2022 QCCA 544, 2022 QCCA 544

Unofficial English Translation of the Judgment of the Court Poulin c. Gareau 2022 QCCA 544 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF QUEBEC No.: 200-09-010152-202 , 200-09-010157-201 (200-17-028922-193) DATE: April 22, 2022 CORAM: THE HONOURABLE FRANÇOIS PELLETIER, J.A. DOMINIQUE BÉLANGER, J.A. SUZANNE GAGNÉ, J.A. No.: 200-09-010152-202 VALÉRIE POULIN APPELLANT – Plaintiff v.

DIANE GAREAU , in her capacity as syndic of the Chambre des notaires du Québec RESPONDENT – impleaded party and Professions Tribunal IMPLEADED PARTY – defendant and ROXANNE DAVIAULT, in her capacity as Secretary of the Disciplinary Council of the Chambre des Notaires du Québec IMPLEADED PARTY – impleaded party No.: 200-09-010157-201 DIANE GAREAU, in her capacity as syndic of the Chambre des notaires du Québec APPELLANT – Plaintiff v.

VALÉRIE POULIN RESPONDENT – impleaded party and Professions Tribunal IMPLEADED PARTY – defendant and ROXANNE DAVIAULT, in her capacity as Secretary of the Disciplinary Council of the Chambre des Notaires du Québec IMPLEADED PARTY – impleaded party JUDGMENT [ 1 ] The appellant, Valérie Poulin, appeals from a judgment rendered on December 19, 2019, by the Superior Court, district of Quebec (the Honourable Jacques Blanchard), dismissing her application for judicial review of a decision by the Professions Tribunal [the Tribunal].

In a separate appeal, Diane Gareau, in her capacity as syndic of the Chambre des notaires du Québec, also appeals against that judgment. [1] [ 2 ] Over the course of 2010, notary Valérie Poulin acted as testamentary liquidator for a woman who left instructions to the person holding that office to sell an immovable and give the proceeds to her legatee, the Mira Foundation.

The transaction executing this aspect of the will led to a conviction imposed by the Disciplinary Council of the Chambre des notaires du Québec [the Council] in relation to seven counts. [2] [ 3 ] In 2019, the Tribunal allowed in part the appeal filed by notary Poulin against the Council’s decision and entered an acquittal on counts 2, 3, 4, 5 and 6. However, it confirmed the conviction on counts 1 and 7. [3]

[ 4 ] Notary Poulin and the syndic of the Chambre des notaires du Québec both filed applications for judicial review with the Superior Court, which refused to intervene. [4] Hence the appeals that must now be decided. Notary Poulin seeks an acquittal on counts 1 and 7, while the syndic seeks to have the conviction on count 5 restored. [ 5 ] Essentially, the debates before this Court, like the one before the Council, the Tribunal, and the Superior Court, centred on the contradictory theories of the parties on the applicability to the case at bar of

section 30 of the Code of ethics of notaries [ Code of ethics ] [5] and

section 7 of the Règlement sur la comptabilité en fidéicommis des notaires [the Regulation ]. [6] Background [ 6 ] Here follows the background to this matter, in slightly more detail. [ 7 ] Notary Poulin has been a member in good standing of the Chambre des notaires du Québec since 2000. [ 8 ] In 2010, Mtre Julie Gravel, employed at the time in the office of notary Poulin, received a will naming notary Poulin as liquidator. The will provided that the liquidator was obligated to make an inventory and render account in accordance with the law. She was also charged with the full administration of the property. Notwithstanding

article 1306 of the Civil Code of Québec , the testatrix also exempted her from the obligation to make the property productive or increase the patrimony of the succession. [ 9 ] The testamentary provisions authorized the liquidator, alone and without the need for consent of the legatees or authorization of the court, to perform any necessary or useful acts or even to alienate all the of the property of the succession by onerous title.

The will included the obligation to sell an immovable and give the proceeds to the universal legatee, the Mira Foundation. [ 10 ] Here is how the Tribunal summarized the sequence of events: [ translation ] [9] She [Mtre Poulin] obtained the written opinion of a firm of chartered appraisers (the De Rico report), which concluded that the market value was $225,000 for a sale with legal warranty. [10] On October 10, 2010, she conferred a mandate on real estate broker Yves Gaudry for an asking price of $225,000, without legal warranty. [11] On October 14, Mr.

Gaudry presented a promisor-buyer, Mtre Julie Gravel, his spouse who was also the appellant’s employee. Mtre Gravel had received M.D.’s will and was aware that the appellant had been designated as liquidator. [12] Mtre Gravel’s offer complied with all aspects of the submission in the brokerage mandate. [13] The appellant agreed to sell to her on those conditions.

