the notion of will: voluntary undertaking of binding

obligations, and the supremacy of le droit subjectif- the common law, on the other hand, requires external ratification through things such as consideration:

some kind of “proof” of the binding- in civil law, consent is the tie that binds, respect for “la parole donnée”: pacta sunt servanda: binding

force of one’s agreement – if the will creates an obligation, that’s what makes it binding, there is no need for external evaluative criteria- the will dictates that as long as there is no defect, unfairness or bad faith, then the obligation must

be performed- therefore it gives the creditor the choice of a remedy: which ever is best to have the subjective will

enforced- In Aubrais v. Laval, you can see the court battling back against common law intrusion and making

decisions on their own, civilian, terms:“Aux termes de notre droit civil, le choix du recours appartient au créancier.”

- in actual practice, however, the words “in cases which admit of it” have been used to circumscribe the remedy

- What exactly is it that is happening that underlies those instances where you cannot enforce specific performance?a) Nemo praecise rule: you can’t do it if it requires physical force to get someone to do something

-this is what the courts say, but in point of fact, it doesn’t really hold up. Anytime you order someone to do anything, you are in effect restricting their liberty-this led to an even more artificial distinction between positive and negative obligations

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-essentially, this was just a way for courts to enforce specific performance when they wanted to by construing the obligation negatively, and not enforce it when they didn’t want to by construing the obligation positively-essentially, it did the same thing that consideration did for the common law, as argued by Atiyahex: Hockey association: Do not discriminate, is essentially let the girl play

Do not restrict access vs. Do take down the fence-the distinction invariably breaks down, there is just as much constraint involved in one as the other

- Jukier also disagrees that individuals are more constrained than corporations when specific performance is ordered

- Objections based on “supervision” argument-Jukier says, and Argyll Stores confirms that it’s not really about being able to “supervise” – courts never do this anyway, it’s whether the order for specific performance has enough precision that the parties will know what to do in order to respect the order, and the court will be able to recognize a breach should one occur… it’s about how to label a breach, how to know how to comply so as to avoid future litigation and uncertainty-exemplifies the goal of finality in litigation: a winner , a loser, clear outcome: that’s why common law prefers damages: you pay and it’s over

- Common law objection based on “hardship”: Golden Griddle case doesn’t buy this-this could be because both were sophisticated commercial parties, judge seems to make a big deal about that, but in Argyll stores, this type of argument is successful-Jukier says we should be looking from the perspective of the creditor, not the debtor, because the creditor is the one who’s entitled to the remedy. If we accept hardship it’s because we’re looking solely from the perspective of the debtor, and this isn’t fair: the debtor is the one who is in breach!Aubrais v. Laval: “Un element toutefois fort important dans les circonstances du présent litige a trait au caractère utile du recours pour le créancier.”-QC Courts look at the utility of the remedy for the creditor

- But, this theory of looking from the point of view of the debtor doesn’t really hold true: Quebec courts still adhere to the Nemo Praecise rule: if the personal services of the debtor are of the essence, specific performance will not be enforced. However, it is precisely when the services are of a personal nature that damages are an inadequate remedy.

- You would want specific performance because a third party could not perform the contract adequately, yet this is the biggest area of resistance. Moreover, if it is a personal service contract, you would expect this to be a contract of the essence of the will: one is not binding one’s money, but one’s own services, therefore the strength of the manifestation of the will should be even stronger.

- Yet, where common law and civil law Do agree is that these contracts are not enforced. At bottom, I think this is a good thing… when the relationship has broken down to this point, it’s best not to force the debtor to perform for the creditor, but from a purely theoretical point of view, it is highly inconsistent.

R. Jukier, “The Emergence of Specific Performance as a Major Remedy in Quebec Law” (1987) 47 Can. Bar Rev. 47.CCLC Article 1065 says a creditor may demand specific performance (SP) "in cases which admit of it." The 1897 CCP allowed prohibitive injunctions, to specifically enforce obligations NOT to do things, but there was no procedural remedy to enforce a positive obligation to do something until 1965, when the new CCP introduced the mandatory injunction in Article 751.  The two cases involving the plaintiff Propriétés Cité Concordia (PCC) illuminated the breadth of the remedy of SP in cases of positive obligations and the meaning of the phrase "in cases which admit of it."Facts: In Feb 1997, PCC leased two premises in its La Cité complex to the Royal Bank.  Both leases contained a clause that said the Bank would stay open during normal business hours.  The occupancy of the complex was lower than expected, so the Bank wanted to reduce its hours. PCC petitioned for an injunction to order the Bank to stay open 9-5 with minimum staff of three people.  In the first case, in 1980, the Quebec Superior Court (QCSC) dismissed this motion, saying there was a contractual breach but SP wasn't an appropriate remedy since to be effective

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they would have to make the Bank offer lots of personnel and services, and this would take too much supervision from the Court. This is a traditional approach for QC, but a new trend is emerging.

A. The Traditionally Restricted Ambit of SP: In theory, SP is the classic civil law remedy.  It's the principal remedy in France, and in Quebec doctrine says it's on par with damages, but in practice courts have applied it restrictively, especially where it involves an obligation to DO something.a. The Influence of the Common Law Approach to SP: QC judges have been

inclined to view the CCP injunction as a remedy borrowed from the Common Law, so they apply it restrictively the way Common Law courts do.  Many QC decisions have adopted the Common Law position that SP will not lie where damages are an effective remedy. Jukier says this judicial attitude should have no place in QC because it challenges the theoretical availability of SP as an equal remedy in Civil Law, and it challenges the principle that the creditor gets to choose his remedy.  The judiciary is finally acknowledging this contradiction, in Societe Coinamatic v. Armstrong (1984 QCCA) and Restaurant Jasmo v. Drouin (1986 QCSC).  There's a trend away from Common Law style application of SP, but recent jurisprudence hasn't been uniform.

b. The Nemo Praecise Rule: There's a rule in Civil Law against forcing a person to do an act by physical violence or constraint, because he'll only do a half-ass job anyway, and because it contravenes individual liberty.  But where the constraint lies on the debtor's property, instead of his person, the rule is not infringed.  In France, SP is granted for all obligations except artistic activities and personal services.  The SCC said in Nault v. Canadian Consumer Co. (1981) that a judgment can't order SP for a contract of sale of an uncertain or indeterminate thing. QC courts have said SP is only appropriate where the debtor could get a third party to do the required act.

c. The Dichotomy b/w Enforcement of Obligations To Do and Obligations Not To Do: The judiciary has created this illogical and artificial dichotomy, because of the 1897 CCP and the nemo praecise rule.  Jukier says it's unjustifiable because the nemo rule should apply equally to obligations to do and not to do, since both involve just as much personal action, and because it's often difficult to classify what's a positive and what's a negative obligation, as evidenced by inconsistent case law.

d. Problems of Supervision: It's harder to supervise an order to DO something.  In the Common Law, SPwill usually be refused where it would require a complex series of acts or the maintenance of an ongoing relationship.  This played a large role in the first PCC case, above.  But recent Common Law authorities don't see supervision as such a big problem anymore. Some say the real question is whether there is a sufficient definition of what has to be done to comply with the court order.  This liberal attitude is catching on in QC.

e. Civil Imprisonment: Doctrine argues against SP because failure to perform the SP order can lead to imprisonment for contempt of court, and there should be no imprisonment for civil matters, since the 1965 CCP was enacted.  Jukier says this is bunk because the imprisonment IS for the contempt of court, which IS criminal, not for the failure to perform, which is civil.  And anyways that argument never stopped courts from granting prohibitive injunctions, so why should mandatory injunctions be any different?

B. Emerging Jurisprudential Trends 1. The PCC 2 DecisionsThe second case was about that same operating clause; the Royal Bank wanted to close.  But this time, the QCSC and QCCA granted the mandatory injunction to keep it open, just one year after they had held the opposite. The Bank made the following arguments:(i) The operations were of too personal a nature to be susceptible of SP;(ii) The Court couldn't force the Bank to incur a deficit;

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(iii) The Court couldn't supervise the proper execution of SP.Hurtubise J. responded:(i) The Bank's a Corporation, so the nemo praecise rule is not infringed;(ii) The Court didn't really answer this, but Jukier thinks the argument's

bunk because a DF shouldn't be allowed to just fulfil its contractual obligations when they're profitable;

(iii) The obligation to resume operations was sufficiently clear and precise.

2. The Effect of the Second PCC Decisions Hurtubise J. spoke out definitively against the reliance by QC courts on the

restrictive Common Law position relating to SP.  The judiciary had been ignoring the legislator's intent, in the 1965 CCP, by keeping the restrictive approach.

CONCLUSION Three factors have expanded the availability of SP:(i) Rejection of the Common Law attitude;(ii) Erosion of the distinction between obligations to do and not to do;(iii) Recognition that forcing SP on a corporate body doesn't infringe the

nemo praecise rule.

Jukier hopes this trend will continue, because the creditor should get to choose his remedy, and SP will often be a better remedy for the creditor, because damages can take a long time to come through, whereas an injunction can have immediate results.  Also, commercial parties just want to continue operations, not get compensation.  Finally, SP is better because it enforces the Autonomous Will of the Parties, which is supposed to be the foundation of the Civil Law of contracts.

Jukier looks primarily at two decision involving Propriétés Cité Concordia [Concordia I and Concordia II) and argues that Quebec courts are rightfully moving away from the common law approach to specific performance towards an approach that is more consonant with civil law principles.

Although specific performance has always been available in theory in Quebec civil law, the bulk of jurisprudence up until the 1980s took a very restrictive view awarding it only in exceptional circumstances.

According to Jukier, “specific performance is the classic civil law remedy”, and doctrinal writers in Quebec assert that “specific performance is to be treated as at least on par with damages”. This can be attributed to the canonical influence imposing respect for the spoken word: pacta sunt servanda)

However, in practice, the courts have not given it the same weight it has in theory Since injunctions are borrowed from equity, where specific performance takes the form of a permanent

injunction, courts have been inclined to apply the common law approach. Jukier says, “this judicial attitude […] is erroneous and should have no application in the law of Quebec” because it restricts the choice of remedies that is supposed to be available to creditors

The Nemo Praecise rule is the primary reason invoked against specific performance: we are unwilling to force a person to accomplish an act if the only way to do so is by physical violence or constraint. Where the obligation is to deliver money or property, this is not seen to run afoul of the rule, and specific performance is not normally problematic.

Thus traditionally, Quebec courts would not order specific performance unless the obligation could be performed by a third party. In such case, the debtor would not be unduly restricted because he or she could perform the obligation by getting someone else to carry out the specific task required. In Tremblay v. Université de Sherbrooke (1973) the Court refused to order the school to continue offering a certain program, because this could not meaningfully be carried out by a third party. (it would be interesting to see if this would still be decided the same way today, seeing as the university is a moral person, and the courts seem to have moved in the direction of not recognizing the personal nature of obligations to be performed by corporations (ie. Aubrais v. Laval)

Judiciary also created an artificial distinction between obligations to do and obligations not to do. The latter were not seen as being as offensive to the Nemo Praecise rule, although the distinction is

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completely artificial and cannot withstand scrutiny. Jukier gives the example of two cases of fences being wrongfully erected: in one case, the order is framed as a prohibitive injunction, prohibiting the defendant from restricting access, in the other a mandatory one, forcing the defendant to take down the fence. Moreover, the Nemo Praecise rule applies equally to both. To do or not to do something is a restriction of liberty. For example, an order to cease violating a non-competition clause.

The fact that both offend Nemo Praecise and that the distinction is so artificial means that any attempt to make legal distinctions based on positive or negative framing of the obligation should be abandoned.

Another influential reason for withholding specific performance has been the concern with “supervision”, which is at bottom a concern with the specificity of the order and the ability of the court to recognize and sanction a breach should one occur

Concordia I followed the traditional restrictive approach of the courts. However, in Concordia II, only one year later and on virtually identical facts, involving the same parties, the Superior Court ordered the Bank to continue carrying on its operations on a daily basis.

Bank’s argument was threefold:1) operations were of too personal a nature: Hurtubise J rejected this, citing two earlier unreported

decisions in Chrysler and Loews Hotel, and making a distinction between contracts entered into by individuals and contract entered into by corporations. Jukier agrees with this distinction because, although corporations act through individuals, the order does not require specified individuals to perform. If, however, it is a closely held corporation, or there are only a few limited employees who could perform the obligation, the rule may be offended.

2) Court couldn’t force bank to operate at a deficit: this was not directly addressed, but since they lost the case, it’s fair to say the judge didn’t buy it. Jukier says this should be rejected because it gives inappropriate protection to parties who enter into bad bargains. Removing recourse when the obligation becomes disadvantageous offends pacta sunt servanda and deprives the creditor of his right to choose the remedy. Jukier says that while it may be appropriate to protect a party from incurring a deficit in the provision of a public service, “it is not reasonable to protect a contracting party who was on equal bargaining footing with his co-contractant, and simply entered into a bad bargain.” (So, in Golden Griddle, if the parties had not been both sophisticated businesses, but rather an independent restaurateur opening her first business, arguably specific performance might not have been so readily enforced.)

