2011 QCCA 748, 2011 QCCA 748

R.J. c. Clément 2011 QCCA 748 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-019636-091 (500-17-021730-042) DATE: APRIL 14, 2011 CORAM: THE HONOURABLE LOUIS ROCHETTE, J.A. JACQUES A. LÉGER, J.A. JACQUES VIENS, J.A. (AD HOC) R. J. APPELLANT – INCIDENTAL RESPONDENT – Plaintiff – cross-defendant v. PHILIPPE E.

CLÉMENT RESPONDENT – INCIDENTAL APPELLANT – Defendant – cross-plaintiff JUDGMENT [ 1 ] THE COURT ; - Ruling on the main appeal and on the incidental appeal from a judgment rendered on March 31, 2009, by the Superior Court, district of Montreal (the Honourable Madam Justice Danielle Grenier), which dismissed the appellant’s action and the respondent’s counterclaim, with costs; [ 2 ] After having examined the file, heard the parties, and on the whole deliberated; [ 3 ] For the reasons of Rochette J.A., with which Léger and Viens JJ.A. agree; [ 4 ] DISMISSES the appeals, with costs in each case. LOUIS ROCHETTE, J.A.

JACQUES A. LÉGER, J.A. JACQUES VIENS, J.A. (AD HOC) Mtre Jean-François Rousseau ROUSSEAU, SPÉNARD For the appellant – incidental respondent Mtre Frédéric Allali ALLALI AVOCATS For the respondent – incidental appellant Date of hearing: February 17, 2011 REASONS OF ROCHETTE J.A.

[ 5 ] Mr. A. C. [Mr. C.] hurt his back following a work-related accident in 1982. The injury reappeared in November 1990. He had an operation in March of 1991 to insert a catheter in the lumbar region; the following April 6, the surgeon who performed the operation administered an injection via the catheter which had a disastrous effect on Mr. C.’s health. He suffered a vasovagal syncope, among other things, and remained in a coma for three days following cardiac arrests. There was irreversible damage to his brain. [ 6 ] On April 5, 1994, Mr. C. and his spouse, Mrs. M. D. [Mrs.

D.], through their lawyer, filed a civil liability lawsuit against the surgeon who gave the injection and the Hôpital St-Luc, where the events unfolded. [ 7 ] On August 24, 1995, the respondent appeared as the new counsel of record. He suggested to Mrs. D. that she obtain a power of attorney authorizing her to act on behalf of Mr. C., which was done on December 20, 1995. Mrs. D. was named as the mandatary to do [ translation] “any and all things that may be necessary or expedient for the administration of my affairs and for the liquidation of my property”. The power of attorney adds: [ translation] (

g) It is my express desire that the powers given herein survive any incapacity, particularly mental, that I may suffer, and I charge my Mandatary to take all the necessary measures to ensure the continuity of such powers, notwithstanding any incapacity that may affect me. [ 8 ] The professional mandate was officially given to the respondent on October 21, 1996, and stipulated the following: [ translation] IT IS HEREBY AGREED that: 1. All disbursements will be payable by us on receipt, with advances of a thousand dollars ($1,000.00); 2.

The fees we are to pay to Mtre Philippe Clément shall be fixed at thirty percent (30%) of the amount received in principal and interest; 3. All legal fees against one or the other of us will be paid by us on receipt; 4. We agree that this shall be a trial mandate only. In the event that a new agreement is not signed for a case under appeal, the figure of 30% mentioned hereinabove shall apply. 5.

In the event that the mandators revoke this mandate and appoint a new attorney, they shall pay Mtre Philippe Clément for all disbursements incurred, in addition to the fee of $200.00 an hour for the work he has already done, $150.00 an hour for the work done by Mtre Giuseppe Tomasino of his office and $100.00 an hour for the work done by Nicole Lefort of his office. In the event that the legal fees cannot be recovered from the other party, we undertake to pay them, over and above what is mentioned hereinabove. Any fees billed are payable within thirty (30) days.

Interest at the rate of 2% per month or 24% per annum will be charged on any past- due statements. This mandate shall take effect forthwith. [ 9 ] In the fall of 1997, negotiations began between the respondent and counsel for the surgeon being sued. On October 15, 1997, at the respondent’s request, Mrs. D. obtained a new power of attorney, this one notarized. Mr. C. authorized Mrs. D., without restriction, to manage and administer all his property, both movable and immovable.