The notarized contract was concluded on November 9, 2010, before Mtre Sébastien Manny, also employed by the appellant. [14] On February 9, 2011, Mtre Gravel resold the immovable for $343,000 and received 30% of the resulting profit, which she had to share with Mtre Gaudry who by then was her ex-spouse. [15] During a professional inspection, the involvement of three notaries from the same firm in the process of the sale of an immovable attracted attention.

This fact triggered an investigation by the respondent that led to the filing of the complaint against the appellant. [16] The Mira Foundation is the universal legatee of the Succession and was informed of this fact on October 15, 2010, when it was sent the inventory of the property of the Succession. The inventory also referred to the liquidator’s professional fees and those related to the declaration of transmission. [17] The appellant received $8,529.89 in professional fees.

During its investigation, the respondent demanded that this amount be reimbursed to the succession’s account given that, in its opinion, written authorization by the heirs was required under

section 54 of the Code . The appellant refused. [7] The Council’s decision [ 11 ] As a result of the professional inspection referred to in the above-cited excerpt from the Tribunal’s decision, Mtre Chantale Racine, syndic of the Chambre des notaires du Québec, filed a complaint containing seven counts against notary Poulin. They read: [ translation ] 1.

In the city of Québec, on or about November 9, 2010, [the appellant], as liquidator of the Succession of M.D., placed herself in a conflict of interest by selling the immovable belonging to the Succession to her employee, Mtre Julie Gravel, notary, after Mtre Gravel had executed the will of M.D., under number 1390 of her minutes. Thus, [the appellant] has violated the provisions of

section 30 of the Code of ethics of notaries (R.R.Q., c. N-3, r. 2 ). 2. In the city of Québec, on or about November 9, 2010, [the appellant], as liquidator of the Succession of M.D., jeopardized the independence and/or the impartiality and/or the objectivity and/or the integrity required to practise the notarial profession by selling the immovable belonging to the Succession to her employee, Mtre Julie Gravel, notary, after Mtre Gravel had executed the will of M.D., under number 1390 of her minutes. Thus, [the appellant] has violated the provisions of

section 29.1 of the Code of ethics of notaries (R.R.Q., c. N-3, r. 2 ).

3. In the city of Québec, on or about November 9, 2010, [the appellant], as liquidator of the Succession of M.D., failed to safeguard her professional independence at all times by selling the immovable belonging to the Succession to her employee, Mtre Julie Gravel, notary, after Mtre Gravel had executed the will of M.D., under number 1390 of her minutes. Thus, [the appellant] has violated the provisions of

section 29 of the Code of ethics of notaries (R.R.Q., c. N-3, r. 2 ). 4. In the city of Québec, on or about September 9, 2010, the appellant misappropriated and/or used for other purposes $8,529.89 from the Succession’s account. Thus, [the appellant] has violated the provisions of sections 1 , 13 and 56(7) of the Code of ethics of notaries (R.R.Q., c. N-3, r. 2 ). 5. In the city of Québec, on or about November 9, 2010, the appellant, as liquidator of the succession of M.D, deducted $8,529.89 in professional fees and expenses from the Succession’s account. Thus, [the appellant] has violated the provisions of

section 54 of the Code of ethics of notaries (R.R.Q., c. N-3, r. 2 ). 6. In the city of Québec, since on or about August 30, 2010, [the appellant] has failed to record and enter in trust all funds, securities, and other property entrusted to her as liquidator of the succession of M.D. Thus, [the appellant] has violated the provisions of

section 1 and 4 of the Règlement sur la comptabilité en fidéicommis des notaires ((2002) 134 G.O. II, 6144 [R.R.Q., c. N-3, r. 5]). 7. In the city of Québec, since on or about August 30, 2010, [the appellant] has failed to deposit in a trust account opened under her name all funds, securities, and other property entrusted to her as liquidator of the succession of M.D. Thus, [the appellant] has violated the provisions of

section 7 of the Règlement sur la comptabilité en fidéicommis des notaires ((2002) 134 G.O. II, 6144 [R.R.Q., c. N-3, r. 5]). [ 12 ] On March 13, 2014, the Council found her guilty on counts 1, 4, 5, 6 and 7, and ordered a conditional stay on counts 2 and 3, [8] while recognizing that an expert report drafted by the De Rico firm had assessed the market value of the immovable at the price for which notary Poulin actually sold it, namely, $225,000.

The Council added that real estate broker Gaudry was aware of the land’s potential for development, which was information that notary Poulin in all likelihood did not have. [ 13 ] The Council accepted that, before the sale, notary Poulin knew that her employee, Mtre Gravel, who was real estate broker Gaudry’s spouse at the time, wanted to acquire the immovable to build condominiums there.

