Giguère v. Chambre des notaires du Québec, 2004 SCC 1, [2004] 1 SCR 3

Giguère v. Chambre des notaires du Québec, [2004] 1 S.C.R. 3, 2004 SCC 1

Serge Giguère, ès qualités                                                                               Appellant

v.

Chambre des notaires du Québec                                                                Respondent

and

Comité administratif de la Chambre des notaires du Québec                      Intervener

Indexed as:  Giguère v. Chambre des notaires du Québec

Neutral citation:  2004 SCC 1.

File No.:  28901.

2003:  June 5; 2004:  January 29.

Present:  McLachlin C.J. and Gonthier, Major, Bastarache, Binnie, LeBel and Deschamps JJ.

on appeal from the court of appeal for quebec

Civil liability — Professional liability — Notaries  — Indemnity fund — Elderly client selling property to notary for one dollar — Property later sold by notary for $550,000 — Sale annulled by court — Notary declaring  bankruptcy — Claim against Indemnity Fund of Chambre des notaires — Administrative Committee of Chambre rejecting claim on ground that notary was acting in personal rather than professional capacity — Whether Administrative Committee’s decision patently unreasonable  — Regulation respecting the indemnity fund of the Chambre des notaires du Québec, R.R.Q. 1981, c. N-2, r. 8, s. 2.01 — Code of ethics of notaries, R.R.Q., c. N-2, r. 3, s. 4.02.01.

Civil liability — Professional liability — Notaries — Indemnity fund — Maximum indemnity payable for total claims against same notary established by regulation at $300,000 — Whether ceiling excludes any award of interest or additional indemnity under Civil Code — Civil Code of Québec, S.Q. 1991, c. 64, arts. 1617, 1619.

By private writing, Mrs. H sold her home to her notary for $1 “and other good and valuable consideration”.  The notary, who had been handling H’s affairs for many years, drafted the deed of sale himself.  After the notary tried to sell the property,  both H’s brother and her nephew G, who was now H’s curator under a protection order, filed a complaint with the syndic of the Chambre des notaires du Québec.  The complaints were held to be unfounded.  Meanwhile the notary sold the property for $550,000 and H died.  The Superior Court annulled the sale and ordered the notary to reimburse H’s succession over $1 million.  The notary having declared bankruptcy, the succession claimed reimbursement from the Chambre’s indemnity fund for the value of the house and other misappropriations.  The Chambre’s Indemnity Committee recommended that certain amounts be repaid to the succession, but recommended refusal of the claim in respect of the property on the ground that the notary was not acting in the exercise of his profession when he swindled it from H and therefore his actions did not come within the terms of the regulation governing the indemnity fund.  The recommendations were later adopted by the Administrative Committee on behalf of the Chambre.  The Superior Court dismissed the application for judicial review, concluding that the Administrative Committee’s decision was not patently unreasonable.  The Court of Appeal affirmed that decision.

Held (Deschamps J. dissenting):  The appeal should be allowed.

Per McLachlin C.J. and Gonthier, Major, Bastarache, Binnie and LeBel JJ.:  The Administrative Committee’s decision against indemnifying the succession on the ground that the notary was acting in a personal rather than a professional capacity is patently unreasonable.  The Administrative Committee’s error is predicated on a basic misunderstanding of the professional responsibilities of notaries in Quebec law, the relationship between H and the notary, and the purposes of the indemnity fund.  So gross a legal error cannot be shielded by the privative clause in s. 4.03 of the Regulation respecting the indemnity fund.

For all his false pretences of friendship, the notary was above all H’s legal adviser within the meaning of the law.  The professional, rather than personal, nature of the relationship is not only true as a matter of fact but required as a matter of law.  The notary’s professional duty to advise H impartially was engaged by this transaction.  The requirement of notarial impartiality governs the duty of notaries to advise their clients and the parties to acts they prepare.  The fact that this transaction occurred by private writing does not in any sense render it a personal act.  The duty of an independent legal adviser remains the same in the circumstances.  Any characterization of the transaction must also be considered in the light of the purposes of the indemnity fund.  One of those purposes is to protect clients from misdeeds by notaries that, due to their intentional nature, will not be covered by professional liability insurance.  By characterizing the transaction as personal, the two Committees took the notary’s fraud outside the scope of the fund, thus revoking the very protection the fund is intended to give.  This decision opens a gap between notaries’ ethical obligations, as set out in s. 4.02.01(b) of the Code of ethics of notaries, and the remedy for breach of those obligations, which is supposed to be provided, in the last resort, by the indemnity fund.

Before this Court, the Chambre raised for the first time an argument to the effect that no indemnity was payable to the succession because the property does not come within the terms of the Regulation, since it is not “a sum of money or other security”.  There is no reason to believe that this limited understanding of “other security” actually informed the Committees’ decisions.  In any case, in view of the judgment annulling the sale, the deed of sale is deemed  never to have existed.  Under art. 1422 and 1701 C.C.Q., the concern is not with H’s house but with its value and at least the proceeds the notary earned from selling it to third party purchasers.  There is no disputing that those proceeds are sums of money.  This matter should not be sent back to the Chambre so that it can decide this point.  There is no dispute as to quantum and to send the matter back would serve to reward the Chambre for the tardiness with which it has raised this argument.

The maximum indemnity payable from the fund for the total claims against the same notary is $300,000.  That limit is not a constraint on awards of interest at the legal rate under art. 1617 C.C.Q. and does not oust the Court’s power to award an additional indemnity under art. 1619 C.C.Q.  These articles seek to compensate creditors for not having access to their funds and to encourage debtors to restore such funds promptly.  Here, the succession, having already received $112,535.96 out of these funds, is entitled to the amount of $187,464.04 plus interest at the legal rate and additional indemnity, both payable from May 3, 1996, being the date on which the Administrative Committee rendered its decision.

Per Deschamps J. (dissenting):  The interpretation of s. 2.01 of the  Regulation creating the indemnity fund adopted by the Administrative Committee is not unreasonable.  The approach and conclusion adopted by the majority mean that administrative tribunals are left no margin for interpretation.  Neither the analysis nor the conclusion made is in keeping with the strong privative clause, the expertise of the Committee’s members, the nature of the issue, which is a simple claim for indemnification, or the purpose of the Regulation.

Four cumulative elements must  be established in order to give rise to the protection afforded by s. 2.01 of the Regulation:  (1) there must be sums of money or other securities; (2) they must have been delivered to the notary; (3) they must have been delivered in the practice of his profession; and (4) the notary must have used them for purposes other than those for which they had been delivered to him.  The Administrative Committee’s decision is not founded solely on its opinion that the notary was not acting in the practice of his profession.  Even if the notary was acting in the practice of his profession, the other three conditions still have to be examined before ruling on the entitlement to  indemnification.  In the Committee’s opinion, the claim should have been refused because three of the prerequisites to protection were not met.  It was not necessary for the Committee to rule on the words “sums of money or other securities”.  Administrative tribunals cannot be expected to conduct an exhaustive examination of all possible grounds that could potentially support their decision. Moreover, equating the property with a sum of money imposes an ex post facto analysis of the property delivered.  This interpretation does not square well with the context of the Regulation, which calls for the property to be characterized upon its delivery, rather than after its conversion or disposition.