This power of attorney also contained the following clause: [ translation] INCAPACITY CLAUSE In the event that the mandator becomes incapable of caring for himself or of administering his property by reason, in particular, of illness, deficiency, or impairment due to age which alters his mental faculties or his physical ability to express his will, the mandator appoints and constitutes the aforementioned mandatary to be his attorney, with the power, for and on his behalf, to: 1. Exercise all the aforementioned powers concerning the property of the mandator; 2.

Do all things intended to ensure the protection of the mandator’s person and, in general, his moral and material well-being. Without limiting the generality of the foregoing, the mandatary may, inter alia : … 4. The performance of the mandate stipulated in the aforementioned incapacity clause is subordinated to the occurrence of incapacity of the mandator and its homologation by the court, at the request of the mandatary appointed hereinabove. [ 10 ] It should be noted that on the same day, which is not insignificant, Mr. C. favoured Mrs. D. in a will. The trial judge wrote: [ translation] [46] …Mrs.

D. was then in discussions with a bank. With the money she expected to receive following the out-of-court settlement, she

planned to buy a house. It was a bank clerk who advised her to consult Mtre Jean G. Gravel. The new power of attorney dated October 15, 1997, contained an incapacity clause. Concurrently, Mtre Gravel drew up a will in which Mr. C. left his property to Mrs. D., as well as a deed of hypothecary loan for the purchase of the house. [ 11 ] On November 12, 1997, a settlement agreement was reached between the respondent’s clients and the surgeon. At that time, given Mr. C.’s condition, the question arose of putting him under protective supervision.

After a discussion with his clients and the surgeon’s counsel, the respondent decided to have the settlement ratified by the court and an application for this purpose was prepared on November 13, 1997. It was accompanied by a written acceptance in Mr. C.’s hand, dated the same day. Mr. C. stated that he had taken note of the settlement, declared that he agreed with its terms and instructed the respondent to accept the settlement in his name. The following allegations in the application, supported inter alia by a sworn statement from Mr. C., bear reproduction: [ translation] 5. The plaintiff-applicant, A.

C., is habitually capable of caring for himself and administering his property but it would be in his interest, as well as in the interests of all the parties to the settlement and their counsel, that the latter be ratified by the court; 6. Indeed, the plaintiff-applicant, A. C., has trouble remembering recent events, as it appears from a medical report, for which we ask the court’s leave to file under seal when the present application is heard; 7. On the other hand, the plaintiff-applicant, A. C., is well protected in that he has entrusted to the plaintiff, M.

D., who has an obligation to render an account under a general power of attorney , as it appears from this power of attorney, filed in support hereof as Exhibit R-1; 8. Given the medical report, the degree of incapacity, the age of the plaintiff-applicant, the vagaries of a trial, the vagaries of life and the fact that this is a partial settlement , the settlement agreed upon by the plaintiffs with the defendant-respondent, Dr. Hughes Germain, is reasonable in every respect and should be ratified by the court; 9.

Furthermore, on November 13, 1997, the plaintiff-applicant prepared in his writing and executed an acceptance of the settlement , which we also ask the court to file under seal when the present application is heard; [Emphasis added.] [ 12 ] On November 21, 1997, the Superior Court granted the application. Under the terms of the overall settlement, which amounted to $320,000 , Mrs. D. received $70,000 and paid the respondent the agreed remuneration, namely $21,000. This settlement was not disputed. [ 13 ] Mr.

C.’s share amounted to $235,000, of which the respondent retained $59,000 as his remuneration, taxes included, namely a net amount of approximately $52,000, plus $15,000 in legal fees paid by the surgeon’s insurer, for a total remuneration of $74,000. [1] The case continued against the hospital and another physician. [ 14 ] On March 12, 2002, Mrs. D. revoked the respondent’s mandate. A few weeks later, the respondent claimed $32,523.94 from his former clients, in fees for the period from March 1, 1998, through to March 12, 2002. On April 19, 2002, Mr. C. and Mrs.

D. responded with a request to the Barreau du Québec for a conciliation of the fees billed. Arbitration then followed. [ 15 ] On May 10, 2002, protective supervision was instituted in the interest of Mr. C., and the appellant, who is the daughter of Mrs. D. from a previous relationship, was appointed tutor to the person and property of Mr. C. The tutorship council was made up of only one person, Mr. Al.