As of that moment, she placed herself in a conflict of interest, such that, in the Council’s view, rather than consent to the sale, she should have consulted the Mira Foundation and then verified the zoning of the property and its potential for development. [ 14 ] In its decision, the Council took into account the fact that notary Gravel and her spouse at the time resold the immovable a few months later, making over $100,000 in profit. It concluded that there was a conflict of interest, even though notary Poulin did not obtain a personal benefit from this sale.

It argued that by favouring her employee’s interests over those of the Foundation, she tarnished the reputation of the profession as a whole. [ 15 ] Regarding counts 4 and 5, the Council did not deny the right to professional fees or their justification, but found that the notary could not deduct them without the written authorization of her client, understood here to be the Mira Foundation.

Without providing many reasons, it then found her guilty her on counts 6 and 7. [ 16 ] On February 2, 2016, the Council imposed a 21-month suspension on count 1, a 12-month suspension on counts 4 and 5, and 2- month suspension on counts 6 and 7, to be served concurrently. [9] The Professions Tribunal decision [ 17 ] On January 7, 2019, the Tribunal allowed notary Poulin’s appeals in part, both the appeal from the conviction and the appeal from the sentence imposing the penalties.

Its main conclusions are as follows: - It confirmed the existence of an objective conflict of interest arising from the sale of the succession’s immovable to her employee (count 1); - It acquitted the notary on counts 2 and 3, on the ground that she did not obtain a benefit from that sale; - It acquitted her on counts 4 and 5, which concerned the payment of professional fees out of the assets of the succession, finding that notary Poulin was entitled to deduct her professional fees from the account of the succession, which the will permitted her to do; - It acquitted her on count 6, finding that

section 3 of the Regulation does not require that amounts received be deposited in a trust account; - It confirmed the conviction on count 7 because, in depositing the amount in an ordinary account, notary Poulin removed it from the immediate control of the Chambre des notaires du Québec.

The Council considered that the testatrix was entitled to depend on the guarantees associated with the liquidator’s status of notary; - It reduced the suspension period to 6 months on count 1 and refused to intervene on the sentence on count 7 (2 months, concurrent). [ 18 ] The Tribunal’s intervention was based on the existence of errors, both in fact and in principle, vitiating the Council’s decision, particularly the consideration of facts subsequent to the sale, which could not have been known to notary Poulin.

[ 19 ] In this regard, it noted that condominiums could not be constructed on the immovable unless additional land was purchased, such that the assessment of $225,000 obtained by the notary accurately represented the value of the property. The Tribunal added that notary Poulin did not have specific knowledge of the zoning or of the possibility of carrying out an assemblage operation, which here consisted of purchasing adjoining land to enable the construction of condominiums. This potential had in fact not yet materialized at the time of the sentencing hearing before the Council.

Finally, the Tribunal added that the Council had erred in principle in treating notary Poulin as the mastermind of the operation, when in reality the real estate broker Gaudry played that role. Superior Court judgment [ 20 ] The Superior Court recognized that the Professions Tribunal applied the correct standard of review, which is set out in Parizeau c.

Barreau du Québec . [10] That judgement provides that [ translation ] “the appellate tribunal may in principle rectify any error of law in the decision under appeal or any palpable and overriding error in the finding of facts or in the application of the law (if it was correctly identified) to the facts”. [11] The Superior Court added that in the case before it, the Tribunal had properly identified its parameters of intervention. [ 21 ] Next, establishing his own standard of intervention, the judge decided that the standard of reasonableness applied as the issue was not exceptional or of central importance to the legal system as a whole within the meaning of Dunsmuir . [12] [ 22 ] Overall, he was of the view that there was no scope for review.

The arguments on appeal [ 23 ] Notary Poulin and Diane Gareau, syndic of the Chambre des notaires du Québec, are dissatisfied with the Superior Court judgment and concur that the decision rendered by the Tribunal was unreasonable. They also agree that there must be a professional relationship between a notary and a client to warrant the application of

section 30 of the Code of ethics . The agreement between their arguments ends there, however. [ 24 ] For notary Poulin, the Tribunal was seriously mistaken when it asserted that the testatrix was her client when she acted as liquidator, which was the very basis of the conviction on count 1. According to her, a testamentary liquidator does not have a client, such that neither

section 30 nor

section 7 of the Regulation applies. She also states that she was not in an objective conflict of interest and considers the 6-month and 2-month suspension periods imposed unreasonable. She argues that the Superior Court therefore had a duty to intervene. [ 25 ] Conversely, for syndic Gareau, a notary-client relationship existed between the beneficiary of the legacy and notary Poulin when she acted as liquidator.