3) Order would require too much supervision: Court rejected this too – as long as obligations are sufficiently defined, supervision will not bar an order for specific performance. Jukier says courts are often relaxing this requirement which would have previously barred many claims for specific performance. However, Jukier draws a distinction between cases where the debtor asks to have an obligation performed, and cases where the debtor wants the obligation to be performed adequately. She gives the example of Favre v. Hopital Notre Dame (1984) where court ordered hospital to continue providing health services to a patient and C v. Hopital Q (1983) where court refused request for an order to provide adequate psychiatric treatment. The court said an obligation of means as compared to an obligation of result was too difficult to monitor. Personally, I think this is also an artificial distinction: especially in cases of medical treatment… in the first case, wouldn’t the adequacy of the treatment be implicit in the order?

Jukier’s conclusions: three factors which have contributed to expansion of specific performance: a) rejection of common law attitude that specific performance is a subsidiary remedyb) gradual erosion of artificial distinction between obligations to do and not to doc) reluctance to apply Nemo Praecise to corporations

Jukier worries about Mailhot, J’s 1986 decision in GMBH v National Trust, which denied an order for specific performance. Mailhot J discussed the Concordia II decision, and seemed to give it a reading which greatly restricted its scope to the particular facts of the case. Jukier hopes that this case will not end up being read so restrictively, but will instead signal an emerging trend in Quebec jurisprudence.

Interestingly, however, in Golden Griddle, the case which cites Jukier’s article, it is GMBH which is read down and distinguished on its facts.

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Cie de Construction Belcourt v. Golden Griddle Pancake House, [1988] R.J.Q. 716 (C.S.).Facts: Owners of a mall wanted to make a tenant conform to its contract of lease by reopening a restaurant it had closed because of insufficient profits.  Golden Griddle (DF) counter-claimed for cancellation of the lease, on grounds of representation, but the Court thoroughly squashes this counter-claim.Issue: Is this a "case which admits of" a mandatory injunction, under 1065 CCLC?Holding: Yes. Court orders a permanent injunction forcing DF to reopen and maintain restaurant services during normal business hours, and to pay arrears in rent.Ratio: - An injunction must be distinguished from other remedies available to the creditor of an

obligation because it is an equitable remedy.  It imposes a duty, the violation of which constitutes contempt of court.  So even though DF specifically wrote into the lease that breach would give rise to SP instead of damages, it's still up to the court's discretion whether to use this remedy.

- The recent doctrine of QC confirms that 1065, 1610 and 1628 CCQ give the creditor the option of requiring SP "in the appropriate cases".  (Here the Court cites Jukier's concluding paragraph about how SP enforces the Will of the Parties.)  The court should determine "appropriate cases" by substantive law and objective criteria, NOT hardship and personal consequences. 

- Cases which do not admit of SP are usually situations where the performance of the obligation has become virtually impossible, when the time within which the obligation was to be performed has elapsed, or the property to be delivered has perished or is no longer in the patrimony of the debtor. 

- The judge has to consider the nature of the act, the personality and capacity of the debtor and the enforceability of the proposed order.

- The nemo praecise rule should not be extended to encompass an order to compel the performance of obligations by moral persons who by their magnitude transcend the will of one person.

- There's precedent for this in Loews Hotel v. PCC and in the two PCC v. Royal Bank cases, which also note that the judge has discretion over whether SP is appropriate in the circumstances.  Avis Immobilier G.M.B.H. c. National Trust (1986) took a more restrictive approach to SP, but the court distinguishes that case on the facts.

- Golden Griddle argued that SP would not be appropriate here because it would violate a "balance of hardships" consideration.  The court squashes this by citing Brasserie Labatt v. Ville de Montreal (1987) which said the hardship of a person who has breached a contract can't be weighed against the hardship of the plaintiff.  The court should only take into account hardships SP would cause to a third party.

- The act to be performed can be readily defined and assessed, and if GG stays open it won't want to do a half-ass job because that would destroy the value of its trademark, so there's no problem of ensuring compliance.

Co-operative Insurance Society Ltd v. Argyll Stores (Holdings) Ltd, [1997] 2 W.L.R. 898 (H.L.)Facts: PF leased a unit in a shopping centre to DF with a clause to keep the store open during local business hours.  DF downsized, and this store was one of many that they closed.  PF asked DF to keep store open until they could find someone to assign the lease, and offered to negotiate a temporary rent concession.  DF didn't respond.  PF brought an action seeking SP and/or damages.Issue:  Is SP appropriate here?Holding: No.Procedural setting:- The trial judge refused to order SP, because it's "settled practice" that Common Law courts don't force DFs to run businesses; it's hard to enforce such a complex order; it's beyond the

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scope of the court to make a business run at a loss; making Argyll reopen would be really expensive; and it would be possible to assess damages in this case.- The Court of Appeal overturned this and ordered Argyll to keep the store open. Here, the HL restores the trial judge’s order of damages instead of SP.Ratio:- There is definitely a settled practice. Is it justified?  The most frequent reason given is that an

order to carry on a business would require constant supervision by the court, in the form of rulings by the court, on applications made by the parties, as to whether there had been a breach of the order.  Also, the threat of punishment for contempt of court is too powerful a weapon to use here, because it's hard to run a business, which is already at a loss, while there's a constant threat of imprisonment if you don't run it adequately.  Courts are much more likely to order SP to produce a specific result than to make an order to carry on business operations.  It's a matter of judicial discretion whether an order would be "precise" enough to be an appropriate subject for SP.

- The HL seems to like a "balance of hardship" type argument: "the loss which the DF may suffer through having to comply with the order ... may be far greater than the PF would suffer from the contract being broken."  It's true that it's the DF's fault - "but the purpose of the law of contract is not to punish wrongdoing but to satisfy the expectations of the party entitled to performance."

- Finally, it can't be in the public interest to force hostile parties to stay in a relationship.  It's better to award damages because it brings the litigation to an end.  So the settled practice is justified.

- The Court of Appeal said (like the QCSC in Golden Griddle) that once Argyll reopened the store it wouldn't do a half-ass job.  HL responds that the judge shouldn't speculate about this, and the question of certainty must be decided on the assumption that the court might have to enforce the order according to its terms.  Also, both landlord and tenant here are large sophisticated commercial parties and both were aware that the remedy for breach of contract was likely to be limited to an award of damages.  No doubt there was an effect on the surrounding stores, but neither Argyll nor C.I.S. warranted to them that Argyll would keep its store open.  This was a commercial risk the surrounding stores took on themselves, and they could take into account when negotiating their next rent review.

Notes: virtually identical facts: supermarket chain has a lease in a shopping Mall which contains a clause

requiring continuous operation of the store for a certain number of years. Chain decides to downsize and close a few stores including that one. Mall sues to force performance.

House of Lords produces almost opposite reasoning. They seem to sanction efficient breach, stating that “although Argyll had knowingly acted in breach of a convenant, they did so in light of the settled practice of the court to award damages.”

Court rejects the notion that since it is in Argyll’s interest not to run the store half-heartedly, compliance with the order will not be difficult to enforce. In sharp contrast to QC decision in Golden Griddle, they write, “This treats the way the tenant previously conducted business as measuring the extent of his obligation to do so. In my view this is a non sequitur: the obligation depends on the language of the covenant and not on what the tenant has previously chosen to do.”

The House of Lords is not willing to impose unquantifiable loss on the defendant. Argyll found it to be most efficient to close the store and pay the damages. This law or practice on this point is settled, and business decisions are planned accordingly.

Moreover, an order of specific performance places the plaintiff in an unfair bargaining position. The benefit of specific performance may be far less than the detriment it will cause to the debtor, thus the creditor can demand more than what he would have gotten in damages because the creditor will want to get out of the obligation. “A remedy which allows him to secure, in money terms, more than the performance due to him is unjust.” (But arguably allowing the debtor to pay less than the obligation to perform is worth to him is also unjust.)

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Aubrais v. Laval, [1996] R.J.Q. 2239 (C.S.) (edited).Facts: Aubrais failed to disclose the fact that he had attempted suicide on his police application. The questionnaire simply asked a general question about psychological problems. When police force found out, they cancelled his contract due to the alleged misrepresentation. Court said question was so general, that they could not have expected a specific response, therefore no misrepresentation. Issue: Given that the contract should not have been cancelled, is an order of specific performance which would require the police force to employ Aubrais, an appropriate remedy?Holding: Yes. Civil law gives the choice of remedy to the creditor. Obligations are not too personal in nature in this case, and damages would not be useful to Aubrais who really want to be a police officer.Ratio: Court surveys doctrine and jurisprudence and comes to six basic conclusions:1) The issuance of mandatory injunctions has to be integrated into the civil law according to the

principles which underlie it2) The possibility of the execution of the order, the personal nature of the obligations, and the

concept of personal liberty can be taken into account to determine if it is a “case which admit of it”

3) The distinction between order to do and not to do is artificial and should not guide the court’s decision. Rather the court should be guided by the appropriateness of the remedy in each given circumstance, having regard to whether the order is precise enough to be followed

4) The personal nature of an employment contract is something to be evaluated on a case by case basis, it is a question of fact to be determined in the circumstances which must be proved by the party who invokes the personal nature of the contract. The size of the enterprise and the nature of the work to be performed by the employee are relevant considerations.

5) The concepts of liberty and the idea that you cannot force someone to perform an obligation are not absolute. These vary according to the size of the organization and whether it is a corporation. The utility of the recourse for the creditor is a relevant consideration.

6) The object of these considerations is uniquely to determine whether or not it is a case which permits specific performance.

Applying these to the case at bar, the court finds that although employment contracts are traditionally considered to be of a highly personal nature, in this case the police force is a large entity, where the work would be carried out within a very large force with several other police officers. Moreover, Aubrais was hired not so much because of his own personal characteristics, but because his characteristics fit the profile of what the force was looking for. Moreover, damages would not be useful to Aubrais who clearly went to great lengths to get this job and wants to be a police officer.

CLASS 9 Remedies (Continued): Loss of Chance Oct. 31 Art. 1457, 1458, 1607, 1611, 2804 C.c.Q.

Art. 1457: general duty

Art. 1458: k-ual parties could opt out the k-ual rules to restore other rules.

Art. 1607: The creditor is entitled to damages for injury, which is an immediate and direct consequence of the debtor’s default.

Art. 1611: The awarding damages are the loss sustained and the profit deprived by the creditor. Only certain and assessable future injury could be taken into account.

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Art. 2804: Evidence is sufficient if it renders the existence of a fact more probable than its non-existence, unless the law requires more convincing proof.

How to deal with plaintiffs’ problems in establishing causation?1- Theory of loss of chance2- Presumptions

Loss of chance : 2 types(1) Classical : distinct type of damage/method of evaluating damages

Situation where fault causes loss of chance to obtain a benefit or avoid an injury (e.g. negligently misplaced lottery ticket; loss of support from deceased child)

General CivL acceptance Classical theory accepted in QC (another aspect): measure quantum of

damages by the statistical probability of chance materializing (e.g. If youhad a 5% chance of winning the negligently mishandled lottery ticket for a$100 cash prize, your damages are $20).

(2) Controversial : medical cases of uncertain causality Actual damage has occurred, but causal link to fault is tenuous Causal link to lost chance more probable; quantum set according to probability of

chance/degree of injury France and Belgium crts – though doctrinal criticism

Problems arising from the loss of chance- Inventing new damages to overcome causation problem (‘immediate and direct consequences’ per

1607 CCQ)?- Weakening the ‘real and certain’ requirement for future damages (‘certain and able to be assessed’ per

1611(2) CCQ)?- Gonthier J makes distinction w/QC law (Laferrière), where loss of chance theory part of causal

analysis, i.e. probable causation, not type of damage independent from cancer. BUT in absence of causal link on balance of probabilities with greatest injury, possible causal link with lesser injury (e.g. death vs quality of life)

Loss of chance in France- According to Viney, the lawyer who omits to file an action properly or on time and thereby deprives

the client of a chance of winning the case is a classic example of loss of chance (560). - As Gonthier writes, there is little doctrinal resistance to the application of the theory of loss of chance

in the classical cases (561). Thus, in France, Marilyn would have a claim for loss of chance against her lawyer.

- According to Viney, French courts have established two conditions to limit the application of loss of chance:1) The lost chance must be real and serious, which means that the realization of the chance must have

been at least likely.2) The courts must take into account the likelihood of realization of the lost chance in the evaluation

of damages.

Loss of chance in Quebc- Laferrière tells us that loss of chance is rejected in Quebec in all but exceptional cases. The case

before us is not an exceptional case, but rather one of the “classical cases”. According to Gonthier, in these “classical cases”, doctrinal writers are mistaken in stating that Quebec courts have awarded damages for lost chances.

- Gonthier writes that while courts may be prepared to award damages which are somewhat uncertain or contingent on an event which is not guaranteed to occur, the courts require proof that the damage will occur or that the profit would have been realized, on a balance of probabilities. If this is satisfied, the damages are considered present and certain and, accordingly, the damages can be evaluated at their full value (586). “It is real damage, and not the chance, which is the pre-occupation of the court” (560).