J., the appellant’s brother. [ 16 ] On May 5, 2005, after a number of incidents, the Conseil d'arbitrage des comptes des avocats of the Barreau du Québec reduced the respondent’s account from $32,523.94 to $15,160.30 and set-off this amount against the sum of $15,000 paid to the respondent in legal fees following the settlement reached in November 1997, in which it nevertheless stated that it had no jurisdiction. [2] The Conseil considered this amount an overpayment. [ 17 ] In the meantime, more specifically on August 3, 2004, the appellant instituted the proceedings which concern us and focused on the November 1997 settlement.

In her capacity as tutor to Mr. C., she sought the cancellation of the mandate given on October 21, 1996, and the reimbursement of [ translation] “a sum of $50,000, representing the amount over and above a reasonable bill established at $45,000 for services rendered … in favour of Mr.

C. out of the total amount paid of $95,000”. [3] She also claimed compensatory damages of $25,000 for trouble and inconvenience [ translation] “ over many years” and exemplary damages of $25,000 on account of the exploitation of a person the respondent knew was in a state of incapacity. [ 18 ] For his part, the respondent filed a counterclaim and claimed extrajudicial fees for abuse of right, damages for abusive proceedings brought before the Superior Court and the Conseil d'arbitrage as well as reimbursement of the fees that should have been billed under the 1996 agreement, for a total of $48,208.06. * * * [ 19 ] The trial judge first ruled that the appellant’s action was not prescribed since Mr.

C. was, until the institution of protective supervision, unable to act. She wrote: [ translation] [14] The medical evidence in the record shows that Mr. A. C.’s incapacity predates 1995, the date on which, with his spouse, M. D., he

met the defendant for the first time. … [27] Inability to act is a question of fact. When Mrs. D. was looking after Mr. C.’s affairs, he was already incapable of consenting to anything whatsoever. He was, in fact, unable to designate a mandatary, whether this mandatary was his spouse or another person, and the prescription could not begin to run until the time Mr. C. was duly represented according to the rules established in the Civil Code of Québec , namely 2002. Thus, the action brought by the plaintiff against the defendant is not prescribed. [ 20 ] Next, the judge studied the basis of the action: [ translation] [32] The plaintiff’s action is based on

article 290 CCQ Unable to apply for an annulment of the acts performed before the tutorship – this would certainly not be in Mr. C.’s interest –, the plaintiff is applying to have the obligations resulting from such acts reduced , the evidence having showed, according to her, that Mr. C.’s incapacity was known to the defendant at the time the acts were performed. [Emphasis added.] [ 21 ] That being said, the judge accepted the evidence that the respondent could not have been unaware of Mr.

C.’s state of incapacity from their first contact in August of 1995, and that he failed to meet his obligations, inter alia , by not requiring that Mrs. D. put Mr. C. under protective supervision. On the other hand, she found an absence of damage pursuant to

article 290 CCQ : [ translation] [64] As it would not be in Mr. C.’s interest for the acts performed before the tutorship to be annulled, the plaintiff seeks to have the obligations resulting from such acts reduced . In her opinion, the out-of-court settlement reached on November 26, 1997, was inadequate under the circumstances. She is therefore requesting reimbursement of the unmerited fees. … [69] The defendant maintains that art 290 CCQ requires proof of the existence of damage actually suffered by the victim.

However, in the present case, the presumed victim did not suffer any damage since the transaction of November 12, 1997, was advantageous to Mr. C. It is for this reason, moreover, that the plaintiff does not seek to have it annulled. [70] The plaintiff answers that art 290 CCQ does not require proof of damage and that it indeed allows the victim to keep the benefits of a transaction by applying for a simple reduction of the obligations.

In her opinion, art 290 CCQ allows obligations to be reduced on the mere proof that the incapacity was known to the other party, which excludes proof of damage. [71] Doctrine seems to be divided on this issue. In their treatise entitled Le droit des personnes physiques , the authors Deleury and Dubau maintain that art 290 CCQ does not require proof of damage. The authors of Droit des obligations , Lluelles and Moore, disagree.

According to them, the principle should be the validity of the act performed before the curatorship, in spite of proof that the deficiency was notorious or known to the other party, unless the act harms in the slightest the person of full age who makes a contract before the measure. [72] The transaction may have been more advantageous had Mr. C. had adequate protective supervision. Naturally, we have entered the realm of speculation. The evidence did not reveal the existence of any material or moral damage as a result of the absence of legal representation . In addition, even if Mrs.