Moreover, she argues that the Tribunal exercised its jurisdiction unreasonably by ruling that notary Poulin could deduct her professional fees and expenses without prior authorization from the Mira Foundation. In her opinion, the Superior Court should have intervened because the Tribunal erred in law in reversing the conviction on the fifth count. Analysis [ 26 ] There was a time when the Chambre des notaires du Québec encouraged its members to refuse to act as testamentary liquidators. In its opinion, the exercise of such an office appeared to conflict with the role of notaries as public officers.

Times have changed, and the professional order now encourages its members to meet a growing need of citizens. [13] [ 27 ] The Code of ethics sets out rules of conduct, grouped into three separate chapters. [ 28 ] The first imposes duties and obligations towards the public on notaries, including the duty to act with dignity and to refrain from using methods or adopting attitudes likely to detract from the good repute of the profession or the notary’s ability to serve the public interest. The second

chapter deals with duties and obligations towards the client, setting out rules of integrity, availability, diligence, liability, independence, and impartiality. It also deals with honouring professional secrecy, confidentiality, as well as the manner of record-keeping and the determination of fees. The final

chapter deals with duties and obligations towards the profession, and prohibits notaries from being members of the Barreau du Québec because of incompatibility. This

chapter also includes a list of acts derogatory to the profession. [ 29 ] The result of this regulatory scheme is that several questions remain as to the application of the second

chapter of the Code of ethics and its various rules [14] when a notary acts as liquidator of a succession. In such circumstances, does the notary have a client? Is a notary subject to

section 30 of the Code of ethics with respect to conflicts of interest and to

section 7 of the Regulation ? [ 30 ] These questions are at the heart of the appeals that must now be decided. It should be noted that the appeals do not challenge the applicable standards of review. The parties essentially agree to recognize that both the Superior Court and the Professions Tribunal applied the correct standards of intervention and review. [15] [ 31 ] The appeals concern solely the Tribunal’s conclusions with respect to counts 1, 5, and 7. It should be noted that both parties agree that the aspect of the judgment recognizing the testatrix as the notary-liquidator’s client is unreasonable (count 1). Count 1: conflict of interest under

section 30 of the Code of ethics of notaries [ 32 ] At the outset, it is useful to reproduce the provision at issue:

30. A notary shall avoid all situations where he could have a conflict of interest. A notary has a conflict of interest where the interests are such that he may be inclined to give preference to some of them and his judgment or loyalty may be unfavourably affected. The notary shall notify his client and cease to perform his duties as soon as he is aware that he has a conflict of interest, unless the client, after being informed of the nature of the conflict of interest and the facts relating thereto, authorizes the notary in writing to continue. However, a notary who receives an application under

article 312 of the Code of Civil Procedure (chapter C-25.01 ) or who acts pursuant to an application for dissolution of a civil union under

article 521.13 of the Civil Code shall cease to perform his duties as soon as he is aware that he has a conflict of interest. 30. Le notaire doit éviter toute situation où il serait en conflit d’intérêts. Il est en situation de conflit d’intérêts lorsque les intérêts sont tels qu’il peut être porté à préférer certains d’entre eux et que son jugement ou sa loyauté peuvent être défavorablement affectés.

Dès qu’il constate qu’il se trouve dans une situation de conflit d’intérêts, il doit en aviser sans délai son client et cesser d’exercer ses fonctions, à moins que le client consente par écrit, après avoir été informé de la nature du conflit d’intérêts et des faits pertinents qui lui sont rattachés, à ce que le notaire continue d’exercer ses fonctions . Toutefois, le notaire à qui est présentée une demande visée à l’

article 312 du Code de procédure civile (chapitre C-25.01 ) ou qui agit dans le cadre d’une demande de dissolution de l’union civile conformément à l’

article 521.13 du Code civil , doit cesser d’exercer ses fonctions dès qu’il constate qu’il est en situation de conflit d’intérêts. [16] [Emphasis added.]

(1) Does the notary-liquidator have a client within the meaning of the provision? [ 33 ] This question is the central point of disagreement between the protagonists. [ 34 ] Part of the difficulty stems from the fact that there is no ethical standard specific to the role of liquidator of a succession or administrator of the property of others in the Code of ethics or the Regulation .

It also stems from the protean nature of the term [ translation ] “client”. [ 35 ] The Court deems it appropriate to discuss the second aspect of the problem first. [ 36 ] Certainly, there are situations where the accuracy of the term [ translation ] “client” is not controversial, but this is not always the case, as the case at bar strikingly demonstrates. In this case, the Tribunal found that the testatrix was notary’s Poulin client. The syndic instead is of the view that the Mira Foundation possessed this status in its capacity as beneficiary of the legacy.

