The Second Opinion: Dispensing Equity in Quebec through In Solidum Liability
In Bourque v. Poudrier, 2013 QCCA 1663, the Quebec Court of Appeal has extended the scope of in solidum liability to ensure recovery for damages resulting from professional negligence.
In the Bourque case, the claimants wished to purchase land that was free of any rights of way or other servitudes. The seller fraudulently confirmed that no such rights existed on the land. Further, the buyers’ notary erroneously confirmed the absence of such rights, despite the fact that he had participated in the preparation of the deeds granting them. After completion of the sale, the buyers discovered the servitudes and failed in negotiations to have them removed or relocated. Accordingly, the buyers sued to annul the sale and for in solidum condemnation of the seller and the notary for repayment of the purchase price.
Under Quebec law, in solidum liability arises where two or more wrongdoers commit distinct faults, often arising from different legal sources, causing one prejudice to the victim. As regards the victim, in solidum liability has the same effect as joint and several or solidary liability in that it permits the full recovery against any of the wrongdoers. In solidum liability arises where the exceptional regime of joint and several liability does not apply.
The first instance judgement in Bourque refused to condemn the notary on an in solidum basis for return of the purchase price because the legal effects of annulling the sale could only apply between the parties to it. The Quebec Court of Appeal reversed this decision.
The Court of Appeal indicated that in solidum liability had been applied to award damages in similar cases of professional negligence where the contract in issue was not annulled. Further, the court stated that in solidum liability is based in equity and intended to be flexible enough to protect a creditor from the effects of the insolvency of one of several debtors. It is also intended to avoid a multiplicity of proceedings. The Court of Appeal recognized that the notary’s fault was causally subsidiary to the fraudulent misrepresentation of the sellers. Nonetheless, the liability of the notary was not subsidiary or conditional upon the seller’s failure or inability to reimburse the buyer.
The Court of Appeal stated that the quantum of liability of the sellers and notary was the same, but the source of liability was different. The sellers were liable to return the purchase price based on the nullity of the sale. The notary was liable to the buyer for damages resulting from the notary’s fault, i.e. payment of the purchase price for a property that was unusable. The court recognized that the buyer could not pursue the notary to obtain the equivalent of the purchase price without at the same time suing the seller to annul the sale. In this regard, the Court of Appeal recognized that its decision is an extension or adaptation of in solidum liability in the pursuit of an equitable solution.
The Bourque decision appears to be the first in Quebec in which liability among debtors on an in solidum basis is interdependent. The point of in solidum liability is to permit a creditor to pursue individually any of multiple defendants who have caused the same damage through distinct faults. The claimant in the Bourque could not have pursued the notary alone for damages equivalent to the purchase price. The claimant would have been unjustly enriched if compensated for the price while keeping the property purchased. It is important to note that the Bourque decision arose in the context of professional negligence. It may provide a basis for applying in solidum liability to other instances of professional negligence resulting in annulment or termination of a contract with a third party.
The McCarthy Tétrault Opinions Group consists of members of the firm’s litigation department whose practices focus on written advocacy and the provision of strategic advice and opinions in the context of complex business disputes and transactions. The members of the Opinions Group are Anthony Alexander, Martin Boodman, Brandon Kain, Hovsep Afarian and Kirsten Thompson.
annulment of contract in solidum joint and several professional negligence sale solidary