D. was not curator or tutor to the person or property of Mr. C. and even if she found herself in a conflict of interest position from the moment she became his sole legatee, it must be remembered that she had her spouse’s interests at heart and was trying to benefit from the situation . [73] If Mr. C. has suffered damage, it is as a result of poor administration by Mrs. D., who did not act as a prudent and diligent manager. [Emphasis added.] [Citations omitted.] [ 22 ] Concerning the request for exemplary damages as a result of the alleged infringement of

section 48 of the Charter of human rights and freedoms [4] [the Charter ], which protects aged and handicapped persons against any form of exploitation, the trial judge acknowledged that the provision may receive application but again found that there was no damage. Moreover, the infringement could not be described as unlawful and intentional: [ translation] [79] Was Mr. C. the victim of exploitation within the meaning of s 48 of the Charter ? There can be no doubt that there was significant disproportion between the defendant and his incapable client. Mr.

C. was assuredly in a vulnerable position even if his spouse, Mrs. D., was helping him in his actions. Mrs. D. put herself in a position of conflict of interest by becoming the sole legatee of Mr. C., who thereby became doubly vulnerable. [80] Can one say, however, that the defendant’s position of strength has negative consequences on the interests of Mr. C.? The Court does not find this to be the case. The transaction entered into on November 12, 1997, suited Mrs. D., Mr. C., and the defendant.

It was in the interest of all these persons to transact, that is, to make reciprocal concessions in such a way as to settle the conflict between Mr. C. and Dr. Germain. Naturally, after the fact, one can always say that too many concessions were made, that the lawyer did not see the first lawyer’s calculation error, that he dragged his feet, that he was not up to snuff, and so on. The situation must be analyzed in light of the circumstances that existed in 1995, not by extrapolating, as the plaintiff is doing. We must not lose sight of the fact that the plaintiff is the daughter of Mrs.

D., that she has her mother’s interests at heart, and that she is acting as her mother’s nominee.

[81] The evidence showed that before being appointed tutor to the person and property of Mr. C. in 2002, the plaintiff was never involved with Mr. C. In fact, she barely knew him. It was therefore at her mother’s request that she became involved in the couple’s affairs. As Mrs. D. was in a position of conflict of interest, she was afraid that she could not be appointed tutor. She had also faced some financial adversity, which led to bankruptcy.

In this context, the plaintiff’s appointment was useful. [82] The defendant committed a professional fault by having a discussion with an incapable person, even if he was accompanied by his spouse. It is impossible, however, to maintain that Mr. C. was a victim of exploitation within the meaning of

section 48 of the Charter or that there was an attack on his honour and dignity . As Hilton J.A. remarked in Vallée , supra , [ translation] we must refrain from concluding that there is prima facie exploitation, solely because there is a relationship between a person who is vulnerable and one who is not. [83] Furthermore, in the present case, it is impossible to conclude that there was unlawful and intentional interference within the meaning of s 49 of the Charter .

The evidence in no way shows that the defendant was motivated by a desire to cause anyone any harm. [Emphasis added.] [Citation omitted.] [ 23 ] Finally, the judge dismissed the respondent’s counterclaim because it was [translation] “prescribed and without merit”. [5] * * * [ 24 ] At the hearing, the appellant confirmed that she was no longer seeking annulment of the fee agreement of October 21, 1996, but a reduction of her financial obligations toward the respondent instead. She asks the Court to arbitrate the quantum of the reduction and argues that evidence of damage is not required under

article 290 CCQ. She questions whether the 30% figure agreed on in 1996 is reasonable. She further maintains that the Mr. C.’s situation of exploitation gives rise to moral and exemplary damages. [ 25 ] The appellant points out that Mrs. D. has studied fine arts and defends her administration. The respondent contests this position and maintains his incidental appeal.

He maintains that he could not act before the arbitration decision had been filed and explains his claim. * * * [ 26 ] First, let us consider the incidental appeal . [ 27 ] The respondent claims an amount of $8,208.06 which he did not request from Mr. C. in the November of 1997 settlement agreement. Obviously, this item of the claim is prescribed.

