20 March 2020

What recourses do businesses have in a time of limited Court resources?

By: Alexandra Criquet and Gabriel Di Genova

In order to comply with governmental public health decisions, the Superior Court and Court of Quebec have suspended regular activities until further notice. The goal is to limit people entering the various Courthouses throughout the province.  From this week onward, only urgent matters will be treated by the Courts.

Furthermore, all pending delays in which to commence a lawsuit or the deadlines for various steps in an existing lawsuit are suspended. In other words, the parties will not lose their rights in delaying taking a recourse, and all pending matters will automatically be postponed by the Courts, without prejudice to the interests of the parties in a file. All procedural and case management hearings are also suspended.

Not only are Courts limiting hearings for all but most urgent cases, as of Thursday March 19, 2020, the Court registry is no longer issuing new Court file numbers, again, with the exception of urgent matters.

How does this affect your business? What can be done to protect your commercial interests in this time of scarcity of Court resources?

The notion of “Urgency”:  This concept is among the criteria a Court analyses in order to grant certain time-sensitive motions, such as the ones described below. The idea is that the intervention of a judge is required to ensure the safeguard of the interests of a party due to the another party’s behaviour / acts / omissions, on an immediate basis, to restore the balance between the parties’ rights and obligations and avoid irreparable damage.

Provisional Injunctions (Art. 509, Code of Civil Procedure): An injunction is an order by the Superior Court to refrain from or cease doing something, or to perform a specified act. In incremental order of urgency, injunctions can be of a ‘provisional,’ ‘interlocutory’ or ‘permanent’ nature.

For an injunction to succeed it would require that i) a serious issue is being tried, ii) there would be serious prejudice to the applicant (for which a monetary order could not compensate), iii) the balance of inconvenience between the parties must favour the applicant.

An example of a provisional injunction would be to obtain an order to allow access to premises or pause construction that is infringing the rights of neighbors. At this time, only ‘provisional’ injunctions are being addressed by the Superior Court.

Safeguard Orders: A safeguard order is similar to a provisional injunction, but it cannot be heard ex parte (without the presence of the other party). This recourse generally exists to return the parties to a state of equilibrium. It can only provide relief going forward, not retroactively.

A common example of a safeguard order is when a commercial tenant does not pay rent. If the context justifies it, a property owner can apply to the Court for an order compelling the commercial tenant to pay rent in a timely manner until a trial date. The Courts accept hearing safeguard orders at this time.

Seizures Before Judgment (Art. 516, Code of Civil Procedure):  A seizure before judgment places property (movable property or real estate) in the hands of justice while a proceeding is pending. This is an extraordinary recourse and will only be granted by the Court if the property is deemed to be in peril.

The Court requires convincing reasons and evidence of serious risk to grant such an order. The Courts are currently accepting to hear such applications.

 Execution of Judgments rendered: A judgment is only as useful as it is enforceable. As such, if a judgment needs to be executed against a party on an urgent basis, the Court is facilitating such orders. The services of a bailiff are often required for such matters.

 Contesting seizures, seizures before judgment and expulsion orders: The reason seizures before judgment are only granted in extraordinary circumstances is because of the level of intrusion and prejudice to the party being seized. The consequences can be grave to the party addressed by such orders, as entire business operations may be paralysed. The same can be said for expulsion orders. Given the high stakes with such matters, the Courts are accepting the presentation of such contestations at this time.

Commercial Division: The Commercial Division of the Superior Court generally handles shareholder disputes and bankruptcy and insolvency proceedings. While the Commercial Division has not issued an official statement regarding which matters will and will not be heard at this time, we can confidently assume that applications must be along the lines of the above matters and sufficiently urgent to merit the intervention of the Court on a time-sensitive basis.

Quebec Rental Board (Régie du logement): This tribunal exclusively handles disputes between property owners and residential tenants. The tribunal announced this week that as of March 23, 2020, all hearings will be cancelled, with the exception of matters related to public health.

 Should you still commence a new lawsuit? As delays are suspended at this time, including the delay in which to respond to a lawsuit, it may not be the ideal time to launch a new lawsuit. Launching a proceeding bears various costs (Court stamps, bailiff fees, etc.), and as such, not only is such an effort not cost-effective, it may be impossible altogether, given the fact that the Courts will not even issue a file number for most matters. That said, there is no problem collaborating with your legal counsel to prepare a lawsuit at this time, such that you are ready to safeguard your rights once judicial services are operating at normal capacity again, or once the Justice Ministry announces new measures for allowing non-urgent proceedings to move forward.

What to do going forward? Notwithstanding the above information, the situation is changing daily and our lawyers are monitoring all new announcements by the Courts, Quebec Bar and Justice Ministry. For additional information regarding the recourses available during this time, please contact a member of KRB’s litigation team.

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