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- Thus, in this case, a Quebec Court would have to decide, on the balance of probabilities, whether Marilyn was likely to have succeeded. Although they do not take probability into account per se, i.e. they won’t give her 51% of 50,000 if they think those were her chances, they may adjust the amount of damages based on the strength of her case. This is a fine distinction, but the difference is important according to Gonthier. (588) If the Quebec judge feels that she had a good chance of succeeding, but that she probably would have only got $30,000, she will get $30,000. The analysis is always based on what the actual damage or lost profit would most probably have been. Thus, the analysis is inherently speculative, but it is the speculation based on what she would actually have received, not a reduction in damages based on the likelihood of success.

Shaky precedent: - The goal of this question is to highlight the impact that added uncertainty would have on the claim, in

France and in Quebec.- France: In France, this added uncertainty would probably not be enough to take away from the fact

that the chance was real and serious, however, it will most likely play into the award of damages. Her damages would be decreased to the extent that the probability of her success is weakened.

- Quebec: In Quebec, this may change a lot. With an uncertain precedent, the Courts could still find that she would have succeeded on a balance of probabilities. However, if they find that she has a 50/50 chance because of the uncertainty of the state of the law, then her action for the lost profit will fail because she is not likely to succeed on a balance of probabilities.

- Here, we are trying to draw a parallel with Laferrière and Lawson, but it is a bit more removed. Again, if she were to succeed, it would not be for the lost chance itself, but as in Lawson, it would be for the emotional stress that was suffered as a result of the knowledge of the lost chance.

- Following a literal reading of Laferrière, it seems that she might be able to make such a claim. In Laferrière it’s the “knowledge that things might have been different” had she know earlier and been treated earlier, regardless of whether things would have in fact been different. As Gonthier states, “her chances may not have been sufficient for the law, but they were very real to her.” (610). Thus, she is compensated for the actual pain and suffering that she experienced as a result of knowing that she could have been treated earlier, not the hypothetical pain that she might have avoided had she indeed been treated earlier.

- In this case, the causal link is a bit more attenuated. It is not Marilyn’s pain and suffering because of her own lost chance, but the pain and suffering she feels because of her mother’s lost chance, which was itself contingent on Marilyn’s chance. There may be too many contingencies here.

Laferrière v. Lawson, [1991] 1 S.C.R. 541FACTS: A doctor diagnoses breast cancer and fails to inform the patient and the subsequent following up. She finds out she has cancer a few years later. She dies and her estate sues.ISSUE: Did the doctor’s fault cause the patient to lose her chance of recovery?Pf tries to extend loss of chance into the causation inquiry.HOLDING: - The trial judge dismissed the claim b/c there was no proof that the treatment the patient lost

the chance to undertake would have had a positive effect on her health. The Court of Appeal reversed the decision and found that the def.’s fault resulted in the loss of a real and serious chance for the plt. from proper medical care. This decision was ultimately reversed by the SCC.

- Plt. recovers a small amount for psychological suffering and the deprivation of the improvement of the quality of life caused by Dr’s fault. But, court holds that it is the cancer that ultimately caused pf’s death.

- The Court held that the theory of loss of chance, at least as it is understood in France, should not be introduced into the civil law of Quebec in matters of medical responsibilities.

- According to the traditional rule of civil responsibility (fault, causation and damage), there is no causal link b/w the doctor’s failure to follow up and the patient’s death.

- Dissenting - LaForest J: recognises that in giving partial damages for loss of chance you are partially compensating the victim. Where problems of establishing causation exist, plt. aided

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in by presumptions (now arts. 2811, 2869 CCQ). Where a fault presents clear risk of harm and harm materializes, judge may presume causal link between fault and said injury.

NOTES - Two principal schools of thought in France:

1. loss of chance is to be envisaged as merely a type of damage;2. the effect of the loss of chance in the medical context is to undermine causality as an essential element of civil liability and therefore to be rejected as contrary to established principle.

- The SCC stated that loss of chance is a type of damage. It is the damage which results form the loss of an opportunity either to realize a benefit or to avoid an injury.

- The causal link is established b/w the fault and the final damage, and which the “intermediate” damage represented by the loss of chance may be mentioned in the course of the analysis, the courts’ preference is to follow the link through to its fullest extent. The damage is not the chance itself but rather the benefit unrealized or the injury unavoided.

- Where such damage is a condition of civil responsibility (in the fault, causation and damage equation), the courts probably require proof on the balance of probabilities. Effectively, the damage is considered present and certain and, accordingly, the damages can be evaluated at their full value.

- In cases where the responsibility has already been established regarding some concrete initial damage, and where the loss of a desired future result in an alleged consequence of the initial damage, then the court’s attention will properly be focussed on the real damage represented by the loss of the future result, and question of probability will only be considered, along with other relevant facts, in the evaluation of damages.

- In both instances, it is the real damage and not the chance which is the preoccupation of the court.

- Loss of chance in the medical context. - In these cases, the court is often placed in a situation where evidence is scarce and

where the trial judge must rely on medical expertise, often presented in tentative or statistical form. Both of these factors lead themselves to clear difficulties in the establishment of the causal link and the assessment of damage.

- There is a temptation to overcome these difficulties by removing the analysis of the case to a more abstract, statistical level.

- In general, perhaps b/o less rigid rules regarding causation, Quebec courts focus on the actual damage which has occurred and the actual benefit which would have conferred.

- By focusing on the outcome of the chance, the courts in Quebec ensure that the causal link b/w the fault and the actual situation now experienced by the plt. is established at least on the balance of probabilities.

- Gonthier J didn’t think that the loss of chance could substitute the traditional approach in awarding the damage in Quebec, even in the classical sense.

- It is only in exceptional loss of chance cases that a judge is presented with a situation where the damage can only be understood in probabilistic or statistic terms and where it is impossible to evaluate sensibly whether or how the chance would have been realized in that particular case. The purest example of such a lost chance is that of the lottery ticket.

- Loss of chance becomes critically difficult when it is employed as a method of analysis in the complex cases of medical responsibility. In the most difficulty cases, such as the present case, the def. doctor’s fault cannot be easily attached even to any initial actual damage suffered by the plt. patient. Accordingly, it is analysis of the lost chance itself which will determine whether the doctor is at all responsible. The lost chance can be analyzed in two ways.

- In France, it is the chance itself which is considered, usually described as a chance of recovery or survival.

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-The chance must be “real and serious”, and this is said to include chances which are likely or probable, or chances where recovery or improvement is more likely than death or illness.-The damages are awarded in relation to the chance itself, and therefore such damages are only partial. -loss of chance analysis is said to be appropriate in cases involving faults of omission; fault of commission must be analyzed according to a method which connects the fault to the actual death or sickness.

- In Quebec, courts are more inclined to examine the damage which has already occurred, and to consider whether that damage was caused by the doctor’s fault or by other identifiable factors.

-If the fault was causal, then full damages are awarded. -Faults of commission are treated in the same manner as faults of omission.-The judge attempts, in effect, to determine whether and to what extent the doctor’s acts and omissions are responsible for the situation in which the patient now finds himself or herself.

- SUMMARY By Gonthier J - The court do not feel that the theory of loss of chance, at least as it is understood in

France, should be introduced into the civil law of Quebec in matters of medical responsibility.

- The general observations: -The rules of civil responsibility require proof of fault, causation and damage;-Both acts and omissions may amount to fault and both may be analyzed similarly with regard to causation;-Causation in law is not identical to scientific causation;-Causation in law must be established on the balance of probabilities, taking into account all the evidence: factual, statistical and that which the judge is entitled to presume; -In some cases, where a fault presents a clear danger and where such a danger materializes, it may be reasonable to presume a causal link, unless there is a demonstration or indication to the contrary;-Statistical evidence may be helpful as indicative but is not determinative. -Even where statistical and factual evidence do not support a finding of causation on the balance of probabilities with respect to particular damage (e.g. death or sickness), such evidence may still justify a finding of causation with respect to lesser damage (e.g. slightly shorter of life, greater pain). -The evidence must be carefully analyzed to determine the exact nature of the fault or breach of duty and its consequences as well as the particular character of the damage which has been suffered, as experienced by the victim;-If after consideration of these factors a judge is not satisfied that the fault has, on his or her assessment of the balance of probabilities, caused any real damage, then recovery should be denied.

Loss of Chance: Baudouin- In this case, it is not so much the actual loss which the court is seeking to

compensate but rather the disappearance, b/o the occurrence of the fault, of the chance either to avoid a loss or to make a profit.

- The theoretical difficulty is that the damage which is being claimed for is not only future but, by definition even, uncertain. No one can say with certainty whether the loss could have been avoided or the profit made if the fault had not occurred.

- However, the courts, recognizing that merely being deprived of a possibility is a direct damage, have applied this concept.

e.g. 1: when following the death of a child, the parents are awarded a sum of money for loss of future support, this must clearly be regarded as loss of change. It is not certain that the parents would have needed such support or

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that the child would have been able to support it. however, the fault has extinguished this possibility, this hope, this legitimate expectation of support. e.g. 2: k-ual matters – when a lawyer whose services have been retained allows prescription to intervene and so loss the action which his client could have brought. In some cases, no one can say with certainty whether the client would have been successful and how much he might have been awarded. The court will compensate him, however, b/c the fault has extinguished all possibility of recovering his debt.

- The courts have also applied this concept in a case where paramedical treatment caused an individual to loss the chance of improving his physical condition.

L. Khoury, Uncertain Causation in Medical Liability, D.Phil. Thesis, University of Oxford, 2003 (excerpts). - Probabilities lie at the heart of the assessment of causation. Nothing is certain in this world

and one can often assess only the probability of existence of facts and events. - Damages are in theory not calculated in proportion to the judge’s conviction that the def.

caused the damage, i.e. on the basis of its causative probability. This fiction is reflected in what is called in CoL the all-or-nothing rule.

- The all-or-nothing rule has been criticized as leading in every case to an unfair result by either under-deterring or over-deterring defendants. There came a system of proportional recovery – if it is established that there is a 40% probability that the def.’s negligence was the cause of the plt.’s damage, the plt. may recover compensation for 40% of this damage. This amount reflects the risk created by the def. and the damage suffered by the plt. through that risk, or, in other words, the proportion of the chance of avoiding the damage that the def. deprived the plt. of.

- Loss of chance is the best known expression of the principle of proportional recovery. This theory argues that if, before the def.’s fault intervened, a plt. possessed a chance to make a gain or to avoid a loss, and the fault destroyed that chance, the plt. can obtain compensation for the value of the lost chance instead of claiming for the negative situation in which he has been left.

- This concept has the clear advantage of allowing the plt. to recover at least part of his damage despite the uncertainties surrounding causation, while holding the def. liable only for a portion of the loss, based upon the extent of his causal responsibility for it.

- The loss of chance concept has been originally applied in cases now called classic and subsequently been extended to medical cases.

- There is little doctrinal and judicial resistance to the acceptability of loss of chance reasoning in the so called classic loss of chance cases, even though this head of damage is by definition hypothetical.

- In these cases, often argued in ks, the def.’s negligent action or omission crystallizes the plt.’ situation, and the plt. is thereby altogether prevented from taking the chance. Consequently, the hoped-for-end-result remains forever hypothetical. E.g. a lawyer has allowed the limitation period of his client’s claim to lapse; a person has failed to buy a lottery ticket for a friend after agreeing to do so…

-In x-k cases, it is also referred to assess the eventuality of future hypothetical damage such as whether the plt. would have supported his family, would have obtained employment, or would have continued playing tennis had he not suffered injury.

- In all of these cases, the language of chance allows one to assess the plt.’s hypothetical damage by calculating not the value of the end resultend-result expected but that of the plt.’s chance of achieving that end resultend-result, gain the advantage, or avoid the loss.

-When doing so, it is sufficient to show that there was a reasonable chance or, in civil law language, a real and serious chance that the hoped-for result would have been achieved.

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-The chance is calculated on the basis of the probability of realization of the expected result and consequently the plt. receives compensation for only a portion of his injury. -The chance must be capable of being assessed objectively, independently of the value of the hoped-for benefit. -The lost chance must be causally related to the def.’ fault.

- The doctrine’s extension to cases involving medical faults in which the causal link b/w the final damages – death, sickness or disability – and the doctor’s fault is uncertain is more controversial and has provoked a very active debate in all of the jurisdictions studied.

- In the context of medical liability, the concept is most useful when, even though causation b/w the doctor’s fault and the plt.’s damage is not established on the basis of the traditional standards, it allows the plt. to plead that before the medical act was undertaken, he had a chance of cure or of survival which the def.’s fault destroyed.

- Hence, losing a chance of recovery is considered a form of legal damage in its own right, independent of the final outcome suffered by the patient.

- Thus, the plt. is not required to make the impossible demonstration of the exact cause of the final damage (X). He has to prove only that the physician’s fault caused a distinct damage, the loss of chance (Y).

- Only the French judiciary currently agrees to compensate patients for their loss of chance of survival or recovery. The Quebec and Canadian case law has strictly rejected the application of the doctrine to medical negligence cases.

- Quebec courts generally assess causation in medical liability instances without recourse to the loss of chance analysis, preferring to focus on the actual damage which has occurred. While the intermediate damage represented by the loss of chance may be mentioned in the course of analysis, the courts’ preference is to satisfy themselves not only that chance was lost but that on the balance of probabilities that chance would have been realized.