A regulation explicitly specifying that coverage extends to sums of money or other securities delivered to a notary and used for purposes other than those authorized by the client can be interpreted differently from one that protects against any dishonest transaction.  Since requirements (2) and (4) are difficult to reconcile with extortion or fraud, one could perhaps conclude that such acts are not covered by the Regulation.  It is therefore not unreasonable to conclude that the unlawful act committed by the notary is more properly characterized as fraud, a dishonest transaction or a fraudulent tactic than as a misappropriation of funds, and that only a misappropriation of funds gives rise to indemnification under the fund. 

Even if the Administrative Committee’s decision was unreasonable, the case should be referred back to the Committee so that it could render a decision on the aspects of the case it has not yet ruled on.  None of the exceptions that would allow a court to substitute its opinion for that of the administrative tribunal applies here.  It would be difficult for the Court, without usurping the function of the Committee, to substitute its own judgment for that of the Committee with respect to the meaning of “sums of money or other securities”.  The fact that a considerable amount of time has passed since the Committee rendered its decision is not an exceptional circumstance that would warrant not remitting the case to the Committee.  The delay is inherent to the judicial process.  There is no special reason that would justify having the Court award compensation or determine the outcome of the claim.  Such a conclusion would put the Court outside the boundaries of judicial review.

Cases Cited

By Gonthier J.

Approved:  Ayotte v. Boucher (1883), 9 S.C.R. 460; referred to:  Comité administratif de l’Ordre des comptables agréés du Québec v. Schwarz, [2001] R.J.Q. 920; Hinkova v. Ordre des pharmaciens du Québec, [2000] Q.J. No. 1445 (QL); Fortin v. Chrétien, [2001] 2 S.C.R. 500, 2001 SCC 45; R. v. Potvin, [1993] 2 S.C.R. 880; Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307, 2000 SCC 44; Reference as to the Validity of Section 6 of the Farm Security Act, 1944 of Saskatchewan, [1947] S.C.R. 394; Travelers Insurance Co. of Canada v. Corriveau, [1982] 2 S.C.R. 866; Laurentide Motels Ltd. v. Beauport (City), [1989] 1 S.C.R. 705.

By Deschamps J. (dissenting)

Guilde des employés de Super Carnaval (Lévis) v. Tribunal du travail, [1986] R.J.Q. 1556; Pelletier v. Cour du Québec, [2002] R.J.Q. 2215; Gardner v. Air Canada, J.E. 99-1143; Panneaux Vicply inc. v. Guindon, J.E. 98-109; Commissaire à la déontologie policière v. Bourdon, [2000] R.J.Q. 2239; Comité de déontologie policière v. Millette, J.E. 2000-591; Compagnie des transformateurs Philips Ltée v. Métallurgistes unis d’Amérique, local 7812, [1985] C.A. 684; Matane (Ville de) v. Fraternité des policiers et pompiers de la Ville de Matane inc., [1987] R.J.Q. 315; Ordre des audioprothésistes du Québec v. Chanteur, [1996] R.J.Q. 539; Nova Scotia (Workers’ Compensation Board) v. Martin, [2003] 2 S.C.R. 504, 2003 SCC 54.

Statutes and Regulations Cited

Act respecting the distribution of financial products and services, R.S.Q., c. D-9.2, s. 274.

Civil Code of Québec, S.Q. 1991, c. 64, arts. 1422, 1617, 1619, 1701.

Code of Civil Procedure, R.S.Q., c. C-25, arts. 846, 878.

Code of ethics of notaries, (2002) 134 O.G. II, 4561, ss. 18, 30.

Code of ethics of notaries, R.R.Q. 1981, c. N‑2, r. 3, s. 3.01.05, 3.02.04, 3.03.04, 3.04.01, 4.02.01(b).

Law Society Act, R.S.O. 1990, c. L.8, s. 51(5).

Legal Profession Act, R.S.A. 2000, c. L-8, s. 89(2).

Legal Profession Act, S.B.C. 1998, c. 9, s. 31(4).

Notarial Act, R.S.Q., c. N‑2, ss. 2(1), 4(1), 4(3), 15(b).

Notaries Act, R.S.Q., c. N‑3, ss. 10, 11.

Professional Code, R.S.Q., c. C-26, s. 89.

Real Estate Brokerage Act, R.S.Q., c. C-73.1, s. 155.

Regulation respecting the application of the Real Estate Brokerage Act, (1993) 125 O.G. II, 7041, ss. 28 et seq.

Regulation respecting the eligibility of a claim submitted to the Fonds d’indemnisation des services financiers, (1999) 131 O.G. II, 2091.

Regulation respecting the indemnity fund of the Barreau du Québec, R.R.Q. 1981, c. B‑1, r. 6, s. 1.01.

Regulation respecting the indemnity fund of the Chambre des notaires du Québec, R.R.Q. 1981, c. N-2, r. 8, ss. 2.01, 4.03, 4.04 [am. (1986) 118 O.G. II, 889].

Regulation respecting the indemnity fund of the Corporation professionnelle des administrateurs agréés du Québec, R.R.Q. 1981, c. C-26, r. 12, s. 2.01.

Regulation respecting the indemnity fund of the Corporation professionnelle des comptables généraux licenciés du Québec, R.R.Q. 1981, c. C-26, r. 33, s. 2.01.

Regulation respecting the indemnity fund of the Ordre des comptables agréés du Québec, R.R.Q. 1981, c. C-48, r. 6, s. 2.01.

Regulation respecting trust accounting by bailiffs and the indemnity fund of the Chambre des huissiers de justice du Québec, (1999) 131 O.G. II, 220, s. 21.

Authors Cited

Anonyme.  “Rôle du notaire dans l’acte sous seing privé” (1911), 14 R. du N. 56.

Baudouin, Jean-Louis, et Patrice Deslauriers.  La responsabilité civile, 6^e éd.  Cowansville, Qué.:  Yvon Blais, 2003.

Brown, Donald J. M., and John M. Evans.  Judicial Review of Administrative Action in Canada.  Toronto:  Canvasback, 2003.

Canadian Bar Association.  Special Committee on Legal Ethics.  Code of Professional Conduct.  Toronto:  The Association, 1988.

Marquis, Paul-Yvan.  La responsabilité civile du notaire.  Cowansville, Qué.:  Yvon Blais, 1999.

Roy, Alain.  Déontologie et procédure notariales.  Montréal:  Thémis, 2002.

APPEAL from a judgment of the Quebec Court of Appeal, [2001] R.R.A. 876, [2001] Q.J. No. 3900 (QL), affirming a judgment of the Superior Court, [1997] R.J.Q. 1674, [1997] Q.J. No. 1038 (QL).  Appeal allowed, Deschamps J. dissenting.

Jean-Paul Duquette, Pascale Closson-Duquette and Marie-Noëlle Closson‑Duquette, for the appellant.

Sylvain Généreux and Sophie Lauzon, for the respondent.

No one appearing for the intervener.

English version of the judgment of McLachlin C.J. and Gonthier, Major, Bastarache, Binnie and LeBel JJ. were delivered by

1                                   Gonthier J. — This appeal concerns the decision of the Administrative Committee of the Chambre des notaires du Québec (the “Administrative Committee”) not to indemnify the succession of a woman defrauded by her notary.  For the reasons that follow, I find that that decision is patently unreasonable and should be quashed.  I also order the respondents to make the required indemnity.