The respondent then alleges that the reprehensible actions of the appellant, whom he criticizes for what amounts to abuse of process in conducting the dispute before the arbitration board, give rise to compensation for extrajudicial fees, trouble and inconvenience, and loss of time and salary. This claim is without merit. [ 28 ] The arbitration board is in a good position to evaluate this claim, but we do not know whether it was submitted to it. In any case, it is clear from reading the award that even if it had been, the board would not have given it much weight, given the charges made against the respondent.

Moreover, there is nothing to suggest in the evidence adduced that the judge committed a reviewable error by dismissing the respondent’s counterclaim. [ 29 ] Now let us turn to the main appeal . [ 30 ] First, certain observations must be made: 1) the trial judge’s determinations of fact concerning Mr.

C.’s state of incapacity, as of 1995, and the knowledge the respondent should have had of it, are not seriously questioned and must be taken as fact; 2) the fee agreement is valid, however, and must produce its effects, subject to the appellant’s claim that the resulting financial obligations must be reduced; 3) finally, there is no palpable and overriding error that would permit us to set aside the essentially factual conclusions of the judge according to which: the [ translation] “evidence did not reveal the existence of any material or moral damage as a result of the absence of legal representation”; the respondent’s position of strength did not have [ translation] “ negative effects on the interests of Mr.

C.” who was not a [ translation] “ victim of exploitation”; the respondent was not motivated by a [ translation] “ desire to cause harm”. [ 31 ] It is useful to reproduce the following provisions of the Civil Code of Québec : 161.

An act performed alone by a minor where the law does not allow him to act alone or through a representative is absolutely null . 162.

An act performed by the tutor without the authorization of the court although the nature of the act requires it may be annulled on the application of the minor, without any requirement to prove that he has suffered damage. 163.

An act performed alone by a minor or his tutor without the authorization of the tutorship council although the nature of the act requires it may not be annulled or the obligations arising from it reduced , on the application of the minor, unless he suffers damage therefrom . 164. A minor may not bring an action in nullity or reduction of his obligations if the damage he suffers is caused by a fortuitous and unforeseen event . A minor may not avoid an extracontractual obligation to redress damage caused to another person by his fault. 283.

An act performed alone by a person of full age under curatorship may be declared null or the obligations resulting from it reduced, without any requirement to prove damage .

284. Acts performed before the curatorship may be annulled or the obligations resulting from them reduced on the mere proof that the incapacity was notorious or known to the other party at the time the acts were performed. 287. The rules pertaining to the exercise of the civil rights of a minor apply, adapted as required , to a person of full age under tutorship. 290.

Acts performed before the tutorship may be annulled or the obligations resulting from them reduced on the mere proof that the incapacity was notorious or known to the other party at the time the acts were performed. [Emphasis added.] [ 32 ] The fee agreement was made five and a half years before the institution of the tutorship of Mr. C. The

interpretation of

article 290 CCQ is at the heart of the dispute, more particularly the scope to be given to the words “on the mere proof”. The legislature was not overly zealous in clarifying matters. With regard to curatorship, the drafting of

article 284 is identical. Tutorship concerns the “partial or temporary” [6] incapacity of a person of full age, while curatorship applies to total and permanent [7] incapacity. [ 33 ] In 1993, the Minister of Justice commented on

article 290 CCQ as follows: [ translation] This provision reproduces

article 335.4 CCLC enacted in 1989 and restates, for a person of full age under tutorship, the rule expressed in

article 284 for a person of full age under curatorship. Acts performed before the tutorship may be annulled , at the request of the protected person of full age, on the mere proof that the incapacity was notorious or known to the other party at the time the acts were performed. The

article allows annulment even in cases where it is impossible to prove that the incapacity was notorious. [8] [Emphasis added.] [ 34 ] The action in nullity is the focus of all the attention. The relative nullity of

an act [9] may therefore be invoked, in which case the contract is deemed never to have existed and its effects are eliminated. [10] Consequently, the parties are restored to their original condition by the restitution of prestations. [11] Even if the protected persons are not subject to the general rules of full restitution, they are nevertheless bound to make restitution of prestations to the extent of the enrichment they derived therefrom. [12] That is clearly not a solution that suited the appellant. [ 35 ] Instituting the reduction of obligations is an [ translation] “innovation” of the 1989 reform. [13] It was supported by the reform of the Civil Code .