- E.g. in Lawson, the SCC not only rejected the argument that loss of chance constitutes a redefinition of the damage, but also believed that, used in the medical context, the idea artificially bypasses the causation requirement.

- This position did not, however, constitute a revolution; it had already been largely adopted by the doctrine and most of the case law on the subject.

- Argument in favour the doctrine of loss of chance- Avoid the unfairness of the traditional all-or-nothing approach;- It is a valid type of damage independent of the actual future damage, i.e. the benefit

missed or the injury that was not avoided. the loss of chance solely seeks the calculation of the loss.

- Loss of chance accounts better for the fact that statistical chances do not necessarily reflect the plt.’s personal chance.

- In lighting the plt.’s burden of proof, loss of chance helps him deal with the imbalance of knowledge and financial resources b/w him and the def. doctor.

- Ensure the quality of professional practice- Argument against the doctrine the distinction b/w the classical and medical loss of chance

- Taking of the chance: whether or not the plt. had the possibility of taking the chance. Classic cases Medical cases The chance is destroyed and the hoped forhoped-for result will never be obtained and therefore remains contingent.

The medical fault decreases the plt.’s chances of recovery; but the plt. is not prevented from taking his chance.

Loss of chance analysis allows the courts to assess the damage despite the fact that it has not yet been made real.

The chance is exhausted and the result is no longer hypothetical. The plt. suffers an identifiable and known damage and the loss of the chance is only a step leading to his final damage, which must occur in order for the compensation question to become relevant. The final damage is a past accomplished

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event, the cause of which is uncertainty. - Consequently, the concept of loss of chance has no role to play where the

chance has been taken and the final outcome fulfilled. - Type of uncertainty: Classic cases Medical cases When the taking of the chance has been halted and the resulting damage remains contingent, the question to be decided is one of damage the depends on future hypothetical events (‘What would have happened if … ’).

When the chance has been taken and the outcome is realized, the court’s task is to retrace the historical facts which led to the plt.’ loss (‘What did happen’).

The question can be answered only by assessing the chance of a favourable outcome.

The question must be answered on the balance of probabilities.

- this distinction is difficult to apply b/w it is possible to reformulate every case as one of uncertainty about either past facts or hypothetical future events.

- General Implications of Loss of Chance- Loss of chance may denature the traditional requirements of causation and evidence

and even lead to a complete revolution in the rules of civil liability in two ways: - It provides a conceptual justification for by-passing the fundamental

requirement of showing causation; - It theoretically allows recourse to proportional liability in every case.

Cass. civ. 1re, 7 June 1989, D. 1991.Somm.323, J.C.P. 1989.IV.294, D. 1991.Jur.158 (Annot. Couturier), D. 1991.Somm.323.Facts: - Patient sues surgeon for not informing her of the need for emergency surgery. Court of

appeal awards patient for loss of chance of recovery b/c timely intervention presented reasonable probability of recovery.

- Following decision, patient’s condition worsens. Court of Appeal rejects her demand for more damages.

Issue: Can plt. obtain further damages b/c her actual injury has worsened?Holding: Yes, increased damages possible because loss of chance linked to gravity of actual injury.Ratio- Note by J-P Courturier: Necessary link between the loss of chance and the final injury (‘real

state’ of patient). - Loss of chance used whenever causal link cannot be proven. Even though lost chance and

actual injury are distinct, independent damages, loss of chance only has legal recourse due to actual injury (lost chance to avoid injury). Thus, lost chance of recovery from medical condition is compensated according to fluctuations that condition.

CLASS 10 Remedies (Continued): Assessment of Extra-contractual Damages : Moral Damages Nov. 7

Art. 1457 and 1607 C.c.Q.

Art. 1607: The creditor is entitled to damages for bodily, moral or material injury which is an immediate and direct consequnece of the debtor’s default.

Two concerns

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- the general theory behind moral damages and the particular case of defamation where damages are mainly extra-patrimonial

- distinguish between civil and common law approaches

Moral damages and the approaches- What do we mean by moral damages? Generally speaking, these include loss of enjoyment of life, pain

and suffering, aesthetic injury, humiliation, ridicule- the are extra-patrimonial damages because they do not relate to economic activity but more the

emotions of individual sufferers- these are often confused in the jurisprudence- In St. Ferdinand, L’H-D tries to separate the analysis:

1) When is there a right to moral damages?2) How should these damages be quantified?

- Once you pass the hurdle of whether there is a right to moral damages, it comes down to the same three possible approaches:

1) conceptual : treats each faculty as a proprietary aspect: losing a finger is worth X, and arm X, it’s a very objective tariff type of system. -compensation reflects the gravity of the injury, it’s a sliding scale of evaluating how much your injury is worth, it is blind to the victim’s personal sense of that loss-Pros: it injects some measure of predictability, it’s easier to insure against loss, may lead to more settlements out of court rather than litigation

-it’s egalitarian in a sense: every one is treated the same, it won’t depend on you ability to testify and look pathetic in court… relieves the burden on the plaintiff to prove how much he or she has suffered-accords with the civilian goal of compensation

-Cons: no subjective assessment is taken into account when the truth is that my finger is worth less than the finger of a concert pianist

-it the civilian goal is truly compensation, then the award should be variable from one person to the next because it should be compensation for THAT plaintiff’s damages-the rebuttal to the concert pianist example is that he or she will get more in pecuniary damages for lost income, so that it will balance out. But, from a purely moral point of view, I think the mental anguish the concert pianist will suffer wondering what could have been will also be greater.

Q: What is the relationship between the theory and the actual damages handed out? -from Benedek: cts (esp Co.L.) are not really using the fnl approach, despite what they say, because they are not trying to estimate the cost of the substitute pleasures. Where is the actual proof that this is what the judges are doing? -Dickson says as policy should give solace –-Jukier thinks they are really using a sliding scale/ comparative approach which is closeset to the conceptal approach used by Ci.L. -most cases take Andrews (quadraplegia) scenario and decide that if that is the worst scenario, then rate against this. This is neither functional or personal approaches – and really not true conceptual approach either. -just looks at where is fits given gravity of injury. This approach is only possible bc there is a cap (though could compare more generally).all this means must ask why there is a cap and whether it is a good idea.

2) Personal Approach : Opposite of the conceptual approach, compensated the actual unhappiness or suffering of a particular plaintiff-we should only be giving compensation to those who are actually suffering, in proportion to what they are actually suffering-the question that often arises is what if the fault is the reason you don’t experience moral damages? I.e. if the fault is what renders you mentally incapacitated and thereby you don’t appreciate the mental suffering in the same way as an able-minded person would?

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-Jutras is one writer who argues that we should only be compensating for what the victim is actually suffering, otherwise this is not compensation but punishment-others have argued that you can’t even really measure this anyway: restitutio in integrim for moral damages is an impossibility

3) Functional Approach : this is the approach of the common law, endorsed by the SCC in the Andrew’s Trilogy-this approach recognizes that restitutio in integrim is impossible for moral damages, what we’re really doing is trying to provide reasonable solace-it’s indirect compensation by giving the victim some means to secure alternative sources of pleasure to substitute for what was lost-here’s some money to try to make your now worse life a little better-you can’t make them walk again, so you try to make their life better by giving them $$

- both the functional and personal approached would probably have barred recovery in St. Ferdinand- the appellants argued that compensation would have no purpose because the plaintiffs can’t enjoy the

money, their mental condition makes it impossible to get solace from the money- L’H-D rejects this in civil law: she says this common law approach is inconsistent with the civil law,

money is to repair the actual loss: it’s not a consolation prize

Two problems:1) The unaware plaintiff: i.e. plaintiff in a coma – civil law would compensate on conceptual approach,

common law would not2) When victim dies? If it is possible for the heirs to sue for moral damages, then the functional approach

is clearly wrong (money is not giving you solace once you’re dead)-in the civil law, heirs are allowed to sue, but the irony is that civilian courts do not actually allow recovery unless the victim actually suffered: if it was a quick, painless death, no recovery (recall Augustus v. Gosset), this is a huge contradiction: on a true conceptual approach death should have a value like everything else-Gonthier in St. Ferdinand says that you have the right to sue if you’re incapacitated, but that should be taken into account in the award of damages

- Jukier says it’s all so discretionary: damages are at bottom impossible to quantify. Even in common law, it’s not like they enumerate exactly what solace the money is going to buy

- given the discretionary nature of the award, is a cap a good idea?Pros: an explosion of moral damages may have adverse social costs: i.e. doctors not willing to perform risky operations because of fear of liability, rising insurance costs, etc-since pecuniary damages will already have been compensated (i.e. loss of income, medicare costs, etc.) there is little need to allow for huge awards of moral damages-a cap will lead to predictability and fairness-the civil law seems to have accepted the cap set out in the Andrew’s trilogy, (about 100,000 indexed to inflation, now probably well over 250,000), but the functional approach adopted in that case was rejectedCons: having a cap is actually inconsistent with all approaches: solace might cost a lot more for some that others, and a lot more than the capped amount

The only argument that Jukier likes against a cap (LeTarte in Parizeau) since moral damages are so small, then the cap might be seen as the cost of a licence to defame.

Benedek, “Non-pecuniary Damages: Defined, Assessed and Capped” (1998) 32 R.J.T. 607 at 651-60.- The definition and subheading of Non-Pecuniary- Common Law

- Non-pecuniary loss is an intangible loss which is incommensurate with money or lack market value.

Physical and or mental impairment, pain and suffering, the inability to participate in activities once enjoyed, a shortened life-span.Present and future physical and mental pain and suffering

- Subheading:

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-1. Pain and suffering – both past and prospective;-2. Loss of amenities – the physical disability sustained by victims as a result of accident, and the effect of that disability on the scope of their activities;

-It addresses both the injury itself and its impact on the plt.’s enjoyment of life. -both past and future anguish over lost amenities.

-3. The loss of expectation of life – a complete loss of pleasure of living during the period the victim would have lived if not for the accident.

-the objective aspect – the loss of life itself. -the subjective aspect – the anguish experienced in apprehension of that loss.

Case law: SCC Trilogy 1978 – consensus to use functional approach in Cmn Law personal injury suits + rough upper limit 100 000$. Andrews / Thornton / Arnold v. Teno

- Civil Law: extra-patrimonial loss; attack on one’s physical integrity with no effect on patrimony. No material damage.Includes: sufferance / harm / injury to reputation or honor / phys. deformities / suppression of pleasures / frustrations.

Civil debate on objective (Baudouin) vs. subjective (Jutras) approach to compensation Subjective: exists only when experienced (no compensation for unconscious

victims) Objective: compensation is due for objective loss of limb/faculty.

Case Law: SCC Que (Public Curator) v. S.N.E. de l’Hôpital St Ferdinand --- support for objective approach in Que. Right to compensation is not conditional of victim’s ability to profit from the $$ compensation. Damages are recognized independent of victim’s awareness of loss.

- Assessment:- Nature of damages are at the root of difficulties in assessment because they can’t be

compensated solely on basis of restitutio in integrum since court cannot command df to restore victim’s eye for ex. & pain + suffering cannot be erased nor can years be added to a shortened life.

In [Lindal v. Lindal], Dickson emphasized that the fact that only a limited application of the principle of restitutio in integrum is possible for non-pecuniary loss.

- The impossibility of applying the theory of complete restitution as applied in the case of pecuniary damages. This difficulty is just as prevalent in defamation cases.

[Andrews]: This explains the view in Andrews that evaluation of non pecuniary damages is more of a policy / philosophy exercise than a legal or logical one. The reward must be fair + reasonable but necessarily arbitrary and conventional.

- Cmn Law approach in Andrews + trilogy:- Functional approach to compensation – solace through acquisition of goods + services is

the aim of compensation. Damages evaluated on basis of sum with which victim can be provided with reasonable solace.

In the case of pecuniary loss: the principle of complete compensation prevents the consideration of the social burden of the award;

In the case of the assessment of non-pecuniary damages, the social burden of the award is a factor to be considered.

SO, in the trilogy cases, the heading of non-pecuniary loss essentially compensate for a single loss, being mental distress, and, adopt a global sum as the method of distributing the award.

- Guidelines: (1) compensation is based on use it can provide. (2) Likelihood of bettering situation + severity of injuries establish amount. (3) Sum should be modest since victim has already been indemnifies for pecuniary losses + award for non-pecuniary injury is not compensatory in nature.

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Refined in Lindal (1981) – -the damage to the victim’s limb or faculties will be claimed in light of the expenses assumed to replace the lost use and pleasure. -arguments had to be made for loss of expectation of life & age, prospects before injuries + after injuries to be considered.-based on the functional approach, there will be no award be provided for the unaware plt. b/c no anguish and consequently no need for solace.

- Theoretical Discussion of Different Approaches to Compensation:The KEY what is actually being compensated by the award.

Conceptual approach Personal approach Functional approachcompensate loss of valuable personal asset, specifically the capacity and faculties for enjoying life, AND each asset has objective value.

“So much for a foot” – being deprived of something which has property right equivalent.

-It promotes a tariff system which determines a sum for each part of the body and for extent of damage to each part.

allocation of damages for actual personal unhappiness.

“So much for a feeling”. - there is no award or reduced award for unconscious victim, b/c his personal appreciation of his loss is minimal.

