Marcotte, Baudouin, Bachand

Appeals from a Superior Court judgment granting in part an application for damages ($1,857,807) and an application for restitution of a thing not due, for damages, and a Paulian action ($2,425,666). Allowed in part.

Parent and Bissonnette - a senior employee of the Ville de Montréal and its subcontractor - set up a false invoicing scheme that made it possible for them to embezzle $5 million. In a first file, the Ville sued OS4 Techno inc., that had invoiced it for services that had not been rendered and would never be rendered. In a second file, OS4 sued the various actors and enterprises that, according to it, had participated in the fraud, including Bissonnette and Leblanc, a lawyer who allowed his trust account to be used to cash two cheques and then gave the money to Parent and Bissonnette.

Bissonnette

Considering his admitted participation in the fraud, Bissonnette incurred his solidary liability towards the Ville, under s. 10 of the Act to ensure mainly the recovery of amounts improperly paid as a result of fraud or fraudulent tactics in connection with public contracts (CQLR, c. R-2.2.0.0.3), for the entire loss resulting from the embezzlement. With respect to Bissonnette’s liability towards OS4, arts. 1536 and 1537 of the Civil Code of Québec (S.Q. 1991, c. 64) provide that the solidary debtor can only recover from co-debtors their respective shares of the solidary obligation. The judge therefore erred in condemning the various actors solidarily with respect to OS4. Bissonnette could not be condemned to solidarily reimburse OS4 more than his share of the liability for the prejudice caused, which the judge determined as 27%.

Moreover, OS4 amended its application to institute proceedings in 2012 to include a Paulian action concerning the transfer of the undivided half of the immovable belonging to Bissonnette and his spouse. At that point, the Ville’s claim against OS4 and Bissonnette, and by extension OS4’s claim against Bissonnette given their solidary liability, existed and was certain. In addition, that application was made less than 1 year after the transfer, which had deliberately reduced Bissonnette’s patrimony to the detriment of his creditors. Therefore, the judge did not err in finding that the transfer could not be set up against them.

OS4

The judge could conclude not only that OS4 had knowingly participated in the fraud, but also that it had been a key player in it. As a result, it was solidarily liable under s. 10 of the Act. Moreover, in light of case law, the obligation imposed by art 1479 C.C.Q. must not be interpreted in such a way as to make the victim bear part of the consequences of the fault committed by the responsible party, since this would be contrary to the very principle of civil liability and the right to reparation that flows from it. Thus, the damage suffered by the Ville as a result of the transfer of the money abroad should not be seen as a mere aggravation of a prejudice it had begun to suffer when the money was taken from it.  Rather, it must be seen as an additional prejudice arising from the separate faults of which it was the victim, and for which it cannot be held liable under article 1479 C.C.Q.

Leblanc

Although Leblanc was not aware of the fraudulent scheme and did not actively participate in it, the use of his trust account denotes careless and reckless behaviour constituting a civil fault which caused the damage suffered by the Ville. He could, however, be held liable only up to the amount that passed through his account. His obligation to repair the damage must be considered in solidum vis-à-vis the Ville, as his liability is extra-contractual and not contractual, unlike that of OS4. Since the judge determined Leblanc's share of liability as 1%, and this percentage has not been called into question, this value should be maintained.

Text of the decision: http://citoyens.soquij.qc.ca