Article 1407 states: 1407 . A person whose consent is vitiated has the right to apply for annulment of the contract; in the case of error occasioned by fraud, of fear or of lesion, he may, in addition to annulment, also claim damages or, where he prefers that the contract be maintained, apply for a reduction of his obligation equivalent to the damages he would be justified in claiming . [Emphasis added.] [ 36 ] The Minister of Justice wrote as follows on this subject: [ translation] This

article lists all the remedies available to a person whose consent is vitiated. The first sentence of the

article prescribes the general rule of the former law by stating that an action in nullity of the contract is a recourse in principle, available to the person without free and enlightened consent. The remainder of the

article offers two other recourses for the victim of certain defects attributable to the other party, which are objectively considered more serious. First, it lays down a rule admitted by some case law, by allowing the victim of such defects to claim damages, in addition to an action in nullity of the contract. Then, it introduces a new option, for the victim, of applying for the simple reduction of his or her correlative obligations, instead of the nullity of contract .

This option, based primarily on consumer law and case law developments in incidental fraud, seemed to promote stable contractual relations while providing a solution that is very often more effective and measured than that of an action in nullity and in damages . However,

article 1407 limits the action in reduction of obligations to those defects that are occasioned by fraud, fear or lesion. [14] [Emphasis added.] [ 37 ] With regard to this reform, Jean-Louis Baudouin and Pierre-Gabriel Jobin emphasize the following: [ translation]

Article 1407 of the Civil Code codifies this evolution of case law and applies it to all contracts and also to assumptions where consent is vitiated by fear or lesion. Given the general terms used by Quebec’s legislature in

article 1407, we are of the opinion that the victim of any fraud, whether principal or incident, now has a choice of sanctions: annulment, reduction of obligations, or damages. … The provision states that the reduction of the obligation is equal to the damages that the party would have been justified in claiming, thereby equating an action in reduction to an action in damages, which however, in our opinion, theoretically remain two separate concepts . The reduction of obligations reflects, in fact, part of the damages, namely the contractual loss suffered. However, the damage

may include other elements (additional expenses, inconvenience, expert fees, etc.) triggered by the act of bad faith. Nevertheless, the language used in

article 1407 seems to clearly indicate that from now on, the words “reduction of [his] obligation” must be understood not in the restricted sense of the sole economic or accounting reduction of the principal obligation (for example, the selling price), but in a broader sense of all the damage suffered ; that is the way that judges generally apply this provision. [15] [Emphasis added.] [Citations omitted.] [ 38 ] I share this point of view and I accept that a reduction of obligations is necessarily related to the damage, whether it is the contractual loss suffered [16] or damages in the broader sense of the term. [17] [ 39 ] In this context,

article 1604 of the Civil Code , also new law, cannot be ignored. The third paragraph states what must be understood by the proportional reduction of a correlative obligation: 1604. … All the relevant circumstances are taken into consideration in assessing the proportional reduction of the correlative obligation. If the obligation cannot be reduced, the creditor is entitled to damages only. [Emphasis added.] [ 40 ] I cite Baudouin and Jobin again: [ translation] … Accordingly, we consider the reduction of the creditor’s obligation would verily be raised to the level of a general sanction. This

interpretation promotes contract stability because, in practice, the creditor will opt quite often for a reduction of its obligation (in particular, the price) rather than resorting to resolution. … The third paragraph of

article 1604 confers broad discretion on the judge in determining the reduced price . This is necessary in order to make adequate decisions in a wide range of de facto situations that arise. … However, judicial discretion must be exercised without losing sight of the contract as a whole . Under special circumstances, the creditor could apply for a reduction of his obligation, which would end up creating a new disproportion between the prestations, in its own favour; the court should then grant it not a reduction of its obligation, but damages, despite the difficulty in assessment. [18] [Emphasis added.] [Citations omitted.] [ 41 ]

Article 1406 is also relevant where lesion is claimed in the contractual sense of the term: 1406. Lesion results from the exploitation of one of the parties by the other, which creates a serious disproportion between the prestations of the parties; the fact that there is a serious disproportion creates a presumption of exploitation . In cases involving a minor or a protected person of full age , lesion may also result from an obligation that is considered to be excessive in view of the patrimonial situation of the person, the advantages he gains from the contract and the general circumstances . [Emphasis added.] [ 42 ] The Minister’s commentary is as follows: [ translation] This

article clearly defines the concept of lesion, clearing up any possible remaining ambiguity about the conditions for this defect in consent to exist. The first paragraph introduces the concept of lesion of general application, based on the disproportion between prestations and the idea of exploitation. The second paragraph introduces the concept of lesion of special application to minors and protected persons of full age , namely persons of full age under curatorship, persons of full age under tutorship and persons of full age assisted by advisers.