I.  Facts

2                                   Mrs. Marie-Rose Hamel Longpré was born in Sainte-Thérèse, Quebec in 1915.  During the Second World War, she and her husband moved to the nearby town of Blainville, where they built a house for themselves.  Her husband died in action in the 1940s, only a few years after the move.  She never remarried and had no children.

3                                   Mrs. Hamel had a close relationship with her two notaries, Mr. Georges‑Étienne Filiatrault and his son Mr. Nolan Filiatrault.  When Mrs. Hamel’s husband died, it was Mr. Filiatrault, the father, who received the declaration of death. He continued to handle the widow’s legal affairs, then passed them on to Mr. Filiatrault, his son.  Mrs. Hamel’s relationship with the two men lasted over 50 years.

4                                   As she aged, Mrs. Hamel began to decline mentally.  She suffered from delusions and paranoia.  Still, she continued to live alone in her house.  Mr. Nolan Filiatrault looked after her affairs.  He cashed her pension cheques and tended to other business.  He described himself and his father, now deceased, as Mrs. Hamel’s only friends.

5                                   But Mr. Filiatrault’s friendship came at a price.  The notary, who has since been disciplined by the Chambre and struck from the roll, took advantage of Mrs. Hamel’s compromised state to defraud her.  He applied to the federal government for back payment of Mrs. Hamel’s old age pension, for which she had not applied for fear of losing her widow’s pension, then kept the back payment of over $17,000 for himself.  He sold land owned by Mrs. Hamel and misused the proceeds.  He even forged her signature to withdraw funds from a trust account in her name.  Emboldened perhaps by the success of these scams, he next turned his attention to Mrs. Hamel’s house.

6                                   By private writing dated October 25, 1989, Mrs. Hamel sold her home to her notary for $1 [translation] “and other good and valuable consideration” (“et autres bonnes et valables considérations”).  Mr. Filiatrault drafted the deed of sale himself.  Mrs. Hamel signed it, in her tremulous hand, on October 25, 1989.  Under Mr. Filiatrault’s signature one reads, “M^e Nolan Filiatrault, notaire”.

7                                   Finally, Mr. Filiatrault instigated a protection proceeding in respect of Mrs. Hamel’s person and property, although at this point there was little left, financially speaking, to protect.  The proceeding was formally brought by Mrs. Hamel’s nephew, Jean-Paul Giguère.  It required an examination of Mrs. Hamel pursuant to art. 878 of the Code of Civil Procedure, R.S.Q., c. C-25.  When asked whom she wanted to take care of her and her affairs, Mrs. Hamel replied, [translation] “Mr. Filiatrault”.  When asked why, she said simply, [translation] “Because I need a lawyer”.

8                                   Mr. Filiatrault began trying to sell Mrs. Hamel’s property almost as soon as he acquired it.  His efforts aroused the suspicion of Mrs. Hamel’s brother, Mr. Josephat Hamel.  Mr. Hamel consulted his notary and wrote a letter of complaint to the syndic of the Chambre des notaires du Québec (the “Chambre”).  So too did Mr. Giguère, who was now Mrs. Hamel’s curator under the protection order.  A representative of the Chambre (which is the respondent in this appeal) replied to Mr. Hamel nearly four months later.  He said that he had spoken to Mr. Filiatrault about the matter and was satisfied Mr. Hamel’s complaint was unfounded.  He noted that Mrs. Hamel herself had made no complaint.  He advised Mr. Hamel that the file was now closed.  In a similar letter to counsel for Mr. Giguère, the Chambre’s representative described the sale as a personal transaction between Mr. Filiatrault and Mrs. Hamel.  Meanwhile Mr. Filiatrault sold the property in three parts for a total sale price of $550,000. Mrs. Hamel relocated to a seniors’ residence.

9                                   Mr. Giguère continued to contest the sale. Finally in late 1995 Marx J. of the Superior Court of Quebec annulled the transaction.  The evidence before him was that Mrs. Hamel had been legally incompetent since the late 1970s and that she placed blind trust in Mr. Filiatrault.  She would sign anything he asked her to, when he did not simply forge her signature himself.  Marx J.’s annulment of the deed of sale came too late for Mrs. Hamel, who died earlier that year.  The court ordered Mr. Filiatrault to reimburse the Hamel succession (the “succession”) over $1 million.

10                               Predictably, Mr. Filiatrault was bankrupt.  He could not reimburse the succession.  Mrs. Hamel’s heirs therefore looked to the Chambre.  Like other professions in Quebec, notaries are under a statutory obligation to establish an indemnity fund:  Professional Code, R.S.Q., c. C-26, s. 89.  The Chambre’s fund was established by the Regulation respecting the indemnity fund of the Chambre des notaires du Québec, R.R.Q. 1981, c. N-2, r. 8 (the “Regulation”).  The succession claimed reimbursement from this fund, both in respect of Mrs. Hamel’s house (a claim of $900,000) and other misappropriations.  Following its ordinary procedure, the Chambre’s Comité du fonds d’indemnisation (the “Indemnity Committee”) studied the claim.  It recommended that certain amounts be repaid to the succession, but recommended refusal of the claim in respect of Mrs. Hamel’s house on the ground that Mr. Filiatrault was not acting in the exercise of his profession when he swindled it from Mrs. Hamel and therefore his actions did not come within the terms of the regulation governing the indemnity fund.  The Indemnity Committee’s recommendations were later adopted by the Administrative Committee on behalf of the Chambre.

11                               Mr. Giguère, acting for the succession, sought judicial review of the Administrative Committee’s decision.  Hurtubise J. of the Superior Court refused the application.  He noted in particular that the privative clause in s. 4.03 of the Regulation shielded the Administrative Committee’s decisions from judicial review.  He concluded that the Administrative Committee’s decision was reviewable on a standard of patent unreasonableness, that the decision was not patently unreasonable, and that it must therefore stand.  The succession’s appeal to the Quebec Court of Appeal was dismissed.  That appeal, and the appeal to this Court, were brought by Serge Giguère, who succeeded to the position of curator upon the death of Jean-Paul Giguère.

II.  Standard of Review

12                               The standard of review was not disputed before us.  The parties agree that, given the privative clause in s. 4.03 of the Regulation, the standard of review is patent unreasonableness.  The question at issue is whether the decision not to indemnify the succession was patently unreasonable.

III.  Analysis

13                               The Indemnity Committee’s decision not to indemnify the succession was based on the Indemnity Committee’s interpretation of s. 2.01 of the Regulation, which interpretation was adopted by the Administrative Committee.  Section 2.01 reads:

The Bureau shall establish an indemnity fund to be used to reimburse the sums of money or other securities used by a notary for purposes other than those for which they had been delivered to him in the practice of his profession.

The two committees agreed that Mrs. Hamel’s home was not delivered to Mr. Filiatrault in the practice of his profession.  They characterized Mr. Filiatrault’s defrauding of Mrs. Hamel as a personal rather than a professional act, and found that only professional acts may be indemnified out of the indemnity fund.  With respect, I am of the view that this decision betrays a misunderstanding of the relationship between Mrs. Hamel and Mr. Filiatrault, the duties of notaries, and the nature of the indemnity fund, and that this Court cannot permit it to stand.  The analysis of the relationship between Mrs. Hamel and Filiatrault is patently unreasonable and leads to a result which is also patently unreasonable.  I would quash the decision and order the Chambre to indemnify the succession.

