Québec – parties renounce referral to arbitration but court later confirms issues not public order, still arbitrable

In Gestion George Kyritsis Inc. v. Balabanian, 2020 QCCS 1806, Madam Justice Claude Dallaire asserted public order limits to the arbitrability of certain disputes but, on the facts, held that the dispute did not pass those limits.  Dallaire J. held that where a declaration of improbation (annulment) is required to annul an authentic act received before a notary and registered in the land registry office, only a Superior Court could issue that declaration.  Challenge to the validity of a notarial act alleging a notary’s non-compliance with the mission given by legislation is a matter involving public order.  In the circumstances, because the nullity of the act could issue on grounds which did not require improbation, an arbitrator could have decided the matter.

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Québec – trial judge on own initiative quashes subpoena issued to mediator

Without need for application by either the opposing party or the proposed witness, Madam Justice Céline Gervais in PC Avocats inc. (Perras Couillard Avocats) v. Perreault, 2020 QCCQ 1972 quashed a subpoena sent to the attorney who served as mediator in court-supported mediation.  In quashing it proprio motu, Gervais J. explained to the self-represented litigant that the mediator was not compellable and all that transpired during the mediation was confidential.  Gervais J. also commented on the role/liability of lawyers in a client’s own decision to engage in mediation and negotiate a settlement.

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Québec – forum selection clause does not eliminate courts’ jurisdiction to issue provisional measures

In Associated Foreign Exchange Inc. v. 9189-0921 Québec Inc. (MBM Trading), 2020 QCCS 1823, Mr. Justice Michel A. Pinsonnault determined that the courts of Québec had jurisdiction to issue a Mareva injunction over assets located in Québec despite the parties’ prior, uncontested agreement that the courts of Ontario had exclusive jurisdiction over the merits of their dispute.  Pinsonnault J. found support for that determination based on the clearer result, set out expressly in Québec’s substantive and procedural codes, confirming the Québec courts’ jurisdiction to issue provisional measures despite a final and binding agreement to arbitrate binding the parties and excluding the courts.

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Québec – use of confidential mediation exchanges permitted to prove fraud vitiating settlement consent

In Viconte inc. v. Transcontinental inc., 2020 QCCQ 1475, Madam Justice Céline Gervais recognized that that the exception to settlement privilege applies to permit a party to adduce confidential exchanges made in a mediation to prove the existence or scope of a transaction but she saw no principle under which that exception did not also apply if a party challenged the validity of a transaction and not its existence or scope.  The party resisting homologation of a settlement sought to prove that the other party had given false information or allowed it to be retained, thereby vitiating consent and justifying annulment of the settlement.  Gervais J. cautioned that her decision was only a preliminary one and did not consider the difficulty a party may have at trial to prove its allegations.

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Québec – post-mediation dispute over existence/terms of agreement permits disclosure of confidential exchanges

In Bisaillon v. Bouvier, 2020 QCCA 115, the Québec Court of Appeal applied the exception to confidentiality of mediation, confirmed in Union Carbide Canada Inc. v. Bombardier Inc., 2014 SCC 35, [2014] 1 SCR 800, allowing disclosure of confidential exchanges necessary to prove (i) that an agreement resulted from mediation or (ii) the scope of the agreement which the parties acknowledged making. The parties could but did not tailor their mediation to eliminate that exception. Absent a clear, express statement of their intention to prevent subsequent disclosure, the exception applied to permit disclosure. The mediator’s summary of the agreement was only a simple writing, reflected his understanding of the agreement’s terms and did not bind the parties unless signed by them.

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Québec – crossclaim triggers arbitration though agreement to arbitrate silent in that regard

Relying on the contracts and the parties’ respective claims, Mr. Justice Éric Dufour in Kolinar Real Estate Inc. v. Cadieux, 2019 QCCQ 7183 determined that Defendants’ crossclaim triggered the parties’ particular agreement to arbitrate unless the claim fell within the $15,000.00 level for Small Claims division’s jurisdiction.  Defendants’ crossclaim exceeded that level and Dufour J. held it was not dilatory.  Without express mention of Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34 (CanLII), [2007] 2 SCR 801, Dufour J. effectively determined jurisdiction first by “only superficial consideration of the documentary evidence in the record” and applied the approach, familiar in many court rules, which allows a crossclaim to impact jurisdiction set by amount of claim.

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Québec – tardy litigation, due to attorneys’ failure to file post-award proceedings, resists dismissal

Acknowledging Plaintiffs’ eventual challenges at trial with a lapsed prescription (limitation) period, Mr. Justice Martin Castonguay in Truong v. Brunelle, 2020 QCCS 55 refused to dismiss procedures stemming from a June 23, 2009 arbitral award.  Filed June 25, 2019, Plaintiffs’ litigation sought both homologation and damages stemming from non-compliance with aspects of the award, but the motion to dismiss eventually focused on only the damage action. Castonguay J. held that Plaintiffs’ attorneys’ failure to finalize and file relevant pleadings justified exercising discretion to allow their case to proceed.  His reasoning applies equally to late applications to homologate awards.

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Québec – attorney’s lack of knowledge of arbitration clause justifies late request for referral to arbitration

In 9107-7719 Québec Inc. v. Constructions Hub Inc., 2020 QCCQ 1706, Madam Justice Johanne Gagnon readily extended defendant’s delay to apply for referral to arbitration.  The 45 day delay was not a strict one and extending it was justified by explanations given by defendant’s attorney, including attempts to settle, an intervening holiday break and being unaware that the contract contained an agreement to arbitrate.  Gagnon J. accepted defendant’s application filed 77 days after service of the action and, having considered it, granted it but declined to declare plaintiff’s action abusive.

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Québec – agreement to arbitrate cannot exclude parties from court’s jurisdiction over breach of public order legislation

In Bois Marsoui GDS Inc. v. Directeur des poursuites criminelles et pénales, 2020 QCCS 1327, Mr. Justice Carl Thibault held that an agreement to arbitrate contained in a contract signed with a government entity/agency did not allow merchants to exclude themselves from application of public order environmental legislation. Thibualt J. held that public order provisions aimed at protecting public well-being would lose their utility if parties could derogate from them by contract. Though not stated, the reasons would also support the conclusion that a government entity/agency lacks sufficient authority to contract out of the court’s jurisdiction to resolve disputes involving penal provisions related to laws of public order.

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Québec – court could enjoin contract termination to preserve arbitral jurisdiction to determine merits of termination

Despite dismissing the application for provisional injunction, Madam Justice Élise Poisson in Groupe Sidney Santé Inc. v. Centre intégré de santé et de services sociaux de Lanaudière, 2020 QCCS 1068 did determine that applicant demonstrated urgency related to the arbitrator’s jurisdiction and the merits of the dispute. Poisson J. agreed that respondent’s notice to resiliate (terminate) the parties’ contract would affect the status quo and impact on the scope of the arbitrator’s jurisdiction to determine the merits of the notice of termination.  The decision is a rare illustration of a court accepting it could intervene to preserve for arbitration a fuller scope of dispute on the merits.

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