The increased need of protection characterizing these persons seemed to justify adopting a broader and more flexible concept of lesion in their regard. [19] [Emphasis added.] [ 43 ] Édith Deleury and Dominique Goubeau wrote the following about the subjective aspect of this broader concept: [ translation] …That means that even for contracts with objectively balanced prestations, annulment or the reduction of obligations are still possible. This would be the case of a loan agreement with a reasonable interest rate but for an amount that the protected person does not really need.

This provision merely formalizes former case law concerning lesion whose victims are minors by extending it to incapable persons of full age. [20] [Citations omitted.] [ 44 ] The appellant’s position alleges the unreasonableness of the respondent’s billing [21] and seeks the correlative reduction of the obligations under the fee agreement. In other words, lesion is allegedly present in the fee agreement because as a result, Mr. C. would

have an [translation] “obligation that is considered to be excessive” with respect to his patrimonial situation, the advantages to be gained from the agreement, and the general circumstances. This is precisely the approach applied by the trial judge to find in the end that the respondent’s position of strength did not have [ translation] “negative effects on the interests of Mr. C.” Regarding the claim for damages for trouble and inconvenience, the judge similarly found that there was no moral or material damage. [ 45 ] In response, the appellant changed her approach. According to her, since

article 290 CCQ opens the door to the reduction of obligations on the mere proof of incapacity , nothing more is needed to allow her claims for reduction of the obligations and for damages. A review of the circumstances of the case and of the damage actually suffered, if any, would not be material.

In view of this finding, the judge had no other choice but to accept the first two parts of the claim, even if she arbitrated the monetary amounts that seemed reasonable. [ 46 ] I cannot approve of this position. [ 47 ] It is true that with regard to the acts performed prior to the effective date of the tutorship, demonstration of lesion or serious disproportion is not required upon evidence that the contracting party knew of the incapacity. This knowledge is presumed. [22] Establishing evidence is thus rendered unnecessary. [23] However, presumed lesion does not necessarily presuppose damage or prejudice.

In articles 283 and 294 CCQ , which use the phrase “without any requirement to prove damage”, the term “damage” refers in fact to lesion [24] and not reparation, which admittedly does not simplify matters. [25] [ 48 ] Vincent Karim’s comments concerning

article 283 CCQ, which he reiterated with respect to

article 290, seems to me to correctly identify the weakness in the appellant’s position: [ translation] It should be noted that

article 283 CCQ , which addresses the issue of the nullity of

an act performed alone by a person of full age under curatorship, lacks precision and clarity when applied to the possibility of reducing the obligations resulting from such act. This

article actually implies that the curator of the protected person of full age may decide to maintain the act performed by such person and quite simply apply for a reduction of the obligations resulting therefrom without any requirement to prove any damage whatsoever. It is inconceivable that a curator should succeed in his claim for a reduction of the obligations without having to justify such claim. It would be impossible to grant such a claim without adducing evidence regarding the damage or lesion suffered by the person of full age under curatorship.

Deciding otherwise would be tantamount to obliging the court to render a decision without the merits of the claim being proved , which goes against the general rule in

article 2803 CCQ . It seems to us that evidence justifying the reduction of obligations is required for such a claim to be granted . [26] [Emphasis added.] [ 49 ] And a bit further on: [ translation] … Furthermore,

article 1407 CCQ must not be applied so as to give the victim more than that from which he or she benefitted. In other words, when the applicant chooses the reduction of his obligations as a sanction, such reduction must be equal to the reparation in kind for the damage suffered and not a source of enrichment.