A.  Notaries and the Indemnity Fund

14                               The law governing notaries at the time the events of this appeal took place was the Notarial Act, R.S.Q., c. N-2. Section 2(1) of that Act described notaries as “legal practitioners and public officers whose chief duty is to draw up and execute deeds and contracts to which the parties are bound or desire to give the character of authenticity attached to acts of the public authority and to assure the date thereof”. Section 15(b) provided that one of the “chief duties of every notary” shall be “to observe in the practice of his profession the rules of the most scrupulous honesty and impartiality”.  The Notarial Act has now been largely repealed and replaced by the Notaries Act, R.S.Q., c. N-3.  Yet the characterization of notaries as both legal advisers and public officers, and the notary’s duty of impartiality, are restated in the new legislation at ss. 10 and 11, respectively.

15                               Complementing the Notarial Act was the Code of ethics of notaries, R.R.Q. 1981, c. N-2, r. 3 (the “Code”).  The Code has since been repealed and replaced, but was in force at the time of the events at issue in this appeal.  The Code affirmed the requirement of notarial impartiality at several points.  Section 3.01.05 required a notary to give to clients or to parties to an act “disinterested, frank and honest” advice. Section 3.04.01 provided:  “A notary must subordinate his personal interest to that of his client.”  Section 3.03.04 provided that a notary may not cease to act for the account of a client unless he has “sound and reasonable grounds”, such as “the fact that the notary is in a situation of conflict of interest”.  These provisions of the Code are restated and, in some cases, expanded upon, in the new Code of ethics of notaries, O.C. 921-2002, (2002) 134 O.G. II, 4561.  For instance, s. 30 of the new Code provides that no notary may be in a situation of conflict of interest, and defines a situation of conflict of interest as “where the interests are such that [the notary] may be inclined to give preference to some of them, or his judgment or loyalty may be unfavourably affected”.

16                               The requirement of impartiality governs the duty of notaries to advise their clients and the parties to acts they prepare.  As Roy explains:  [translation] “[n]otaries maintain their impartiality by informing each party to the act of the scope of the rights and obligations that may result from it”:  A. Roy, Déontologie et procédure notariales (2002), at p. 16.  This duty to advise was found in Code s. 3.02.04, and is now declared in s. 11 of the Notaries Act, but it found its earliest expression in Quebec law in the judgment of this Court in Ayotte v. Boucher (1883), 9 S.C.R. 460.  Mr. Ayotte fraudulently procured the signature by Dr. Boucher’s children of a deed that made them responsible for their dead father’s debts.  The deed was drawn up by a notary who, having prepared it, refused to receive it because he believed that Dr. Boucher’s children would not sign it if they knew its true effect.  Mr. Ayotte therefore sent for another notary.  This second notary passed and executed the deed without giving Dr. Boucher’s children any explanation of its legal effect.  This Court annulled the deed and held that it is the duty of a notary to advise his clients of the legal consequences of their acts.  Both notaries, Fournier J. explained, at p. 476, acted unlawfully,

[translation]  but the more blameworthy of the two is without doubt the one who, knowing perfectly well that the Appellant intended to commit an act of fraud, said and did nothing to stop him.  In executing this deed drawn up in advance, the other notary could claim that he was under the impression that the parties had thoroughly discussed everything before he arrived.  This apparently well documented explanation would clear him of any involvement in the fraud committed by the Appellant, but he nevertheless breached his professional duties by failing to ascertain for himself the nature of the agreements he was to authenticate.  If a notary’s duties were understood and practised in this manner, the profession would be a dangerous institution rather than one that is judge-like and so useful for society in general.

17                               Abuses of notarial power such as this are not, sadly, a thing of the past.  For this reason, the Chambre (like all professional bodies in Quebec) is required by the Professional Code to establish an indemnity fund.  The purpose of this fund, and indeed the purpose of the Professional Code more generally, is the protection of the public:  Comité administratif de l’Ordre des comptables agréés du Québec v. Schwarz, [2001] R.J.Q. 920 (C.A.), at paras. 112 and 117-18, per Fish J.A. (dissenting); Hinkova v. Ordre des pharmaciens du Québec, [2000] Q.J. No. 1445 (QL) (C.A.).  The need for such a fund arises in part from the limits of professional liability insurance. Such insurance may protect professionals and their clients from the consequences of professional mistake, inadvertence and negligence, but generally does not cover intentional acts of misconduct.  In this sense, statutory indemnity funds pick up where private insurance leaves off.  This is not to say that malice or fraud are necessary preconditions of reimbursement from the indemnity fund.  However, where such factors are present, professional liability insurance will generally be of no assistance.  The only recourses left to victims in such cases will be lawsuits against the notary himself (who may be bankrupt or missing) and claims against the indemnity fund.

18                               As I have noted, the notarial indemnity fund was established by the Regulation, s. 2.01 of which reads:

The Bureau shall establish an indemnity fund to be used to reimburse the sums of money or other securities used by a notary for purposes other than those for which they had been delivered to him in the practice of his profession.

This provision is notably similar to s. 4.02.01(b) of the Code, which described as “derogatory to the dignity of the profession” an act of “misappropriating or using for purposes other than those authorized by the client the monies or securities entrusted to the notary in the practice of his profession”.  In my view, these two provisions must be read together.  Section 4.02.01(b) of the Code establishes the ethical norm.  Section 2.01 of the Regulation establishes the fund out of which violations of the ethical norm are remedied.  The two provisions operate in tandem.  See Schwarz, supra, at para. 92.

B.  The Administrative Committee’s Decision

19                               I have noted that the Administrative Committee adopted the decision of the Indemnity Committee not to indemnify the succession in respect of Mrs. Hamel’s home.  This decision was pronounced in two stages.

20                               First, on May 3, 1996, the Administrative Committee made the following declaration:

[translation] THAT the Administrative Committee note the recommendation that there be partial refusal of this claim for $900,000.00 representing the value of the property sold by Marie-Rose Hamel to Nolan Filiatrault, which sale was annulled pursuant to a judgment rendered by the Honourable Herbert Marx J.S.C. on December 4, 1995, since Nolan Filiatrault, whatever the nature of any actions he may have taken, in relation to the property concerned, was not acting in the practice of his profession within the meaning of the Regulation respecting the indemnity fund.

Following this pronouncement, Mr. Giguère applied for judicial review of the Administrative Committee’s decision.

21                               Next, on December 13, 1996, the Administrative Committee made a second declaration, which read in part as follows:

[translation] WHEREAS Nolan Filiatrault was not acting “in the practice of his profession” within the meaning of the Regulation respecting the indemnity fund of the Chambre des notaires du Québec;

                                                                   . . .

WHEREAS the property was not, in any way, “delivered” to Nolan Filiatrault “in the practice of his profession” within the meaning of the Regulation respecting the indemnity fund of the Chambre des notaires du Québec;

WHEREAS the property was not “used” by Nolan Filiatrault “for purposes other than those for which [it] had been delivered to him” within the meaning of the Regulation respecting the indemnity fund of the Chambre des notaires du Québec;

WHEREAS the Indemnity Fund Committee, in its recommendation, and the Administrative Committee took into account that witnesses could have been called to testify to what is alleged in Jean-Paul Giguère’s application for mandamus, evocation and judicial review of November 1, 1996 and, in particular, the allegations made at paragraphs 10, 28, 31 and 42(1) through (5) of that application;

Upon motion duly made and seconded, IT IS HEREBY UNANIMOUSLY RESOLVED:

THAT the Administrative Committee ratify the recommendation of the Indemnity Fund Committee and consequently refuse the claim for the sum of $900,000 representing the value of the property sold by Marie-Rose Hamel to Nolan Filiatrault, that sale having been annulled pursuant to a judgment rendered by the Honourable Herbert Marx J.S.C. on December 4, 1995.