-this approach seeks to assess in monetary value the plt.’s past, present and future loss of pleasure and happiness as a result of the deprivation of use of his injured limbs.

how $ can be used to compensate victim for his lost amenities = “with reasonable solace for his misfortune”, rather than for what has been lost. Ex. cost of furnishing accommodations to make life easier to bear.

“so much for a function”-the amount of the award is based on the needs and evidence of each particular case.

-the justification for this approach: it can be constructively used to provide the plt. with some amount of consolation.

- Criticism to the functional approach in the trilogy cases of SCC- Despite the adoption of the functional approach in theory, the concrete quantification

in the trilogy more closely resembles the conceptual view. B/c the assuming that the severity of the injury was related to the amount of money required to effectively ‘console’ the plt. was to assimilate the conceptual approach and the functional approach.

- There is no indication in the decisions that any thought was actually given to the function or purpose which the award for non-pecuniary damages could fulfill, nor of what the cost would be to provide these services or goods to make the victim’s life more bearable.

- Compatibility of Approaches to Civil Law:- The concept approach is incompatible with the civil law there is a depersonalization of

the process of evaluation in the sense that no consideration is given to the unique situation of the victim.

SO, there exists a unanimous decision prevalent in both doctrine and jurisprudence to reject the conceptual approach in Quebec.

- As to the function approach, there was lack of consensus in civil law in Quebec. - B/c it carries with certain burden, such as

-the cost of gathering evidence for the cost of replacement, -the inequity for some victims in so far as the award is reduced in proportion to the extent to which the injuries restrain the possibility to replace pleasures with those lost

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-the absence of an award to the unconscious victim since it cannot be seen as fulfilling a funtion

- two different views:FOR : Gardner/Jutras AGAINST: Baudouin-not incompatible because they correspond to idea that civil liability is focused on situation of the victim – the civilian notion that “a victim should not be refused an award if his sufferance is lessened by the fulfillment he can obtain from it”.

-there is only a judicial practice in evaluating non-pecuniary damages since no rule exists.

-is incompatible with civil law tradition, even though it is in conformity with the spirit and tradition of common law.

-non-pecuniary damages in civil law seek to objectively compensate a legitimate interest, which has been harmed.

-seeking to diminish the effects of the harm caused will refuse to compensate in the cases where the award could not fulfill this function, such as in the case of coma victim.

NOTE: Baudouin’s view adopted by SCC in L’Hôpital St Ferdinand. – BUT 3 approaches apply jointly to assess the sum of award.- The personal approach corresponds to the ideal of civil liability it is focus on the situation

of the plt., in terms of the injuries he sustained and the consequences they imply for him.

CONCLUSION: THE ONLY RULE WHICH EXISTS REGARDING THE ASSEMENT OF NON-PECUNIARY DAMAGES IN CIVIL LAW, IS THAT THE INDIVIDUAL’S LOSS MUST BE COMPENSATED IN A PERSONALIZED FASHION art. 1611 C.c.Q

- Unaware victim- Common law

- The strictly application of the function approach will lead to no award to the unaware victim since such an award cannot be justified.

- Case law:[Laird v. Costain]: “conscious suffering is the only basis for an award for pain and suffering.”[Knutson v. Farr]: an award for noo-pecuniary damages was appropriate in the case of unconscious victim. BUT here the award cannot provide solace, just for loss of amenities.

Esson J in his dissenting judgement held that “our inability to predict the future is a good reason for not dealing with the subject in an overly mechanistic and ‘logical’ way.” He specified that the plt. who has suffered the most serious loss has the right, for that sole reason, to some award for non-pecuniary damages.

- conclusion: in most case, even where there are no sign of cognitive response, a small award for non-pecuniary damages for loss of amenities is provided. But for an award to provide solace, there must be some level of consciousness and might improve.

- Civil law- Even if the sum awarded cannot provide solace nor satisfaction to the unconscious or

mentally handicapped plt., the civil law approach to compensation permits the allocation of non-pecuniary damages in such cases.

- In [Syndicat], L’Heureux-Dube insists that an objective conception of moral prejudice is much more consistent with civil law.

- Upper Limit on Non-Pecuniary Damages in Personal Injury Cases- Reason: the fear of largely extravagant awards likely to create an immense social

burden, and the fact that non-pecuniary damages is an area susceptible to excessive

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claims, and that victim has already been compensated for pecuniary loss, urge SCC to establish an upper limit for damages in common law personal injury cases.

- The application of the cap: the upper limit should not be exceeded save in exceptional circumstances.

SO, in [Lindal], the court held that such exceptional circumstances were present in this case.

- The compatibility with Civil law-Both doctrine and courts accept that cap is needed to avoid explosion of awards; increase would prejudice society. Reasonable evaluation must be made. Andrews cap ($100 000 1978 dollars) applied in Que. (Letarte trilogy)

- The reaction to the introduction of the Cap imposed by the SCCFOR AGAINST1. keeps awards for these damages at a level which will not result in an excessive burden to society;

2. permits a substantial sum of money to be allocated for the purpose of substitute pleasure without going to ridiculous extremes;

3. it is necessary to obtain the objective of consistency, predictability and fairness b/w the plts. 4. it is sensible to contemplate the fact that the cost of high awards is carried by large portions of the public through liability insurance premiums;

1. it will not be suitable in some circumstances, where a victim may experience mental suffering and frustration more extensive than that suffered in trilogy cases.2. how the cap should be interpreted is questionable. – most of courts evaluated the awards on a comparative basis. It is unreasonable to equate the most serious injury with the upper limit for reasons of sympathy or the discarded notion of lost asset. 3. it clashes with the functional approach to the evaluation of non-pecuniary damages in personal injury suits. that is, to provide the victim with accommodations that will make life easier to bear.

- Defamation --- Not capped Debate:- Common Law

- In [Hill v. Church], the court held that the cap should not be applied to defamation cases. The reasons: 1) the injury suffered is different; 2) there is no urgent social concern for awards in defamation cases; 3) the cap will mean a maximum penalty for the right to defame.

- In [Botiuk v. Toronto Free Press Publications], the court indicated that “a cap on damages in defamation cases is neither needed nor desirable.” This decision was reaffirmed by the SCC.

- Morse: there is no legitimate ground for the application of the upper limit concept from personal injury awards to moral damage awards in defamation cases, b/c the total pecuniary compensation, upon which the cap is based, does not exist in the case of the awards in libel suits.

Three principal differences b/w these two types damages: a) the conduct of the defamer is always considered in the evaluation of the

“at large” award;b) the nature of the non-pecuniary damages;c) no foundation for fully compensated pecuniary losses in defamation

awards;SO, “at large” damages in defamation cases are ‘traditionally both theoretically and practically compensatory’.

- Civil Law - Argue it is unfair that is not capped because a reputation can be re-established +

damage is temporary.- (Quebec) Snyder Lamer J’s dissent – impose a $50 000 cap b/c:

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(1) Award to compensate is arbitrary and subjective so best to establish a reference point. (2) Compensation should not be a source of enrichment or detriment to parties because Civil Law seeks to compensate not punish. (3) Harm is temporary usually. (4) Courts risk paralyzing press with large sums.

Jukier agrees lower compensation should be awarded b/c of factors not found in personal injury: (1) competing interests in defamation – freedom of expression vs protection of privacy. (2) Temporary (3) Alternative remedies for defamed ex. retraction.

Curateur v. S.N.E. de l’Hopital St Ferdinand, [1996] 3 S.C.R. 211.FACTS: The unionized employees of a hospital for the mentally disabled participated in illegal strikes. As a result, the patients in the hospital were deprived of certain care and services normally provided by the employees. Represented by the Public Curator, the patients brought a class action to seek the compensation for the damages caused by the loss of access of care and service normally provided. ISSUE: As to the evaluation of the moral prejudice and the calculation of moral damages, which approach is applicable in Quebec civil law?REASONS: - SCC in trilogy cases established a functional approach to evaluate the moral damages.

However, Quebec civil law rejected this approach. - As per Baudouin, the functional approach is inconsistent with civil law and tradition.

1) the civil law allows for compensation of moral or non-patrimonial damage, not as a sanction for the gravity of the fault or as a consolation prize, but as objective compensation for interference with a legitimate interest.

2) In the civil law, the prejudice must be compensated b/c there has been interference with a legitimate patrimonial or extra-patrimonial right, and not b/c there is a material way of alleviating the inconveniences of that interference.

3) The compensation is owed b/c there has been a loss, and not b/c the victim may hope to secure substitute pleasure.

- The traditional justification in civil liability for remedying a prejudice stresses the compensatory function of the damages: restitutio in integrum.

- The right to compensation for moral prejudice is not conditional on the victim’s ability to profit or benefit from monetary compensation.

- In Quebec civil law, the primary function of the rules of civil liability is to compensate for prejudice. This objective requires that there be compensation for the loss suffered or the opportunity for profit lost b/o the wrongful conduct, regardless of whether the victim is capable of enjoying the substitute pleasure.

- The objective conception of moral prejudice is much more consistent with the civil law, the purely subjective conception has no place in the civil law. The victim’s condition or capacity to perceive are irrelevant in relation to the right to compensation for the moral prejudice.

- The method of calculating moral damages: in Quebec civil law the three approaches to calculating the amount necessary to compensate for moral prejudice – that is, the conceptual, personal and functional approaches – apply jointly, and thereby encourage a personalized evaluation of the moral prejudice.

Conceptual approach Personal approach Functional approach -the components of a human being to have purely objective value, which is expressed in a specific monetary amount.

-disadvantage: fails to take into account the victim’s specific situation an “unsubtle” solution.

-the compensation corresponds specifically to the loss suffered by the victim.

-declines to standardize the calculation of moral prejudice.

-calculate the ‘physical arrangements which can make the injured person’s life more endurable’.

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Augustus v. Gosset, [1996] 3 S.C.R. 268 (edited).Facts: Appellant brought a civil liability action against G and CUM for the death of her 19-year old son. Father also claimed money. Trial judge decided that G and CUM pay for compensatory damages and for loss of moral and financial support and for exemplary damages but he dismissed appellant’s claim for solatium doloris and for loss of life expectancy and suffering. Court of Appeal allowed solatium doloris but refused to recognize her right of parenthood and to award her compensation as her son’s heir for his loss of life expectancy and the interference with his right to life and security; Court refused exemplary damages. Issues: 1) Can the victim’s mother obtain compensatory damages for solatium doloris under arts. 1053

and 1056 (now 1457 CCQ), or for interference with her parental rights under ss. 1, 39, 49 of charter?

2) Does the appellant have a right as her son’s heir to obtain compensatory damages for his loss of life under ss. 1 and 49 of the Charter?

3) Does the appellant have a right to exemplary damages?Ratio: L’Heureux-Dube J:1) Solatium Doloris : Compensation for the grief and distress felt when someone close dies

(solatium doloris) is consistent with the civil law’s full recognition of moral damages. Hence Solatium Doloris is a compensable head of moral prejudice. Despite the singular difficulty in assessing moral prejudice, such prejudice can in theory be recovered so far as it is proven. From this perspective, important to develop parameters of assessment which are sensitive to particular circumstances and do not ignore limits of restituo in integrum in which moderation must be fostered. Awards also needs to be predictable.

2) Right of parenthood : Neither does the Charter of Rights and Freedoms nor the Quebec Charter protect the right to maintain a parent-child relationship.

3) Loss of Life or of life expectancy : the right to life is extinguished when the victim dies, hence it does not become part of a victim’s patrimony and cannot be transmitted to heirs: No compensation.

4) Exemplary damages : Interference with the right to life of victim was not “intentional”. There is intentional interference when the person who commits the interference has a state of mind that intends the consequences.

CLASS 11 Remedies (Continued) Assessment of Extra-contractual Damages: Moral Damages (continued) - Defamation as an example Nov. 14

Art. 35 and 1457 C.c.Q.

Art. 35: Every perosn has a right to the respect of his reputation and privacy. No one may invade the privacy of a person without the consent of the person unless authorized by law.

Art. 4 of the Quebec Charter of Human Rights and Freedoms, L.R.Q. c. C-12

Every person has a right to the safeguard of his dignity, honor and reputation.

R. Jukier, Non-pecuniary Damages in Defamation Cases (1989) 49 R. du B. 3.Limitation upon non-pecuniary damages in defamation cases - In [Munro v. Toronto Sun Public Corp.]: as per Holland J, the ceiling placed on the

recovery of moral damages in personal injury cases should be directly applicable to defamation cases.

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- Morse: criticizes that Holland’s analogy b/w damage awards in personal injury and defamation cases is “untenable” and indicates that moral damage awards in defamation actions should not be limited by any ceiling. Because in personal injury cases, the awarded of non-pecuniary damages is predicated upon there being full compensation for pecuniary loss.

- Jukier’s view: this criticism and of the analogy made b/w moral damage awards in personal injury and defamation cases is unfoundated for two reasons:

1) It is true that defamed plt. suffer mainly non-pecuniary damages, however there is no limit on pecuniary damages in defamation actions and nothing stops a defamation victim from recovering substantial pecuniary damages if they are a direct and immediate cause of the delict. In fact, Quebec courts often compensate defamation victims for their pecuniary losses. SO, the full pecuniary compensation justifies the ceiling placed on the recovery of moral damages in all types of cases.