And last, according to notary Poulin, a liquidator, even if a notary, does not serve any client within the usual meaning of that word. [ 37 ] The meaning of this term ultimately depends on the context of its use. Thus, in business, it often refers to an ordinary buyer, but not always. [ 38 ] Examined more closely, even in the legal community has difficulty when defining its precise meaning by referring to the ordinary meaning accepted by the dictionaries. For example, the

definitions put forward by Larousse and Robert contain subtle differences. Larousse defines a client as a [ translation ] “person who receives from a business, for payment, commercial supplies or services ”. [17] As for the Robert dictionary, it proposes the following meaning: a [ translation ] “person who buys or requests services for payment”. [18] [ 39 ] It is apparent that the definition from the Robert can support the position of notary Poulin, insofar as no living person had purchased or requested her services when she accepted the office of liquidator.

This same definition can also support the position of the Tribunal, which saw the testatrix as the person who requested notary Poulin’s services for payment. [ 40 ] In contrast, the Larousse definition appears to favour the syndic’s theory that the succession, in this case, the Mira Foundation, received the services rendered by notary Poulin for payment, which it ultimately paid. [ 41 ] Are these different positions accurate? [ 42 ] First, here is a brief reminder of the reasoning underpinning the Tribunal’s decision. [ 43 ] After noting that the notion of [ translation ] “client” is not defined in the Professional Code , the Notaries Act or the Code of ethics , the Tribunal found that the word [ translation ] “client” should be defined according to its ordinary meaning, which in this case was the one designating the person to whom the professional renders services.

It therefore adopted the thesis of Jean Lambert and Michel Beauchamp, who appear to ascribe the status of a notary-liquidator’s client to the testator. [19]

[ 44 ] The Tribunal stated: [ translation ] [54] The appellant received her instructions through the will. In it, the testatrix prescribed the form of the inventory of her property and, if applicable, of the liquidator’s resignation and of her rendering of accounts. She stated that the appellant had the full administration of the property of the Succession, authorizing her to sell the immovable without the authorization of the heirs or a court.

Finally, the testatrix authorized her to be remunerated at her hourly rate in force at the time she acted. [55] M.D.’s death triggered the implementation of the administration of the Succession and presented the appellant with the obligation to accept or decline the office of testamentary liquidator. Thus, in accepting the office, the appellant made the testatrix her client, thereby justifying the application of

section 30 of the Code . [20] [ 45 ] The syndic, on the contrary, takes the position that the notary-liquidator must render account to the succession, such that the succession becomes her client as the recipient of this service. [ 46 ] The Court cannot endorse either of these positions. [ 47 ] Like the two parties, the Court considers the position supported by the Tribunal unreasonable. Once deceased, a person cannot become a subject of law. It follows that the Tribunal cannot correctly assert that the deceased testatrix became the liquidator’s client when the liquidator accepted the office conferred by the will.

This observation is consistent with the opinion of Professor Beaulne. [21] [ 48 ] In support of its position that the succession became notary Poulin’s client, the syndic relies on a line of authority and legal commentary asserting that the liquidator must render accounts to the succession of the deceased. [22] [ 49 ] The courts have at times found that the liquidator does not represent the heirs, [23] and have at other times supported a different position. [24] In Bergeron v.

Fortier , this Court also explained that under the provisions of the Civil Code of Québec [ translation ] “the creditors of the succession are the first ranking beneficiaries of the operation”. [25] In short, no clear consensus on who benefits from the administration of the succession has yet emerged. [26] [ 50 ] Thus, the argument advanced by the syndic is hardly more attractive than the one recommended by the Tribunal. [ 51 ] The liquidator must execute his or her mandate according to the wishes of the testator within the framework of the law, and in particular the provisions of the Book Three of the Civil Code of Québec .

Several persons may therefore benefit from the services performed by the liquidator, whether or not the liquidator is a notary.

Sometimes it is the creditors, sometimes it is the legatees, and frequently it is the family members whose burdens are lightened as a result. [ 52 ] In this case, the performance of liquidator Poulin’s tasks led her to make an inventory, pay creditors, pay the legacies by particular title, dispose of the furniture, sell the house, and then remit the sale price to the Mira Foundation. [ 53 ] Ultimately, the meaning of the word [ translation ] “client”, as protean as it is, cannot be automatically expanded to clearly designate either the testator or the beneficiary of the services performed by the liquidator.

The fact that the liquidator must render account to the succession does not transform the recipient of these accounts into a [ translation ] “client”.