22                               The reference to Mr. Giguère’s judicial review application is illuminating. The passages referred to by the Administrative Committee indicate that Mr. Giguère was prepared to prove to the Indemnity Committee, by way of witness testimony, several matters concerning Mrs. Hamel’s mental competence and Mr. Filiatrault’s professional conduct.  In particular, Mr. Giguère was prepared to prove:  that Mrs. Hamel, in signing the deed of sale, relied on her notary in his role as an impartial legal counsel; that a syndic of the Chambre des notaires had in his possession an authorization from Mrs. Hamel, dating from 1983, which he had failed to disclose and which had convinced him that the Hamel-Filiatrault transaction was outside of the scope of Mr. Filiatrault’s notarial practice; that Mrs. Hamel had been notoriously mentally incompetent since at least 1975; and that Mrs. Hamel had absolute confidence in her notary.  The Administrative Committee’s decision makes clear that it considered the availability of this evidence in arriving at its conclusion.  Yet it nevertheless refused the succession’s claim.

23                               The Administrative Committee’s decision to refuse the succession’s claim turned on its view that Mr. Filiatrault was not in the exercise of his profession when he advised and acted for Mrs. Hamel on the sale of her home.  In the words of the Indemnity Committee (which were substantially repeated by the Administrative Committee in its decision of May 3, 1996), [translation] “whatever the nature of any actions he may have taken in relation to that property, Nolan Filiatrault was acting in his personal capacity and not in the practice of his profession”: minutes of the review meeting of the Indemnity Committee held at the head office of the Chambre des notaires du Québec, April 3-4, 1996; see also minutes of the 57th meeting of the Administrative Committee, May 3, 1996.  The supposedly personal nature of Mr. Filiatrault’s act demands scrutiny.

24                               One must first consider the nature of Mr. Filiatrault’s relationship with Mrs. Hamel.  For all his false pretences of friendship, Mr. Filiatrault was above all her legal adviser, as that term was used in s. 4(3) of the Notarial Act and is now used in s. 10 of the Notaries Act.  She herself clearly viewed him as her legal adviser.  She had long taken Mr. Filiatrault’s advice on legal matters, just as she had taken his father’s advice many years before.  She pointedly described him as [translation] “a lawyer”.  Most importantly, she accepted his legal advice when she signed the deed of sale by which she unwittingly transferred her home to him.  I note that the deed of sale bore Mr. Filiatrault’s official signature in the form required by s. 4(1) of the Notarial Act: the words “M^e Nolan Filiatrault, notaire” appeared beneath the signature line.  I note also that the Administrative Committee itself acknowledged, in its decision of December 13, 1996, that Mr. Giguère was prepared to prove the professional nature of the Hamel‑Filiatrault relationship.

25                               The professional, rather than personal, nature of the relationship is not only true as a matter of fact but required as a matter of law.  I have already noted the statutory and ethical responsibilities of notaries to advise their clients impartially. Mr. Filiatrault’s professional duty impartially to advise Mrs. Hamel was engaged by this transaction.  In Fortin v. Chrétien, [2001] 2 S.C.R. 500, 2001 SCC 45, I had occasion to comment on the other branch of the Quebec legal profession, namely advocates.  I said (at para. 17):  “As persons in whom public trust is invested, advocates play a very special role in the community when they perform . . . acts reserved to them”.  The same is true of the role of notaries in the performance of acts reserved to them.  It should go without saying that this role is a professional not a personal one.  Personal transactions between legal professionals and their clients are not to be encouraged.  If they occur, these transactions must be conducted with great caution by lawyers and notaries in order to avoid conflicts between their obligations arising from the position of trust they hold with their clients and their personal interests.  The principles established by the Canadian Bar Association are instructive:

(a)  The lawyer should not enter into a business transaction with the client or knowingly give to or acquire from the client an ownership, security or other pecuniary interest unless:

(i)    the transaction is a fair and reasonable one and its terms are fully disclosed to the client in writing in a manner that is reasonably understood by the client;

(ii)    the client is given a reasonable opportunity to seek independent legal advice about the transaction, the onus being on the lawyer to prove that the client’s interests were protected by such independent advice; and

(iii)   the client consents in writing to the transaction.

(b)  The lawyer shall not enter into or continue a business transaction with the client if:

(i)    the client expects or might reasonably be assumed to expect that the lawyer is protecting the client’s interests;

(ii)    there is a significant risk that the interests of the lawyer and the client may differ.

(Canadian Bar Association, Code of Professional Conduct, c. VI)

While the CBA’s Code of Professional Conduct is not directly applicable to all notaries in Quebec, the principles enunciated here should nevertheless be borne in mind whenever a notary contemplates a business transaction with his client.

26                               The fact that the transaction in question took the form of private writing must not obscure the issue.  It has sometimes been suggested that a notary who proceeds by private writing, rather than by an authentic act, no longer acts in a professional capacity and is therefore not under the usual duty to give advice.  Thus a note in the September 1911 volume of La Revue du Notariat explained:

[translation]  The case law is consistent in confirming that even if a notary, in the capacity of an adviser, takes part in the drafting of a private writing, this in no way changes the essential character of the writing. The notary is no longer acting in his or her professional capacity, but rather as a mere adviser or agent of the parties; consequently, the act does not take on the character, status or effects of an authentic act.  The fee for a notarial deed is not charged for drawing up the writing, and the notary assumes no responsibility for the form or substance of the writing.  From a legal standpoint, the effects of the document are and remain those of a private writing.

(Anonymous, “Rôle du notaire dans l’acte sous seing privé” (1911), 14 R. du N. 56)  I agree, of course, that the mere fact that a notary has drawn up the private writing does not render it an authentic act for the purposes of the Civil Code.  But I cannot agree with the assertion that a notary may evade all professional responsibility simply by electing one form of writing over another.  Indeed, the duty of an independent legal advisor remains the same in these circumstances regardless of the form of the writing.  This conclusion follows from the principle animating this Court’s decision in Ayotte v. Boucher, supra. It is also consistent with the doctrine, as Professor Marquis has demonstrated:  P.-Y. Marquis, La responsabilité civile du notaire (1999), at pp. 168-69. I consider his conclusion on this point irrefutable:

[translation] We do not believe that, in principle, the notary’s duty to act as legal adviser should be associated exclusively with the particular form an act takes. . . . This informational obligation is an integral part of the profession.  In all likelihood it cannot necessarily be set aside so easily.

We are also of the opinion that even if a notary, of his or her own accord or at a client’s request, prefers to use a private writing instead of an authentic act, the notary is not thereby inevitably and automatically relieved of the duty to advise . . . We must instead take into account the specific circumstances of each case, the importance of the notary’s contribution to the drafting of the act and the degree of trust that the client demonstrably placed in the notary.

In short, the fact that this transaction occurred by private writing does not in any sense render it a personal act rather than an act done by Mr. Filiatrault in the exercise of his profession. In this transaction as in all others, Mr. Filiatrault had a professional duty impartially to advise his client.  To think otherwise is not only mistaken. It is a serious misunderstanding of notaries’ duties as described in the Notarial Act, the doctrine, and the jurisprudence.