2) There are personal injury cases in which the court has applied the trilogy’s ceiling on moral damages and in which the victim was granted no pecuniary damages at all. Equally, full pecuniary compensation is made in a defamation action when a judge considers the existence or extent of economic loss suffered by the victim. Such as loss of employment, loss of clientele, general business losses, loss of income and even potential loss of income where the defamation diminished the plt.’s future employment opportunities.

- It is argued that as long as a ceiling remains on moral damages in personal injury cases, it is unwarranted to allow non-pecuniary damages in defamation cases to soar above such ceiling.

- The policy consideration in the trilogy concerned the arbitrariness of a moral damages award. The arbitrary nature of moral damages does not change with the nature of the delict. SO the similar considerations are at play in all moral damage cases and the solution is not to compartmentalize different civil wrongs and apply different considerations to them all.

- There are several factors present only in defamation cases which may even lower non-pecuniary awards than in personal injury actions.

a) two competing interests in defamation cases, which is absent in personal injury cases. freedom of expression vs. the protection of the individual’s reputation.

-the lower the amount of damages that may be granted by a court, the less likely it is that publishers will impose self-censorship and the less likely it is that we will encounter the “chilling effect”.

b) The damages that a defamation victim may suffer is the temporary nature of the loss. While the damages caused by defamation can be very serious and devastating, they rarely produce a life-long condition.

-[Farrel v. Canadian Broadcasting Corporation]: “A man’s damaged reputation may be restored; lost limbs cannot be replaced”. -[Munro]: despite serious allegations and incidents in the past, the politician had continued to be re-elected. -[Synder]: the non-pecuniary loss suffered by a victim of defamation is in general temporary.

c) Defamation cases centers on the availability of alternative remedies at the disposal of the defamation victim, which is unavailable to the victim of personal injury case.

-[Langlois v. Drapeau]: in most instances the general damages resulting from defamation of character are effaced by the judgment that condemns the def. -It is doubtful whether the judgment per se is an effective remedy, but the mitigation of damages by judicial declaration is enhanced when the court orders the def. to publish the court’s judgment.

[Synder]: Lamer J, “I also took into account the remedial effect of publication in determining the reasonable compensation appellant should receive in the case at bar”.

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-the cost to the def. of redressing the wrong-doing through such alternative remedies should not be considered to form any part of a moral damage award. Rather, the costs to the def. associated with executing the alternative remedy are part of the pecuniary damages awarded to put the parties back into the position they were in before the commission of the delict.

SO, Bridge reasonably assert that “there is something odd about a legal system which often awards more to defamation claimants than to claimants who are physically crippled”.

- The justification of low ceiling for defamation cases. - the answer depends on the approach taken by the courts in assessing the award

of moral damages within the stated limit. - Under the functional approach: the limit placed on moral damages should be the

same in all cases, regardless of the delict and regardless of the seriousness of the injury. here solace is to be the key to the quantification of such damages.

-the practical problem: the SCC did not in fact apply the functional approach either in the trilogy or in Lindal b/c the Court never consider what things and activities would have made life more endurable for the victim. -Klar argues that “the sole basis for the award was consideration of the seriousness of the plt.’s injuries”.

- Under the conceptual approach: a strong argument can be made that defamation victims should, as a general rule, receive lower moral damages than personal injury victims.

-[Synder]: Lamer J in his dissenting judgement, by applying the conceptual approach + the temporary character of the damages + the alternative means of redress available to the defamed victim + the consideration of the “chilling effect” large damages awards can have on freedom of speech, he ruled a lower ceiling on moral damages in defamation cases.

Evaluating Non-Pecuniary Damages in Defamation Cases- The position of the defamation plaintiff

- The social status of the defamed plt. is emphasized by the court when granting the awards.

- The different treatment of public and private individuals: Public figures or people holding public office are entitled to recover higher damages when defamed.

[Snyder] in Superior Court: Deschenes C.J. -> the basis is that society should do nothing to dissuade capable people from entering public life. -public office generates higher damages. The same principle often applies to private individuals with a respected and influential social position. Jukier: Quebec courts are not making an important distinction b/w the social status of the plt. and his prior reputation in the community The higher reputation the greater the damages. So she thinks that it is not necessary to created a dichotomy b/w the public and private spheres, b/c it should not automatically be assumed that public officials, by their very position, deserve higher damages than private individuals whose prior reputation may be just as worthy of protection as the reputation of those who entered public life.

In U.S. case [New York Times v. Sullivan]: public officials cannot recover damages for defamation unless they can prove ‘actual malice’. – the mush higher burden placed on public officials. the risk theory: having voluntarily thrust themselves into the public eye, have exposed themselves to the increased risk of injury from defamatory statements.

The Quebec legislator did not distinguish b/w public and private individuals in s.4 of the Charter.

- The situation now in Quebec: courts are continuing to grant some of the highest awards of damages to public officials.

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- Extent of the dissemination of the defamatory statements- The extent and the duration of the publication of the defamatory statements remain a

very central factor in the evaluation of non-pecuniary damages in Quebec cases. - Jukier: Generally, the more people who receive the defamatory information, the

greater the effect of the delict and the greater the damage. However, it is not sufficient to look at the extent of publication, in a statistical fashion, in isolation. It must be examined in the context of the whole case and, in particular, in function of 3 other related factors: i) the actual effect of the publication; ii) the importance of wide publicity to the particular plt. and iii) the source of the defamation.

i) the actual effect: [Cêté v. Syndicat des Travailleures et al.] : the statement is published in an area in which the person lived and worked. [Trahan v. Imprimerie Gagné ltée] : publication of a defamatory statement in a small town can have a large impact b/c such areas usually thrive on ‘grapevines’. [Hudon v. CHLT-TV Inc.] : even thought the widely showing, the actual effect of the defamatory film was not seriously damaging to the plt. ($ 5,000).

ii) The importance of wide publicity: certain plts., depending on their line of work, will be affected more seriously than other plts. – when the reputation are important to their profession, employment or business. -most Quebec cases recognized this factor. -it is in this regard only that the plt.’s holding of a public office may be relevant. See case [Desrosiers v. Publications Claude Daigneault Inc.] – a mayor suffered considerable moral damages ($20,000).

iii) The source of the defamation: the influence and credibility of the source of that statement [Dimanche-Matin v. Favien]: it is important to take into account the reputation of the journalist and the newspaper. [Gingras v. Entreprises Télécapitale Ltée]: the popularity and influence of radio show announcers in verbal defamation cases. the Q from whom the defamatory statements emanate. [Cêté v. Claveau]: when the damaging words spoken by a fellow professional, in this case a lawyer against another lawyer, there are more damaging than words spoken by a layman or someone in a different field.

- The presence of a retraction or apology- The presence or absence of a retraction or apology is a central factor in the

evaluation of non-pecuniary damages in defamation cases. - The majority of Quebec defamation cases state that the existence of a retraction or

apology by the def., although never a total defense, can serve to diminish significantly the amount of damages to which a plt. is entitled. [Cêté v. Claveau]

- The inverse is also true. If the def. reiterates the defamatory statement, the damages granted by the court may be augmented since the repetition of the defamatory remark is seen as a source of additional damage to the plt. [Flamand v. Bonneville]

- The retraction, like any other factor, must not be considered out of context the time[Camus v. Poirier]: the defamatory remarks were retracted by the def. immediately upon the receipt of a mise-en-demeure. [Desaulnier v. L’Action Sociale]: the retraction was made too late to mitigate damages. where: the retraction should be published at the same audience that read or heard the original defamatory statement. [Lessard v. Gagne]

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[Snyder v. Montreal Gazette]: the Gazette had published a retraction but it was not published in as conspicuous a place as the original article. the retraction must be made genuine and be made in good faith. [Good v. North Delta-Surrey Sentinel] BC case: Wood J. not only did not reduce the damages awarded on the basis of the tardy and non genuine retraction, but he used it as a factor justifying higher damages. [Trahan v. Imprimerie Gagne Ltee]: a refusal to retract was considered a relevant factor in awarding punitive or exemplary damages. side effect. [Melasco]: the retraction may not always have the mitigating effect on damages that judges assume. “It could well do more harm than good again to publicize the affair at this time”. SO, the judges ought to look at the issue of retraction in the context of each case and not apply it, as an automatic reflex, to reduce or increase damages in every case.

- Conduct of the parties- Conduct of the def.

- Generally refers to the good or bad faith of that party and to the intentional or unintentional character of the defamatory statements that were published.

- Quebec defamation cases also use the presence of bad faith and intentional wrongdoing to justify the award of punitive damages pursuant to s.49 of the Quebec Charter. Jukier: Quebec jurisprudence is in a confused state in this regard. Courts consider the bad faith or intention in both evaluating the compensatory moral damages AND granting punitive damages. She think that the intention of the def. should not be a factor relevant to the setting of moral damages, it is a factor relevant to the issue of punitive damages under s.49 of Charter.

- Conduct of the plt. - The plt. contributed to his or her own damages or he or she did not do what was

possible to mitigate them. - Courts, under art.1053 C.c (1457 C.c.Q), apply the general principle of

contributory negligence. - The plt.’s ability to mitigate damages.

- Gravity of the defamatory statement- [Neeld v. Western Broadcasting Co. Ltd.]: “The more the libel gets away from the

truth the greater is the effect on the award of damages. The closer the libel is to the truth the less the damages must be”.

- Gravity v. Proximity to the Truth. - BUT the gravity of the defamatory remark should be considered cautiously. Eg.

One can image statements that are so exaggerated and are so far from the truth that the effect of the defamation results in very little damage to the plt. Such enormous and exaggerated attacks are often so incredible that no one believes them. Rather than the reputation of the plt. being ruined, it is the def. that loses credibility. In [Parizeau v. Lafferty et. al.]: “les comparaisons faites par le déf. étaient si grossière et si loin de la vérité qu’il est probable que peu de gens aient pu être influencés négativement par ces écrits et que les rares qui ont pu l’être étaient sans doute des personnes qui avaient déjà une opinion défavorable des damandeurs”.

- Punitive damages- Quebec courts have not hesitated to award punitive damages under s. 49(2) of the

Charter although the amount granted remain quite modest.- The criteria the courts used to set the amount of punitive damages awarded in

defamation cases are not clear. - The factors relevant are:

-the punitive damages are independent from any moral or material damages awarded to a defamation victim;-ceiling could not be placed in this type of damage;

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-the purpose behind the punitive damages is to punish the def. and prevent recurrence of such defamation by both the def. and public. -the requirement of intentional and malicious acts of defamation by the def. -some commentators argue that intention to harm is not necessarily required. The reckless carelessness that the def. knows of the immediate negative consequences of his act is sufficient to trigger punitive damages under s.49(2).

Jukier: think the requirement of bad faith is the touchstone for the award of punitive damages. The mere lack of diligence or judgment on the part of the def. ought not to be enough to trigger s.49 (2) of the Charter.

- Alternative remedies - Damages are largely an inadequate means of redressing the wrong caused by

defamation. B/c the primary goal for the plt. is to restore his/her damaged reputation.\- Injunctions

- An interlocutory injunction is an extremely effective remedy for the plt. who believes himself or herself defamed, it is too dangerous a remedy to be granted without a significantly higher threshold test than that applied generally to injunctions under art. 752 C.c.P.

- Publication of judgment. - Retraction and Reply.

Parizeau v. Lafferty, Harwood & Partners, [2000] R.R.A. 417 (C.S.)Facts: A financial company that sends out reports to its paying clients compared Parizeau and Bouchard to Hitler. He refused to apologize and maintained the similarity between the politics of the PQ Nationalism and those of Hitler’s Naziism. Note that the publication was before the “money and the ethnic vote” so the court said they were inadmissibile as evidence that the comparisons were founded, because you can only use statements that had already been made at the time the alleged defamation occurred to support a defence of truth.Issue: Was this defamation? Holding: Yes, this crossed the line. Ratio: - defamation is a limit to freedom of expression – the task is always to determine if this limit

has been surpassed- defamation is: written or oral communication that causes a lack of esteem or consideration for

someone, or that solicits disagreeable or unfavourable sentiments towards him. They imply an unjust undermining of the person’s reputation by the wrong things that are said about them by the hatred, disdain or ridicule to which he is exposed

- in order for an action in defamation to succeed there must be fault: this can result from two types of conduct – (1) where there is intention to injure, or (2) where there is no intention to injure but where the victim’s reputation is nonetheless undermined by the defendant’s negligence, imprudence or rashness. Both conducts constitute a civil fault. IN other words, it is sufficient to refer to the ordinary rules of civil liability and to abandon the idea that defamation has to be founded on bad faith or intent to injure. Moreover, it does not result merely from the publication of false information: it can result when the information is true, but when the sole goal of publication was to injure the victim.

- the standard of the reasonable person is the proper test.- however, intention is important in so far as exemplary damages are concerned- the defenses of “commentaire loyal”: 3 criteria:

1) public interest in the subject matter2) honest intention to serve a just cause3) reasonable supportable conclusion with respect to the reported factsRe 1: is conceded. Re 2: The court also believe that Mr. Lafferty honestly believes what he wrote and that it was for the benefit of his clients. Re 3: are his conclusions reasonably supportable?