It is also difficult to see how a creditor who receives payment of debts owing by the deceased can be characterized as a [ translation ] “client”. [ 54 ] In this context, taking into account the particular facts of the case at bar as presented by the parties, the tasks at issue are not part of the performance of a contract for professional services [ translation ] “ towards a client ”. [ 55 ] Certainly, notary Poulin retains her title of notary when she carries out the liquidation, and therefore, without having to decide the issue, it is not impossible that other ethical obligations that do not involve the notary-client relationship apply to the situation at bar, for example, situations listed in the

chapter concerning the notary’s [ translation ] “Duties and obligations towards the public”. Indeed, the status of notary imposes certain duties and obligations on all members of the profession, even when they are not performing a contract for professional services entered into with a client. We need only consider the duty to refrain from using methods or adopting attitudes likely to detract from the good repute of the profession. 1.

Every notary shall act with dignity and shall refrain from using methods or adopting attitudes likely to detract from the good repute of the profession or from the notary’s ability to serve the public interest. 1. Le notaire doit agir avec dignité et éviter toutes les méthodes et attitudes susceptibles de nuire à la bonne réputation de la profession et à son aptitude à servir l’intérêt public. [27] [ 56 ] The argument that only the provisions of the Civil Code of Québec on the administration of the property of others applies in this case also cannot be accepted.

In fact, her status as notary is precisely why Mtre Poulin was appointed liquidator of the succession and why she has ethical obligations to respect when she holds this office. [ 57 ] That said, the Tribunal did more than state that the testatrix was the liquidator’s client.

It also noted that the conflict of interest stems from the fact that in selling the immovable, the notary placed herself in a situation where she was at risk of having to choose between the interest of the employee-purchaser and that of the beneficiary of the succession: [ translation ] [65] On the basis of these authorities and the wording of

section 30, the Tribunal concludes that, when she accepted Mtre Gravel’s offer to purchase, the appellant was in an objective conflict of interest. She sold to one of her employees, thus placing herself in a

position where she was at risk of having to choose between Mtre Gravel’s interest in paying a given price, and that of the Mira Foundation in receiving the highest possible amount as a result of her administration, in the respect of M.D.’s wishes. [66] The quality and appropriateness of the appellant’s decision as testamentary liquidator are not the elements to consider at this stage.

A notary in such a position must refrain from placing himself or herself in a conflict of interest. [28] [Emphasis added.] [ 58 ] Despite the assertion that the testatrix was the liquidator’s client, the Tribunal found that the liquidator had to take into account the interest of the beneficiary of the succession. This at least apparent paradox illustrates the tenuousness of the Tribunal’s

interpretation. [ 59 ] In the context of

section 30 of the Code of ethics , the Court finds that the Robert dictionary definition best reflects the notion to which that provision refers. A client is a [ translation ] “person who buys or requests services for payment”.

In fact, Mtre Reid’s legal dictionary repeats the notion of a request for services in the definition of the French word “ client ” ([ translation ] “client”): [ translation ] A person who requests the services of another person, who entrusts that person with his or her interests. [29] [ 60 ] The notion of [ translation ] “client” understood in this sense is difficult to reconcile with the tasks notary Poulin performed here in the factual context admitted by the parties. [ 61 ] In this respect, it is important to recall that

section 30 appears in the

chapter dealing with “Duties and obligations towards the client”. Nor can the very wording of this provision be ignored. The wording of its third paragraph highlights the difficulties notary Poulin would have encountered when her services were retained upon her acceptance of the office after the death of her [ translation ] “client”, the testatrix. How, indeed, could she have informed the client as soon as possible?

Furthermore, how could she have immediately ceased to perform her duties as liquidator without failing to perform her duties towards her [ translation ] “client”, if that person was the recipient of her services and the beneficiary of the legacy? [ 62 ] Ultimately, it must be concluded that, in the factual context on which the parties agree, notary Poulin did not have a client within the meaning of

section 30 of the Code of ethics when she sold the immovable belonging to the succession to her employee, Mtre Gravel. Vis-à-vis the latter, she acted in the capacity of seller, and vis-à-vis the Mira Foundation, she acted as administrator of the property of others. [ 63 ] In the Court’s view, notary Poulin’s position is therefore well founded.

(2) Does the rule of ethics stating that the notary must avoid all conflicts of interest apply to the notary-liquidator, even though the latter does not have a client within the ordinary meaning of the term? [ 64 ] The syndic and notary Poulin agree that the application of

section 30 of the Code of ethics must imperatively be subject to the existence of a client-notary relationship. That said, because the notary-liquidator has no client, is he or she subject to the principle underlying the text of

section 30? In other words, is the finding of guilt justified by the application of the general principle alone? [ 65 ] At this time, it should be recalled that, since 2005, the Council has endorsed the position that the Code of ethics applies to a notary who acts as liquidator. [30] [ 66 ] A few comments are therefore warranted. [ 67 ] It is true that the application of

section 30 of the Code of ethics poses little difficulty when it directs the notary to avoid all situations where he or she might have a conflict of interest in the context of a clear client-notary relationship. It is less evident that the principle of impartiality at the very foundation of this provision does not apply when there is no such relationship, as in this case. The reflex to apply the avoidance of conflicts of interest rule so broadly is undoubtedly due to the fundamental nature of the principle of impartiality.