27                               Any characterization of the Hamel-Filiatrault transaction as personal rather than professional must also be considered in the light of the purposes of the indemnity fund.  As I have explained, one of those purposes is to protect clients from misdeeds by notaries that, due to their intentional nature, will not be covered by professional liability insurance.  The case at bar is a perfect example: the Indemnity Committee acknowledged the unrefuted evidence of Mr. Filiatrault’s numerous false representations to Mrs. Hamel.  Yet by characterizing the transaction as personal, the two Committees took Mr. Filiatrault’s fraud outside the scope of the fund, thus revoking the very protection the fund is intended to give.  This decision opens a gap between notaries’ ethical obligations, as set out in s. 4.02.01(b) of the Code, and the remedy for breach of those obligations, which is supposed to be provided, in the last resort, by the indemnity fund.  Not only is Mrs. Hamel left unprotected, but the purpose of the fund itself is frustrated.

28                               To conclude, the transaction by which Mrs. Hamel unwittingly sold her home to her notary for the derisory sum of $1 cannot in any sense be reasonably characterized as personal rather than professional.  In accepting the Indemnity Committee’s conclusion that Mr. Filiatrault’s acts were personal rather than professional, and were therefore beyond the scope of the indemnity fund, the Administrative Committee made a fundamental error.  One might object that it is a legal error and is shielded by the privative clause in Regulation s. 4.03.  But it is so gross an error, predicated on such a basic misunderstanding of the professional responsibilities of notaries in Quebec law, the relationship between Mrs. Hamel and Mr. Filiatrault, and the purposes of the indemnity fund that this Court cannot permit it to stand.  It is a patently unreasonable result.

C.  Remedy

29                               Given the patent unreasonableness of the Administrative Committee’s decision, I would quash it.  The only reason the Chambre gave for not indemnifying the succession was its patently unreasonable conclusion that Mr. Filiatrault was acting in a personal capacity when he defrauded Mrs. Hamel.  If that was the only bar to indemnifying the succession, then it is clear the succession must now be indemnified.

30                               In oral argument before this Court, counsel for the Chambre raised a new argument. Instead of seeking to defend the Administrative Committee’s decision solely on its own terms, he raised a further argument to the effect that no indemnity was payable to the succession because Mrs. Hamel’s house does not come within the terms of the Regulation.  It is not, in the words of the Regulation, a sum of money or other security.  Thus, even if the Chambre had not made its patently unreasonable decision, it would still not have been able to indemnify the succession.

31                               There is no reason to believe that this limited understanding of “other security” advanced now by the respondent actually informed the Administrative Committee’s decision (or, for that matter, the Indemnity Committee’s decision).  To the contrary, there is every reason to presume that the decision was taken entirely on the basis of the unreasonable characterization of Mr. Filiatrault’s acts as personal rather than professional, for that is the only reason which the two Committees themselves gave.

32                               In any case, this submission disregards the judgment of December 4, 1995 annulling the contract of sale between Mr. Filiatrault and Mrs. Hamel.  The relevant portions of this order are as follows.

[translation] FOR THESE REASONS, THE COURT

ANNULS the deed of sale . . . insofar as the parties to this case are concerned . . . such that the Plaintiff [Mr. Giguère] ès qualités be substituted for the Defendant as creditor of the proceeds from later sales made in respect of the same property, without prejudice to the rights of third parties, including the purchasers;

ORDERS the Defendant to pay the Plaintiff ès qualités the sum of $900,000, plus interest and additional indemnities provided for under the Civil Code;

. . .

33                               The legal consequences of annulling a contract are set out in the Civil Code of Québec, S.Q. 1991, c. 64.  Article 1422 C.C.Q. provides:  “A contract that is null is deemed never to have existed.” Thus, as between Mrs. Hamel and Mr. Filiatrault, the deed of sale of October 25, 1989 is void and must be treated as having never occurred.  Seen in the light of arts. 1422 and 1701, it is clear that our concern is not with Mrs. Hamel’s house but with its value and at least the proceeds Mr. Filiatrault earned from selling it to third party purchasers.  There is no disputing that those proceeds are sums of money.

34                               It has been argued that this Court, having quashed the Administrative Committee’s decision, should send the matter back for reconsideration of the “other security” point.  Under the circumstances, I cannot agree with this approach.  There is no dispute as to quantum (other than the questions of interest at the legal rate and additional indemnity, which I address below).  This is the first time since these proceedings began in 1995 that the Chambre, either in its Committees or in the courts below, has raised an argument on the meaning of “other security”.  Indeed, the argument and the request that the matter be sent back for reconsideration could not have been raised any later than it was, for it came to us for the first time in oral argument at the hearing.  This Court does not favour issues being raised for the first time in an appeal to this Court: R. v. Potvin, [1993] 2 S.C.R. 880, at p. 916.  Such belatedly raised arguments deprive the Court of the benefit of consideration by the courts below, and may have other undesirable consequences.  Here, to send the matter back to the Chambre on this point would serve to reward it for the tardiness with which it has raised this argument.  And of course it would delay matters even further.  The succession has been seeking indemnity for eight years.  It should not be made to wait any longer. I adopt as my own the words of LeBel J. (dissenting in part) in Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307, 2000 SCC 44, at para. 140:

Unnecessary delay in judicial and administrative proceedings has long been an enemy of a free and fair society.  At some point, it is a foe that has plagued the life of almost all courts and administrative tribunals.  It’s a problem that must be brought under control if we are to maintain an effective system of justice, worthy of the confidence of Canadians.  The tools for this task are not to be found only in the Canadian Charter of Rights and Freedoms , but also in the principles of a flexible and evolving administrative law system.

35                               Given the circumstances of this appeal, I would exercise this Court’s discretion not to send the matter back for reconsideration by the Chambre.

D.  Quantum

36                               It remains to determine the amount of the indemnity. Section 4.04 of the Regulation (as amended by O.C. 645-86, May 14, 1986) provides, “[t]he maximum indemnity payable from the fund is established at 300 000 $ for the total claims against the same notary.”  The succession has already received $112,535.96 out of these funds. This leaves a difference of $187,464.04.  The parties do not dispute that the value of Mrs. Hamel’s property and the proceeds from it exceed that figure.  The succession is therefore entitled to the entire amount.

37                               The succession is also claiming interest at the legal rate as provided for by art. 1617 C.C.Q. plus the additional indemnity as provided for by art. 1619 C.C.Q.  The Chambre contends that the $300,000 ceiling imposed by s. 4.04 of the Regulation excludes any award of interest or additional indemnity under the Civil Code.  It submits that the indemnity funds are intended to reimburse misappropriated funds and not to pay interest on these funds.  The Chambre cites no authority for either of these propositions.

38                               The Chambre’s distinction between reimbursement and the payment of interest is erroneous.  Interest is itself a form of reimbursement.  It reimburses the creditor for the period in which she did not have possession of the funds that were owed to her.  As Rand J. explained in Reference as to the Validity of Section 6 of the Farm Security Act, 1944 of Saskatchewan, [1947] S.C.R. 394, at p. 411, “[i]nterest is, in general terms, the return or consideration or compensation for the use or retention by one person of a sum of money, belonging to, in a colloquial sense, or owed to, another.”