-Court says no. First of all, L doesn’t really know anything about Hitler or Nazi Germany: He was just going on what he thought Hitler was all about, having done no research or

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verification. Given the fact that there is no basis for his opinion, there is evidently nothing which it can reasonably be supported. Defence fails.

- Moral damages: the defendant argues that: Parizeau and Bouchard consistently said that they weren’t looking for cash, but wanted the court to draw the line between acceptable political debate and defamation. Thus, what they really want are exemplary damages. Second, the publication was only destined to 275 clients. Moreover, so many journalists condemned Lafferty’s hype and unfounded comparisons that any injury they suffered was short lived.

- Court says that even if exemplary damages is one motive, and even if they have decided to give any award to charity, that doesn’t mean that the court should still not award money for the moral damages they suffered.

- Moreover, those 275 clients were mainly big corporate clients that they knew would be spreading the report around.

- Finally, with respect to the third contention it is true that awards vary according to the gravity of the statement and the severity of the damages suffered

-Mr. Bouchard testified to being profoundly hurt by these statements, and that the possibility of being subjected to this type of criticism made him reevaluate his choice to lead a political life and subject his wife and kids to this ridicule-but, it is true that most journalists came immediately to their defence, so the injury was probably short-lived, and Parizeau did win the election in ’94 after all while Bouchard became the leader of the official oposition in Ottawa.-thus, given that they were affected for a short time and that the accusation were so outrageous that few people actually believed them, they get 10,000 each.,

- in terms of exemplary damages, the criteria to consider are:1) preventive, deterrent and punitive function2) conduct of the author of the delict3) gravity of the prejudice suffered4) capacity of the wrongdoer to pay5) the amount of compensatory damages already awardedthey get 10,000 in exemplary damages.

Defamation: Parizeau- Two big questions surrounding defamation:

1) Should the cap be applied? SCC says no, but Jukier says this makes absolutely no sense. Why have a cap on moral damages in personal injury cases, but not in defamation?

2) Is loss of reputation really more serious than physical pain and suffering? A reputation can be restored, the injury is temporary, whereas a personal injury is probably permanent

- awards in defamation cases are probably more arbitrary, and end up being more punitive than anything: high damages should be reserved for awards of punitive damages, if we’re going to cap personal injury we should definitely cap defamation

- moreover, we should worry about the effect of high awards of damages on freedom of expression: we don’t want to silence people because they are afraid of being sued

- in the USA, people who are public figures have little to no protection from defamation: the assumption is that if you put yourself under public scrutiny, that’s the risk you take. Short of malicious intent, it’s pretty difficult to win a defamation case if you are a public figure

- Jukier says that usually in defamation cases, the pecuniary damages are pretty low because there is rarely a true loss of income, and in point of fact, the non-pecuniary damages are also pretty low.

- Factors to consider in assessing whether there was defamation:1) Was it true? Lack of truth is not determinative, you can make a false statement without being

held liable. In the civil law you don’t necessarily need intention to convey a false statement, it may be enough that you were negligent.

2) Gravity of the statement: this is reminiscent of the conceptual approach: how serious was the statement? This factor implies that damages will vary according to the severity of the statement. However, this doesn’t always lead to more damages: a really bad statement might actually hurt you less because if it is so outrageous, then fewer people may have believed it. If this is the case, then it may be more akin to a personal approach.

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- How do cts approach the quantification of moral damages in the absence of the cap?-not very scientific… judge more attuned to the various factors at Parizeau SC. -At CA, relied heavily on diffusion factor: picked up by Le Devoir. While Lafferty intended this only for the 275 recipients, after being picked up by le Devoir it went everywhere… it matters not only how broadly it is diffused, but who is doing the diffusing. Le Devoir is not a smutty tabloid.-Also, “can’t push the Hitler button”: the gravity of the statements is very important. This has a direct bearing on the damages that wind up being given, this is a comparative sliding scale. It is not sophisticated.-further, there is a lack of retraction. -Jukier thinks that the above 3 factors are the important reasons. Damages are not linked to anything concrete.-Lafferty’s statements were unresearched.

CLASS 12 The Relationship between Private Law and Public Law Nov. 21Fundamental Rights and Civil Liability

The relationship between the CCQ and the QC charter?- Separate regime or just supplement existing regime?- What was the statue of right before the Charter?

-accordin to Charon’s article, 1053 was the Charter – it provided for reparation of harm to your person or property-ex: Chapu v. Romain: police disrupted a peaceful meeting of Jehovah’s Witnesses and the court used 1053 CCLC to find officers at fault and liable for damages – defamation, and ordinary principles of civil liability were called upon to repair injuries to dignity, honour, etc.

“Under 1053 the obligation to compesate flows from two essential elements: an injury suffered by the victim, and fault on the part of the author of the delict or quasi-delict. Even if no pecuniary damages is proven, there exists nevertheless, not a right to punitive or exemplary damages which the law of Quebec does not recognize, but without doubt a right to moral damages”.

-SO why did we need a Charter? Because it largely failed in the area of protecting privacy and the right to private life-it protected physical integrity but couldn’t go much further

- Moreover, in the K’al sphere, Jukier says the code was clearly insufficient-ex: Christie and York: SCC said it was ok for a tavern owner to refuse to serve a black man because of principle of freedom of K, individual liberty, etc: these often seemed to win out over principles of equality especially in the K’al sphere-Whitfield v. Canadian Marcone: employees were forbidden from fraternizing with the native inhabitants: this was upheld by the Court of Appeal-until 1954, marries women were considered incapable of contracting under 986 CCLC

- QC Charter is now part of public order: it has a supremacy clause which gives it quasi-constitutional status

Q: Why does the Que. Charter call a quasi-constitution? - The Charter is not an ordinary statute implemented by the Que. legislature in the same way as

any other enactment. It has a special status: it is a fundamental, quasi-constitutional statute of public order that must be given a large and liberal interpretation in order to achieve the general purpose underlying is as well as the specific objectives of its particular provisions.

- The natural of this human rights and freedoms legislation call for a large and liberal interpretation, the s.53 of Charter also ensures that statutes are interpreted in a manner consistent with the rights guaranteed in the Charter.

- it’s application is horizontal (between individuals) whereas Cdn Charter is vertical (individuals – state) - QC Charter can have vertical applicability to the same extent that 1053 can, but it is designed

more as a horizontal tool

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- So, how does the code interact with the charter?- Note: There is a lot of duplication (ex 3, 10, 35 CCQ and 1, 4, 5, Charter)- So, what’s the difference between saying it in the code or in the Charter?

-cases use the two synonymously, and Beliveau says there is no double recovery-preliminary provision of the Code says it must be read in harmony with the Charter

This leads us to two questions: QUESTION 1: Is the Charter an autonomous regime of civil liability?- Beliveau says NO: Gonthier says that the Charter does not create a parallel compensation system and

cannot authorize double compensation for a given fact situation- So, in Beliveau, sexual harassment was considered to be a workplace injury and therefore the

Act prevented claims in civil liability. Gonthier says this means no claim under QC Charter, either for compensatory or moral damages.

- L’H-D said that there could not be double recovery for compensatory damages, but that there is no reason not to allow the claim for exemplary damages, because theses are something additional. Normal civil liability does not have this function, it is only compensatory, so this is something extra that should not be barred under the statute. (Gonthier says that the exemplary damages are inextricably linked to the civil fault – the statute says you can’t have an action by reason of the injury: this is precisely what an action for exempplary damages is: it’s a civil action by reason of the workplace injury, you can’t separate the two)

- Jukier says why doesn’t L’H-D go all the way with this? Worker’s Statute also doesn’t compensate for moral injuries, only pecuniary, so if you can get exemplary under the Charter, you should also let people claim for moral injuries: there won’t be double recovery because moral damages and exemplary damages are both unavailable uder statute

- the only person who thinks that the Charter should be an autonomous regime is Popovici – he says the abililty to get cessation of the wrongful conduct is another important feature that militates in favour of recognizing it as autonomous

QUESTION 2: Does a violation of the Charter = Fault under 1457 CCQ? Also, can you violate the Charter without causing damage, or is the violation a damage in itself?- Gonthier in Beliveau says that the violation of a Charter right is equivalent to a civil fault

- The Charter sets the standard of reasonable conduct in society - these standards are subject to change and qualification over time, and the Charter is one such qualification, so it informs the standard of care under 1457

- the courts never undergo a separate analysis for the two: same thing in the Damas and Duphin case with the figting nurses: a breach of the charter is “ainsi une faute civil”, they say it in the same breath

- even in Aubry, L’H-D pays lip service to the idea that violation will not necessarily equal a fault, and says that the traditional elements of fault, causation and damage must always be established, but she never actually goes through with the fault analysis

- she didn’t ask if the photographer acted reasonably, if he ever tried to get consent, etc.- Popovici says this is a tautology: A breach of a charter right is a fault because breaching the charter is a

fault- Jukier says the only time this works the other way around (i.e. you breached 1457 therefore you

violated the Charter, rather than you violated the Charter therefore you violated 1457) is in defamation- in defamation, 1457 is used to inform the charter: if you have defamed, you have violated the

Charter, instead of Charter informing 1457- she says it’s because defamation has been around for so long that we keep using the same

analysis under the Charter, whereas other rights have received new articulation in the Charter.

Brasserie Labatt Ltee c. Villa (1994) CA Qué Facts :-appellant offered respondent position of vice-president in Montreal branch-respondent knew that company’s policy was that married employees had to relocate with their families -respondent rented an apt in Montreal while his wife continued to live in Quebec-respondent received letter from appellant advising him that if he and his family did not conform to the

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relocation policy he would be fired-respondent replied that this policy had not been negotiated with him, and that he could not decide for (force) his wife and children to move-5 days after the correspondence respondent was fired for not conforming with this policy-appellant’s did not have relocation policy written down, but justification for policy was that the absence of employee’s families damaged the employee’s availability for work, integration into the work milieu, and the efficacy of the company-court of first instance awarded damages to respondent for respondent’s expectation interests, and held that the respondent’s dismissal was unjustified, arbitrary and abusive -appellant appealed this decision.Issues :Was the respondent’s dismissal unjustified, arbitrary and abusive (against public order)? Holding :Appeal succeeded with respect to award -original award of damages reduced. But dismissal still unjustifiedRatio :Baudoin, J. held that the granting of the respondent’s job on the condition of relocation was against public order - CCQ art. 1373 and against the Quebec Charter prohibition of discrimination on the grounds of civil status-being married is certainly something that constitutes an element of a person’s civil status-dismissing respondent for not conforming with contractual obligation of relocating himself and his family is the equivalent of dismissing him for being married-the dismissal was based on his civil status as a married person-the dismissal is discriminatory b/c similar relocation obligations do not extend to those of different civil status (ie: divorced, separated, single, etc.)-for a contractual clause to be discriminatory and contrary to the Charter, it is sufficient to show that the clause has a discriminatory effect-the relocation condition is null b/c it contravenes public order and therefore the dismissal was not legally justifiable

Jukier-case is an eg of directive public order resulting in null k: judge holds that even if party consented, k is not valid b/c it goes against public order

-other judges don’t agree with Baudoin’s ratio: -Fish and Gendreau, JJ: Labatt’s policy is not discriminatory, but the firing was still wrong-firing wrong on basis of general public order: a co-contractant cannot make you agree to conditions that interfere with how you conduct your personal life-this ratio is not based on Que Charter - just like public order can allow courts to intervene in other cases, courts can use public order to intervene in cases where ks interfere with ppl’s personal lives

-this is more far reaching than case based on Que Charter

Preliminary provision of the C.c.Q.The civil Code of Quebec, in harmony with the Charter of human rights and freedoms and the general principles of law, governs persons, relations between persons, and property.

The Civil Code comprises a body of rules which, in all matters within the letter, sprit or object of its provisions, lays down the jus commune, expressly or by implication. In these matters, the Code is the foundation of all other laws, although other laws may complement the Code or make exception to it.

Art. 3, 10, 32, 35, 36 and 1457 C.c.Q.

Art. 3: Every perosn is fully able to exercise his civil rights. In certain cases, the law provides for representation or assistance.

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Art. 10: Every person is inviolable and is entitled to the integrity of his person. Except in cases provided for by law, no one may interfere with his person without his free and enlightened consent.

Art. 32: Every child has a right to the protection, security and attention that his parents or the persons acting in their stead are able to give him.

Art. 35: Every person has a right to the respect of his reputation and privacy.No one may invade the privacy of a person without the consent of the person unless authorized by law.

Art. 36: The following acts, in particular, may be considered as invasions of the privacy of a person.

(5) using his name, image, likeness or voice for a purpose other than the legitimate information of the public.

Art. 1-9, 10 and 49 of the Quebec Charter of Human Rights and Freedoms, L.R.Q. c. C-12

1. Every human being has a right to life, and to personal security, inviolability and freedom.

Juridical personalityHe also possesses juridical personality.

Right to assistance.2. Every human being whose life is in peril has a right to assistance.

Aiding person whose life is in peril.Every person must come to the aid of anyone whose life is in peril, either personally or calling for aid, by giving him the necessary and immediate physical assistance, unless it involves danger to himself or a third person, or he has another valid reason.