It is an integral part of the image that the practice of the profession of notary has in the eyes of the general public. [ 68 ] In this case, the testatrix did not know Mtre Poulin personally. Mtre Poulin was entrusted with this job at the suggestion of the notary who executed the will, in this case, Mtre Poulin’s employee Mtre Gravel.

In other words, Mtre Poulin was not appointed liquidator for personal reasons, out of friendship, or because of a family relationship connecting her to the testatrix. [ 69 ] It must be deduced from this context that it was likely due to the knowledge and skills that the general public associates with notaries that the testatrix entrusted Mtre Poulin with the task of liquidator. [ 70 ] In the dispute at bar, the problem is more specifically related to the wording of the

section invoked in support of count 1,

section 30 of the Code of ethics .

This provision, like the one supporting counts 5 and 7, clearly refers to the notion of [ translation ] “client”, which has had a decisive influence on the course of the debates and more importantly on the defence put forward by notary Poulin. [31] [ 71 ] Certainly, disciplinary law is sui generis law [ translation ] “that can draw from both civil and criminal law”. [32] In this regard, the Court has stated that [ translation ] “it is an error to seek at all costs ... to introduce [into disciplinary law] the methodology, rationalization, and all the principles of criminal law”. [33] In addition, [ translation ] “in disciplinary law, [ translation ] “fault is analyzed as the violation of the principles of morality and ethics specific to an environment and stemming from usage and tradition””. [34] [ 72 ] Professionals must nonetheless be able to make full answer and defence. [35] Accordingly, the constitutive elements and the

circumstances of the fault must be properly defined in the counts. [36] [ 73 ] In addition, an ethical rule that provides for a penalty in the event of a violation must be drafted in sufficiently clear terms so that those in the profession cannot make any mistake about it. [37] To justify a conviction on count 1, it should have been unequivocal to those in the profession that the wording of

section 30 of the Code of ethics applied to the tasks performed by notary Poulin in her capacity as liquidator. Yet this is not the case. [ 74 ] The confusion is obvious insofar as the Tribunal, the syndic, and notary Poulin, all in good faith, do not give the same meaning to the standard prescribed by

section 30 of the Code of ethics when applied to the facts of this case. The course of the debates establishes to a certain extent that notary Poulin was not able to make full answer and defence to a charge that was based solely on the general principle rather than the precise wording of

section 30 of the Code of ethics . The syndic’s agreement with the submission that the application of this provision depends on the client-notary relationship confirms the correctness of this observation. [ 75 ] In Levkovic , the Supreme Court stated: [1] Impermissibly vague laws mock the rule of law and scorn an ancient and well-established principle of fundamental justice: No one may be convicted or punished for

an act or omission that is not clearly prohibited by a valid law . That principle is now enshrined in the Canadian Charter of Rights and Freedoms . This has been recognized by the Court since its earliest pronouncements on unconstitutional vagueness in the Charter era. [38] [Emphasis added.] [ 76 ] In Ruffo , the Supreme Court also recalled this rule of natural justice while adding the nuances required by the particularities of disciplinary law: 111. In short, more precision cannot be required of ethical rules than their subject matter allows.

This does not in itself violate the principle that a professional whose conduct is in question must be able to know both the specific facts alleged against him or her and the substance of the standard he or she is alleged to have breached. [39] [Emphasis added.] [ 77 ] Moreover, as can be seen from the analysis, the charges brought against notary Poulin by the syndic of the Chambre des notaires du Québec are based on the appearance of a conflict of interest and therefore of partiality, much more than on an actual conflict.

These appearances stem mainly from the involvement of three notaries from the same office in the execution of the wishes of the testatrix, which culminated in a personal profit for one of them, Mtre Gravel. [ 78 ] Although the testamentary provisions gave liquidator Poulin the power to sell the immovable without the authorization of the beneficiary, the appearance of a conflict of interest was sufficient to raise questions from an ethical standpoint.

Being in a conflict of interest when acting as an administrator of the property of another can constitute a civil fault on its own. [ 79 ] With this context in mind, had notary Poulin acted with transparency before proceeding with the sale and presented the situation to the beneficiary and obtained its agreement, few would have been tempted to accuse her of being in a conflict of interest or even of acting in violation of several other provisions of the Code of ethics .

The lack of communication between notary Poulin and the Mira Foundation created an appearance of actual partiality. [ 80 ] Moreover, it is important, to remember that the beneficiary, the Mira Foundation, suffered no injury as a result of the sale concluded by notary Poulin in the execution of her office as liquidator. The terms of the sale were better than what was proposed in the fair market value assessment in that the purchaser did not have a warranty.