39                               The right to be reimbursed or compensated for the retention of one’s money by another is of great importance.  Without it, a person in possession of another person’s funds would have an incentive not to restore the funds to their rightful owner in a timely fashion.  Instead, it would be in his interest to delay repayment and invest the funds for his own purposes.  When, for whatever reason, he could no longer tarry, he could return the capital to its owner and keep the accrued interest for himself.  This is obviously an unjust and undesirable situation.  The Civil Code attempts to prevent this outcome by means of art. 1617.  Accepting the Chambre’s argument would amount to permitting it to rely on s. 4.04 of the Regulation to engage in just the sort of unjust delay I have described. I do not say that this is what the Chambre has done; I do not doubt its good faith.  My point is simply that to accept the Chambre’s argument would open the way to potential abuse.  I refuse to do so.

40                               As I read s. 4.04 of the Regulation, the $300,000 limit is not a constraint on awards of interest at the legal rate under art. 1617 C.C.Q.  Rather, it is a constraint on the award of indemnity that the Chambre itself may grant for the total claims against the same notary.  That constraint applies not only to the Chambre but also to the remedy this Court is permitted to grant the succession.  Although Mrs. Hamel’s property was worth far more than $300,000, we may not order the Chambre to grant an indemnity greater than that amount.  Section 4.04 does not prevent us, however, from granting the succession an award of interest at the legal rate.

41                               Nor does s. 4.04 of the Regulation oust this Court’s power under art. 1619 C.C.Q. to award an additional indemnity.  Articles 1617 and 1619 both seek to compensate creditors for not having access to their funds and to encourage debtors to restore such funds promptly.  In short, the additional indemnity represents compensation for the damage due to delay:  Travelers Insurance Co. of Canada v. Corriveau, [1982] 2 S.C.R. 866, at p. 875; Laurentide Motels Ltd. v. Beauport (City), [1989] 1 S.C.R. 705, at p. 834.  The need for an additional indemnity arises when the legal rate of interest fails adequately to compensate the creditor because it is lower than the going rates.  As Baudouin and Deslauriers explain,

[translation] [i]n times of inflation, a legal rate of 5% was unrealistic, as it fell well short of the commercial rate or the rate that could be obtained on the open market.  It was therefore not in the interest of a would-be debtor to pay the debt owed to his or her victim.  It would take several years before the debtor would finally be ordered to pay the full amount, plus 5% interest.  In the meantime, that money could instead be invested at a much higher rate, a rate that was often more than twice the legal rate of 5%.

(J.-L. Baudouin and P. Deslauriers, La responsabilité civile (6th ed. 2003), at p. 419)

To deny the availability of additional indemnity on the ground of s. 4.04’s $300,000 limit would give rise to the same potential abuses as I have already described in respect of the legal rate of interest.

42                               I therefore conclude that the succession is entitled to the amount of $187,464.04 out of the indemnity fund plus interest at the legal rate and additional indemnity, both payable from the date of default.  That date is May 3, 1996, being the date on which the Administrative Committee rendered its patently unreasonable decision not to indemnify the succession.  The succession will also have its costs throughout.

English version of the reasons delivered by

43                               Deschamps J. (dissenting) — There is no question that the notary, Mr. Filiatrault, behaved reprehensibly and shamefully abused his victim.  However, our sympathy for the victim should not cause us to forget that the issue before the Court is limited to determining whether, according to a standard of review requiring great judicial deference, the lower courts erred in refusing to intervene and quash the decision of the Comité administratif de la Chambre des notaires (the “Committee”).

44                               With respect for the opinion of my colleagues, I am of the view that it would not be appropriate for the Court to intervene.  In my view, s. 2.01 of the  Regulation respecting the indemnity fund of the Chambre des notaires du Québec, R.R.Q. 1981, c. N-2, r. 8 (the “Regulation”), lends itself to more than one reasonable interpretation, and the interpretation adopted by the tribunal of competent jurisdiction is not unreasonable.

45                               Even if I agreed with the majority that it would be appropriate for the Court to intervene, I would refer the case back to the Committee in order for it to deal with aspects of the claim it has not yet ruled on.  I believe that the majority position oversteps the boundaries of judicial review, which permits judges to examine the legality of a decision but only allows them to rule on the merits in limited cases.

I.  More Than One Possible Interpretation of Section 2.01 of the Regulation

46                               To determine the scope of the protection afforded by the Regulation, it is useful to recall the requirements which give rise to the application of s. 2.01 of the Regulation.  The section reads as follows:

2.01.  The Bureau shall establish an indemnity fund to be used to reimburse the sums of money or other securities used by a notary for purposes other than those for which they had been delivered to him in the practice of his profession.

Four elements must therefore be established in order to give rise to the protection:  (1) there must be sums of money or other securities; (2) they must have been delivered to the notary; (3) they must have been delivered in the practice of his profession; and (4) the notary must have used them for purposes other than those for which they had been delivered to him.

47                               Contrary to the majority’s analysis, I cannot conclude that the Committee’s decision was founded solely on its opinion that the notary was not acting in the practice of his profession.

48                               Although brief, the December 13, 1996 decision of the Committee addresses three of the four elements in s. 2.01.  These three elements are emphasized in the decision:

                                                                   . . .

[translation] WHEREAS Nolan Filiatrault was not acting “in the practice of his profession” within the meaning of the Regulation respecting the indemnity fund of the Chambre des notaires du Québec;

                                                                   . . .

WHEREAS the property was not, in any way, “delivered” to Nolan Filiatrault “in the practice of his profession” within the meaning of the Regulation respecting the indemnity fund of the Chambre des notaires du Québec;

WHEREAS the property was not “used” by Nolan Filiatrault “for purposes other than those for which [it] had been delivered to him” within the meaning of the Regulation respecting the indemnity fund of the Chambre des notaires du Québec;

                                                                   . . .

49                               Thus, even if I were of the opinion that the victim would never have had any dealings with Mr. Filiatrault had he not been her notary and, consequently, that he was acting in the practice of his profession, I could not conclude, because of the deference owed to administrative tribunals in a case such as this, that the Committee’s decision justified the Court’s intervention.  There are other factors at play here.

50                               The Committee concluded that the property had not been delivered to Mr. Filiatrault in the practice of his profession, and that he had not used it for purposes other than those for which it had been delivered.  This conclusion is founded on several cumulative conditions.  Consequently, even if, in the opinion of a court, one of the conditions was met, that does not mean that the victim must be indemnified.  Assuming that the notary acted in the practice of his profession, the other three conditions still have to be examined before ruling on the entitlement to  indemnification.

51                               A notary’s use of property for a purpose other than that contemplated by the client upon delivery presupposes, on the one hand, that the client has voluntarily delivered the property for a specific purpose and, on the other, that the client has given instructions for its custody, management and disposition.  Such delivery and instructions do not fit neatly in a case in which the client’s property has been taken without his or her knowledge, through extortion or fraud, for example.  Since the requirements are difficult to reconcile with these reprehensible acts, one could perhaps conclude that such acts are not covered by the Regulation and that an interpretation excluding them would be neither incorrect nor unreasonable.  These observations apply to two of the requirements under s. 2.01 of the Regulation that the Committee ruled on, but there is more.