Fundamental freedoms.3. Every person is the possessor of the fundamental freedoms, including freedom of conscience, freedom of religion, freedom of opinion, freedom of expression, freedom of peaceful assembly and freedom of association.

Safeguard of dignity.4. Every person has a right to the safeguard of his dignity, honour and reputation.

Respect for private life.5. Every person has a right to respect for his private life.

Peaceful enjoyment of property.6. Every person has a right to the peaceful enjoyment and free disposition of his property, except to the extent provided by law.

Home inviolable.7. A person's home is inviolable.

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Respect for private property.8. No one may enter upon the property of another or take anything therefrom without his express or implied consent.

Right to secrecy.9. Every person has a right to non-disclosure of confidential information.

Disclosure of confidential information.No person bound to professional secrecy by law and no priest or other minister of religion may, even in judicial proceedings, disclose confidential information revealed to him by reason of his position or profession, unless he is authorized to do so by the person who confided such information to him or by an express provision of law.

Duty of tribunal.The tribunal must, ex officio, ensure that professional secrecy is respected.

Exercise of rights and freedoms.9.1. In exercising his fundamental freedoms and rights, a person shall maintain a proper regard for democratic values, public order and the general well-being of the citizens of Québec.

Scope fixed by law.In this respect, the scope of the freedoms and rights, and limits to their exercise, may be fixed by law.

Recourse of victim for unlawful interference.49. Any unlawful interference with any right or freedom recognized by this Charter entitles the victim to obtain the cessation of such interference and compensation for the moral or material prejudice resulting therefrom.

Punitive damages.In case of unlawful and intentional interference, the tribunal may, in addition, condemn the person guilty of it to punitive damages.

Beliveau St-Jacques v. F.E.E.S.P., [1996] 2 S.C.R. 345. [Background reading]Facts: - Béliveau launched civil action based on the Quebec Charter against her employer and a co-

worker who had allegedly sexually harassed her.- She was subsequently compensated under the Act respecting industrial accidents and

occupational diseases for employment injury arising out of the same events.  Issue: whether the victim of an industrial accident who had been compensated under the Act could also bring an action for compensation under the Charter.Held:  Appeal and cross-appeal dismissed.  The appellant could not bring a civil liability action based on the Charter. The object of the Act was to provide final compensation for employment injury and resultant consequences.  The civil immunity of employers and co-workers under sections 438 and 442 of the Act was broad and applied to an action brought under section 49 of the Charter.  A civil action based on events giving rise to employment injury involved a civil liability remedy because it authorized a claim of compensatory and exemplary damages.  The Charter did not create a parallel compensation system or authorize double compensation. Victims of employment injuries were subjected to a special scheme which offered certain advantages but allowed them to obtain only partial, fixed sum compensation.

Appellant cannot base a claim for compensation on s. 49(1) of the Quebec Charter because she has already claimed through worker’s compensation scheme.

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Furthermore, absence of s. 49(1) claim precludes a claim of exemplary damages as per s. 49(2) of the Quebec Charter.

Gonthier (majority): Quebec Charter does not create a parallel compensation system or authorize double compensation.

L’Heureux-Dubé (dissent): s. 49(2) exemplary damages should be recoverable despite compensation under workers comp.

Where a civil statute excludes a civil code remedy, it also excludes a Quebec Charter remedy.

POINTS: Gonthier: 1. The Charter does not create a parallel compensation system;

- The violation of a right protected by the Charter is equivalent to a civil fault. - The violation of one of guaranteed rights is therefore wrongful behaviour, that is

breaches the general duty of good conduct. - Art. 1457 specifies that rules of conduct the violation of which results in civil liability

may derive from the law. 2. The Charter neither breaks new ground nor adds to the general law. – The burden of poof still

on the victim: injury, fault and causation. Baudouin: “specific statutory provisions in the Que. Charter and the Civil Code now protect what used to come under the general protection of the ordinary law. The Charter does not create a distinct, autonomous system of civil liability. It merely sets out a group of fundamental human rights, now in statutory form, the sanctioning of which is, however, ensured by the general principle in art. 1457. In this sense, there is no dual civil liability system or remedy”.

3. The nature of exemplary damages in s.49 (2): - the purpose of this damages is to achieve the dual objective of punishment and

deterrence; - the ability to award exemplary damages remains exceptional in Que. Law, it has not

been raised to the status of a principle. Art. 1621 C.c.Q clearly establishes that a judicial decision in this regard must be based on a specific provision.

- An action for exemplary damages based on the s.49(2) of the Charter can only be incidental to a principal action seeking compensation for moral or material prejudice.

- Even if it were admitted that an award of exemplary damages is not dependent upon a prior award of compensatory damages, the court must at least have found that there was an unlawful interference with a guaranteed right.

- It is the combination of unlawfulness and intentionality that underlies the decision to award exemplary damages.

- It is a civil liability remedy. Before the advent of the Charter, art. 1053 could provide the basis for liability for a violation of fundamental rights that are now protected. - in Chaput v. Romain, 1053 with respect to freedom of conscience and religion- art. 1053 has even been considered as a veritable charter of rights. - the flexibility inherent in the principle of civil fault was of course able to allow for judicial

adaptation to changes in standards of conduct and, correspondingly, in the content of human rights.

Aubry v. Éditions Vice-Versa Inc., [1998] 1 S.C.R. 591.Facts- Aubry's photograph was taken, published, and marketed without her consent.  Duclos, a

professional photographer, photographed Aubry seated on steps outside a Montreal building.  

- Aubry later learned that her photograph was published for free to illustrate a story in a special edition of the magazine, Vice-Versa.  

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- Aubry sued Duclos and Vice-Versa for $5,000 for moral prejudice to her reputation and honour and invasion of her privacy, and $5,000 in exemplary damages.  

- The Court of Quebec allowed the action in part and ordered the defendants jointly and severally to pay $2,000 damages for the moral prejudice suffered due to the photo's unauthorized publication which interfered with Aubry's right to her image and privacy.

- The Court of Appeal majority dismissed the defendants' appeal.Issue: Was the publication of the picture a moral prejudice?Held: Yup. Supreme Court dismissed the appeal.Decision: Majority: L’H-D- The issue here is the scope of the right to one’s image as an element of the more general

right to privacy. It also involves a balancing of the right to privacy and freedom of expression. - The infringement of a right guaranteed by the Charter gives rise, under s.49(1), to an action

for moral and material prejudice. Such an action is subject to the civil law principle of recovery. As a result, the traditional elements of liability, namely fault, damage and causal connection, must be established.

- There is a debate in Que. Law as to whether the right to one’s image is a separate right of personality or an element of the right to privacy. SCC held that the right to one’s image, which has an extra-patrimonial and a patrimonial aspect, is an element of the right to privacy under s.5 of the Charter as the interpretation in Godbout v. Longueuil.

- Since the right to one’s image is included in the right to respect for one’s private life, it is axiomatic that every person possesses a protected right to his or her image. This right arises when the subject is recognizable. There is an infringement of the person’s right to his or her image, and therefore fault, as soon as the image is published without consent and enables the person to be identified.

- The right to respect for one’s private life should not be confused with the right to one’s honour and reputation under s.4 of the Charter, even though in certain cases, wrongful publication of an image may in itself result in an injury to one’s honour and reputation.

- In the case at bar, the photograph in no way reprehensible and did not injury the respondent’s honour or reputation.

- The right to respect for one’s private life comes into conflict with another right protected by the Charter, in s.3, namely the right to freedom of expression. SCC held that freedom of expression includes freedom of artistic expression.

- The right to respect for one’s private life, like freedom of expression, must be interpreted in accordance with the provisions of s. 9(1) of the Charter. the balance b/w the two rights

- The public’s right to information, supported by freedom of expression, places limits on the right to respect for one’s private life in certain circumstances.

- The public interest so defined is thus conclusive in certain cases. The balancing of the rights in Q depends both on the nature of the information and on the situation of those concerned. Q of context.

- Situation in which the photographer is exempt from liability: the person “snapped without warning”.

- In the context of freedom of expression, SCC don’t consider the argument of “social useful” (the notion borrowed from U.S by the trial judge) is appropriate to adopt for the purpose of legal analysis. The Q is whether the public’s right to information can justify dissemination of a photograph taken without authorization.

- In this case, the appellants are liable a priori, since the photograph was published when the respondent was identifiable. It has not been shown that the public’s interest in seeing this photograph is predominant.

- An artist’s right to publish his or her work cannot include the right to infringe, without any justification, a fundamental right of the subject whose image appears in the work. In this case, there appears to be no justification for giving precedence to the appellants.

- With respect to the patrimonial aspect of the invasion of privacy, SCC held that the commercial or promotional exploitation of an image, whether of a well-known person or a private individual, can cause the victim material prejudice. In the case at bar, the photograph was used for commercial purposes, in particular to sell the magazine. So the respondent was

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entitled to claim an amount in exchange for the use of her image. – not the issue here b/c the respondent didn’t bring this claim.

Dissenting - The rules in civil law is different from the rule in Canadian Charter (= public law).

1) Mere infringement of a right or freedom does not necessary constitute fault. As the Crt in Beliveau stated that “it is … clear that the violation of a right protected by the Charter is equivalent to a civil fault”. Only unjustifiable infringement of freedom of expression, as the freedom is defied in public law, constitute fault.

2) Civil liability analysis doesn’t allow the burden of proof to be shifted b/w the parties. - The real issue here is whether the appellants committed a fault. a reasonable person

respect the rights and freedom of everyone and carries out his or her obligations while bearing his or her own rights in mind.

- In the case at bar, the dissemination of the respondent’s image constitute a violation of her privacy and of her right to her image = a fault. A reasonable person would have been more diligent and would at least have tried to obtain the respondent’s consent to the publication of her photograph. In balancing the public’s right to information, the appellants’ fault is not justified by that public interest.

- Causation is not at issue here. - As to damages, there is no evident shown that the respondent suffered prejudice. So no

damage, no compensation.

Arthur v. Gravel, [1991] R.J.Q. 2123 (C.A.). Facts: Gravel is an M.N.A . Arthur is a radio personality who made fun of Gravel. Gravel once worked as a janitor at a mental hospital. Arthur referred to him several times as a “mopoligste”, Also there was a passageway in the riding that had become dangerous, muggings, etc. So, Gravel said he put pressure to hire someone to monitor the passageway for security purposes. The guy they hired was himself a former criminal. SO, they made fun of Gravel for that too.Issue: Did the comments of the radio announcer amount to defamation? (Line between public criticism of politician and defamation)Holding: Majority: no defamation. Although it was obvious that Arhtur didn’t like Gravel and didn’t think him to be very competent, he did not cross the line. Dissent: Baudouin J.A. says this is not defamation, but rather a violation of art. 4 of the QC charter. You’re allowed to criticize politicians, not in demeaning him by ridiculing his former employment that is not a criticism of the political man, but rather serves just to ridicule and stigmatize someone because of their social origins. These are violations of his dignity. Ratio: Majority, McCarthy, J.A.- although public figures should expect to be subject to more scrutiny than private citizens, the

legislator did not make a distinction in the legislation between politicians and every one else. Running for public office does not renounce your right to dignity and fair treatment.

- there is a distinction between defamation: allegation or imputation of a fact that undermine’s ones dignity and insult: outrageous expression, contempt or abuse that has nothing to do with any fact

- in this case, Gravel was not defamed and cannot complain about the insults that Arthur made- Gravel pretends that Arthur implied that he had been a patient in the hospital, but judge

diagrees- Gravel says that Arthur insinuated that he had personally paid for and hired a criminal, but

judge finds that Arthur was just highlighting his involvement in a failed endeavour. He implied incompetence, but not dishonesty

- in terms of the mopology comments, he is definitely ridiculing him, but this does not constitute an abusive exercise of freedom of expression, also guaranteed by the Charter. It does not go beying what an elected official in a society such as ours is exposed to. To many condidtions on what media can and cannot say is too dangerous for democracy.

Dissent, Baudouin, J.A.:- this is not a case of defamation, but rather a case of art. 4 of QC charter (honour, dignity.

Etc.)- the problem is Baudouin doesn’t really explain the difference betweeen the two!

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- Gravel can be criticized for his political ability and competence, but not ridiculed because of his social origins

- when there is no connection between what is criticized and the job to be done, it is harder to justify insults in the name of freedom of expression

- of course public figures have to be a bit more tolerant, but let’s also not forget about the think skull rule which says that you take the victim as you find him. Politicians are not obliged to be completely insensitive

- the mopology comments were a violation of art. 4, the trial judge’s award of 20,000 in moral and 10,000 in exemplary is not very generous, but it is inapropriate to interfere with the trial judge’s appreciation and to substitute my own judgement.

A. Popovici, “De l'impact de la Charte des droits et libertés de la personne sur le droit de la responsabilité civile: un mariage raté?” [1998-1999] Meredith Mem. Lect. 49-94.

Preliminary provision of the C.C.Q. = “The Civil Code of Québec, in harmony with the Charter of human rights and freedoms and the general principles of law, governs persons, relations between persons, and property…”

Popovici says there is a separate regime of civil liability under the Quebec Charter.

CLASS 13 Revision and Preparation for the Examination Nov. 28

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