Even though the reduction of obligations is a separate concept from that of damages, it is equivalent to the damages that the victim would have been entitled to claim. [27] [ 50 ] Similarly, Jean Pineau and Serge Gaudet write: [ translation] … It is clear that this last possibility [28] is in addition to the others, while however being a variant of an action for damages, because such a reduction cannot be arbitrary : it can only be “equivalent to the damages that (the victim) would have been justified in claiming.” The new text now therefore attributes to the judge the power to [ translation] “review” the contract, but restricts this power to the assessed amount of the damage suffered by the victim: it is therefore a matter of reparation in kind which translates to reparation by equivalent… [29] [Emphasis added.] [ 51 ] In

summary, articles 284 and 290 do not relieve the claimant from showing the disproportion in the prestations or his damages. The trial judge made judicious use of the latitude conferred on her as a result of the new contractual philosophy adopted by the Civil Code of Québec , which now facilitates changes to the contract whenever it seems advisable. [30] The appellant did not convince her that her claim should be granted in view of all the circumstances. Nor does she convince me that our intervention is required. [ 52 ] It should be added that even within the context of an action in nullity and taking for granted that

article 1706 CCQ applies, the restitution of prestations is not arbitrary. The judge must determine, on the basis of the evidence adduced, the appropriate amount of restitution of the prestations so that the protected person is not enriched as a result. [ 53 ] Lastly, regarding the last ground submitted by the appellant, the trial judge concluded, and rightly so, that there was no exploitation of a handicapped person within the meaning of

section 48 of the Charter , and even less so an intentional violation. I would add that the appellant’s argument about the weak position in which Mrs.

D. also found herself during the period in question, given her Fine Arts training and the information that the respondent continually failed to provide concerning the possibility [ translation] “ of not only relinquishing part of the obligations involved in caring for an incapable person but also the possibility of submitting important questions to a duly designated tutorship council ” [31] leaves me perplexed, to the say the least. [ 54 ] Here is how the respondent describes, in defence, the events which occurred when the decision was made on how to finalize

the settlement in November of 1997: [ translation] A. Yes. Necessarily, at the settlement stage, given the damage that Mr. C. had suffered, there were a number of issues. The issue of instituting protective supervision was discussed . THE COURT: Q. Pardon? A. The institution of protective supervision, the appointment of a curator. The idea was to appoint Mrs. D. as Mr. C.’s curator . To do so, I told… Q. who was this discussed with, exactly? A. With Mr. C. and Mrs. D., as well as Mr. B., who was their advisor, their advisor friend before the settlement.

There were two (2) obstacles to the curatorship at that time. One obstacle I considered serious was that Mr. C. and Mrs. D. had just made a last will and testament in favour of one another and that if I instituted a curatorship, it would have cast doubt on the wishes of Mr. C. And if the wishes of Mr. C., who was about to receive a considerable amount, if doubt was cast on the wishes in his last will and testament, it was dangerous, especially because he was estranged from his son. His son had gotten married without even inviting him to his wedding. And there was also a brother and a sister.

So, it was obvious that if I had convened a family council, I would clearly have had to convene the son, the brother, and the sister to have the impending settlement approved. On the one hand, Mrs. D. would have been appointed curator but on the other hand, the son of Mr. C., his brother, and his sister would have known that the last will and testament of recent date would have been questionable. The other reason was a personal reason of Mr. C. and Mrs. D. Neither one of them wanted the C. family to stick their noses in their business.

And they did everything they could to dissuade me from instituting such supervision . [Emphasis added.] [ 55 ] This evidence was not contradicted. There was no rebuttal evidence. [ 56 ] In the same vein, Mrs. D. stated in her testimony that Mr. C., generally, [ translation] “did not understand”, [32] which implies that he was incapable for all intents and purposes. That did not prevent Mrs. D. from accepting the notarial power of attorney dated October 15, 1997, which made her spouse’s incapacity a mere possibility, and from transcribing a statement by Mr.

C. – to be signed by him and attached to the application to ratify the settlement – confirming his agreement with the settlement, without forgetting the allegation in support of this proceeding according to which Mr. C. [ translation] “is habitually capable of caring for himself and administering his property”, of which she could not be unaware. [ 57 ] The trial judge made the correct finding with regard to this point in the claim: [ translation] [79] Was Mr. C. the victim of exploitation within the meaning of s 48 of the Charter ?

There can be no doubt that there was a significant disproportion between the defendant and his incapable client. Mr. C. was assuredly in a vulnerable position even if his spouse, Mrs. D., was helping him in his actions. Mrs. D. put herself in a conflict of interest position by becoming the sole legatee of Mr. C., who thereby became doubly vulnerable. [80] Did the defendant’s position of strength had negative effects on the interests of Mr. C.? The Court does not find this to be the case. [33] [ 58 ] Consequently, I would dismiss both appeals, with costs in each case. LOUIS ROCHETTE, J.A.