Furthermore, notary Poulin obtained no personal benefit from this transaction. [ 81 ] These clarifications being made, and considering the wording of count 1, the Court concludes that the Tribunal’s decision to uphold the conviction based on the wording of

section 30 of the Code of ethics was unreasonable. Accordingly, there are grounds for intervention. Count 7: violation of

section 7 of the Règlement sur la comptabilité en fidéicommis des notaires [ 82 ] The Tribunal upheld the decision of the Council on count 7, which accused notary Poulin of violating

section 7 of the Regulation , as it read at the relevant time:

7. All funds entrusted to a notary by a client must , as soon as possible after receipt, be deposited in a general trust account that has been opened in the notary’s name and may be withdrawn solely by him. The account may nevertheless be held jointly by 2 or more notaries. A notary may give another notary a mandate to deposit funds into or withdraw funds from his trust account. Neither the funds nor the interest accrued belong to the notary. 7.

Tous les fonds confiés par un client à un notaire doivent sans délai après réception être déposés dans un compte général en fidéicommis ouvert à son nom et duquel il est le seul à pouvoir effectuer un retrait. Le compte peut néanmoins être détenu conjointement par plusieurs notaires Un notaire peut donner à tout autre notaire le mandat d’effectuer des dépôts ou des retraits dans son compte en fidéicommis.

Ces fonds n’appartiennent pas au notaire non plus que les intérêts qu’ils produisent. [40] [Emphasis added.] [ 83 ] It should be specified that notary Poulin’s argument changed over the course of the proceedings. Before the disciplinary body, she argued that an inconsequential technical error was made. Before the courts, she argued that the outcome depended on the answer to the preceding question. She is correct. [ 84 ] The Tribunal ruled that the testatrix was the notary-liquidator’s client. Since this finding was wrong, it follows that the conclusion that notary Poulin violated

section 7 of the Regulation , as it read at the time, by failing to deposit the proceeds from the sale of the residence into her general trust account, was also wrong. [ 85 ] Notary Poulin opened a succession account, which the provisions in force at the time permitted her to do. It is difficult to see how a notary performing his or her role of liquidator jointly with a person who is not a notary – an accountant, for example – can comply with this provision.

The notary-liquidator would have the obligation to deposit the amounts in an account to which the co-liquidator would not have access. [ 86 ] Like the Code of ethics , the Regulation does not set out specific rules for notary-liquidators. [ 87 ] The Tribunal stated its opinion that it would be preferable for the Chambre des notaires du Québec to exercise supervision over the succession accounts of notary-liquidators. That may be the case, but it is not for the Court to decide.

Tather, the issue is whether the Regulation required it, which it did not. [ 88 ] The Tribunal therefore should have acquitted on that count. This would entaili setting aside the penalty related to the finding of guilt. The syndic’s appeal regarding count 5 [ 89 ] The syndic Gareau considers that the Superior Court should have intervenedin respect of the acquittal on count 5, which concerned deducting professional fees without her client’s consent, contrary to

section 54 of the Code of ethics .

Section 54, it must be recalled, prohibits a notary from deducting fees from a client’s funds without the client’s written authorization. [ 90 ] The Court concludes that the notary did not have a client in this case, which settles the issue. [ 91 ] Like the Tribunal, the Court notes in passing that the liquidator could deduct her professional fees without the Mira Foundation’s authorization because the proceeds of the sale did not belong to the Mira Foundation before the final partition. This reasoning is intelligible, and the conclusion is well within the range of possible outcomes.

FOR THESE REASONS, THE COURT: No. 200-09-010152-202: [ 92 ] ALLOWS the appeal, with legal costs against the respondent Diane Gareau in her capacity as syndic of the Chambre des notaires du Québec; [ 93 ] QUASHES the Superior Court judgment and proceeds to render the judgment that should have been rendered, GRANTS the applicant Valérie Poulin’s application for judicial review; QUASHES the Professions Tribunal’s decision in part; ENTERS an acquittal on counts 1 and 7, and sets aside the related penalties; THE WHOLE with legal costs both in first instance and on appeal against the impleaded party Diane Gareau, in her capacity as syndic of the Chambre des notaires du Québec;

No. 200-09-010157-201: [ 94 ] DISMISSES the appeal, with legal costs. FRANÇOIS PELLETIER, J.A. DOMINIQUE BÉLANGER, J.A. SUZANNE GAGNÉ, J.A. Mtre Daniel Têtu CAIN, LAMARRE For Valérie Poulin Mtre Jean Lanctôt Mtre Bérengère Laplanche LANCTÔT AVOCATS For Diane Gareau Date of hearing: November 4, 2021