Court of Appeal of Quebec

Chambre des notaires du Québec c. Compagnie d'assurances FCT ltée

August 28, 2018


Schrager, Mainville, Gagné

Appeals from a judgment of the Superior Court dismissing an application for a permanent injunction and a declaratory judgment. Dismissed.

Respondents are title insurance companies. When a financial lending institution requires title insurance as part of a hypothec refinancing, they also offer the lender hypothec loan administration services. The appellants, the Barreau du Québec and the Chambre des notaires du Québec, claim that the respondents are therefore performing acts that fall within the exclusive prerogative of notaries and lawyers.

Relying on Pauzé v. Gauvin (S.C. Can., 1953-12-18), SOQUIJ AZ-50293073, [1954] 1 S.C.R. 15, the trial judge applied a narrow rule of interpretation for laws covering the exclusive practise of a profession. The rule of interpretation that emerged from that decision is not merely that laws granting a professional an exclusive right to practice should always be narrowly interpreted, but rather that, when the provisions of these laws are ambiguous, they should not be interpreted so as to extend the exclusive right to practise beyond what is necessary to achieve the purpose of the law, i.e., the protection of the public. The narrow rule of interpretation adopted by the judge should be set aside in favour of that more nuanced rule.

Contrary to the appellants’ arguments, a deed of hypothec need not be drawn up by a notary pursuant to arts. 2693 and 2988 of the Civil Code of Québec (S.Q. 1991, c. 64), or s. 15(1) of the Notaries Act (CQLR, c. N-3). The law simply requires that the act’s essential formalities be certified by a notary and that the scope of the act be explained to the parties by such a professional. The evidence reveals that the duty to inform owed to the grantor is fulfilled by the officiating notary with respect to the services provided by the respondents.

The appellants have also failed to establish that the respondents are contravening s. 15(1) of the Notaries Act and s. 128(2)(b) of the Act respecting the Barreau du Québec (CQLR, c. B-1). The deeds of hypothec and hypothec deeds of subrogation at issue come from the relevant financial institutions and are standard contracts prepared by the lawyers or notaries working in such institutions. Therefore, the problem is not the drawing up of such acts, but rather the entry of additional information (names, cadastral numbers, interest rates, etc.) into these pro forma contracts. The information entered, however, is checked twice, once by the respondents and again by the officiating notary.

Finally, the argument regarding legal opinions is rejected. The respondents briefly review the land register and inform the financial institutions of any issues identified. The financial institutions in turn inform their client borrowers so that they can take the necessary steps to remedy such issues. The purpose of these activities is to issue a title insurance policy, not a title opinion.

Last, the incidental appeal based on art. 342 of the Code of Civil Procedure (CQLR, c. C-25.01) must be dismissed because the grounds of appeal raised are inconsistent with the trial judge’s findings of fact. The judge carefully reviewed the evidence and concluded that the Chambre des notaires had instituted the proceeding for the primary purpose of protecting the public and not for the purpose of trade protectionism.

*Summary by SOQUIJ

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