52                               The Committee did not consider the meaning of the words “sums of money or other securities”.  The respondent raised a new argument before this Court, submitting that the property cannot be characterised as “sums of money or other securities”.  My colleagues for the majority find that this argument comes too late and is without foundation.  They reason that, since the contract of sale between the notary and the victim was annulled, our concern is not with the property, but rather the proceeds received by the notary when it was sold.  The proceeds would then unquestionably constitute “sums of money” within the meaning of the Regulation (see para. 33 of the majority opinion).  I find this approach inappropriate for a number of reasons.

53                               First, this approach assumes that the argument necessarily had to be raised before the Committee and addressed by it.  I cannot accept this position.  Indeed, in the Committee’s opinion, the claim should have been refused because three of the prerequisites to protection were not met.  We must consider whether the Committee necessarily had to rule on the fourth prerequisite.  Administrative tribunals cannot be expected to conduct an exhaustive examination of all possible grounds that could potentially support their decision in order to protect themselves against the intervention of a court of law.  Such a requirement would considerably increase the scope of a tribunal’s obligation to give reasons for its decisions.

54                               Second, equating the property with a sum of money imposes an ex post facto analysis of the nature of the property delivered.  This interpretation does not square well with the context of the Regulation, which calls for the property to be characterized upon its delivery, rather than after its conversion or disposition.  This meaning results from reading s. 2.01 of the Regulation together with s. 89 of the Professional Code, R.S.Q., c. C-26, which requires professional orders to establish an indemnity fund.  The first paragraph of this section reads as follows:

89.  The Bureau of an order whose members are called upon to hold sums of money or other securities for the account of their clients must, subject to the provisions of the Public Curator Act (chapter C-81) pertaining to unclaimed property, determine by regulation the terms, conditions and standards for receipt, custody and disposition of the sums of money and securities so held, and the terms, conditions and standards relating to the keeping and auditing of trust accounts, books and registers of such members.  The regulation shall establish an indemnity fund to be used to repay the amounts of money or other securities used by a professional for purposes other than those for which they had been delivered to him in the practice of his profession and it shall fix the rules of administration and of investment of the sums of money making up the fund.

Under this section, a professional order must first establish the conditions for the reception, custody and disposition of sums of money or securities held by a professional, and then establish an indemnity fund.  It would therefore appear that the property should be considered at its reception, rather than at the time of sale, as the regulation establishes the conditions for the reception, custody and disposition of property.  I do not claim that this is the only reasonable interpretation, but it could, at the very least, have been the interpretation given by a duly constituted administrative tribunal.

55                               Furthermore, since s. 2.01 of the Regulation has a considerable impact in Quebec, the administrative tribunal of competent jurisdiction must, first of all, consider how to interpret it.  All professional orders in Quebec that are subject to s. 89 of the Professional Code have established identical coverage (see for example the Regulation in question here; the Regulation respecting the indemnity fund of the Barreau du Québec, R.R.Q. 1981, c. B-1, r. 6, s. 1.01; the Regulation respecting the indemnity fund of the Ordre des comptables agréés du Québec, R.R.Q. 1981, c. C-48, r. 6, s. 2.01; the Regulation respecting the indemnity fund of the Corporation professionnelle des administrateurs agréés du Québec, R.R.Q. 1981, c. C-26, r. 12, s. 2.01; the Regulation respecting the indemnity fund of the Corporation professionnelle des comptables généraux licenciés du Québec, R.R.Q. 1981, c. C-26, r. 33, s. 2.01; and the Regulation respecting trust accounting by bailiffs and the indemnity fund of the Chambre des huissiers de justice du Québec, O.C. 153-99, (1999) 131 O.G. II, 220, s. 21).

56                               In other statutes, the legislature has established indemnity plans significantly different in scope from those required of professional orders.  I am referring, for example, to such statutes as the Real Estate Brokerage Act, R.S.Q., c. C‑73.1 (Regulation respecting the application of the Real Estate Brokerage Act, O.C. 1863-93, (1993) 125 O.G. II, 7041, ss. 28 et seq.), and the Act respecting the distribution of financial products and services, R.S.Q., c. D-9.2 (Regulation respecting the eligibility of a claim submitted to the Fonds d’indemnisation des services financiers, O.C. 831‑99, (1999) 131 O.G. II, 2091).  In these statutes, the right to indemnification appears to have a broader scope.  Under s. 155 of the Real Estate Brokerage Act, the government may, by regulation, determine “the conditions of admissibility of claims . . . made to . . . the Fonds d’indemnisation . . . according to whether the claim or compensation pertains to fraud or a fraudulent transaction or to a misappropriation of funds or other property which, under this Act, must be deposited in a trust account” (emphasis added).  Section 274 of the Act respecting the distribution of financial products and services provides that “[t]he object of the fund is to administer the sums of money deposited with it to compensate the victims of fraud, fraudulent tactics or embezzlement for which a firm, an independent representative or an independent partnership, is responsible” (emphasis added).

57                               Upon reading these other Quebec statutes, it becomes apparent that a regulation explicitly specifying that coverage extends to sums of money or other securities delivered to a notary and used for purposes other than those authorized by the client can be interpreted differently from one that protects against any dishonest transaction, whatever form it might take.

58                               In some provinces, the scope of coverage is broader than in Quebec.  Such is the case with lawyers in Alberta and British Columbia.  Section 31(4) of the Legal Profession Act, S.B.C. 1998, c. 9, lists three requirements governing eligibility for compensation:  “(a) money or other property was entrusted to or was otherwise received by a lawyer in the lawyer’s capacity as a barrister and solicitor, (b) the lawyer misappropriated or wrongfully converted the money or other property, and (c) a person sustained a pecuniary loss as a result of that misappropriation or wrongful conversion” (emphasis added).  Section 89(2) of the Legal Profession Act, R.S.A. 2000, c. L-8, provides that “[i]f a member misappropriates or wrongfully converts money or other property entrusted to or received by a member in the member’s capacity as a barrister and solicitor and in the course of the member’s practice as a barrister and solicitor, a person entitled to the money or other property may submit a claim to the Society for compensation from the Assurance Fund” (emphasis added).  In Ontario, the differences from the Quebec plan are even more apparent.  Section 51(5) of the Law Society Act, R.S.O. 1990, c. L.8, reads as follows:  “Convocation in its absolute discretion may make grants from the Compensation Fund in order to relieve or mitigate loss sustained by any person in consequence of dishonesty on the part of any member in connection with such member’s law practice or in connection with any trust of which the member was or is a trustee. . . .” (emphasis added).  The eligibility requirements of these plans are more flexible than those of the funds governed by s. 89 of the Professional Code.  The contrast serves to highlight the distinctively less generous nature of the Quebec plan at issue here.

59                               Moreover, it is far from certain that the meaning of the expression “or other securities” in the English version of s. 2.01 of the Regulation would be sufficiently broad to include immovable property.

60                               Finally, the approach and conclusion adopted by the majority mean that administrative tribunals are left no margin for interpretation.  This is a case in which we are not concerned about the opinion of a specialized decision-maker.  According to the majority, the words “sums of money or other securities” could have only one meaning, only one reasonable or correct interpretation. In other words, this would be another case in which the correctness standard has been confused with standards requiring a greater degree of deference.  As I believe I have shown, the words “sums of money or other securities” could very well designate the property as it was characterized upon delivery.  Neither the analysis nor the conclusion made is in keeping with the strong privative clause, the expertise of the Committee’s members, the nature of the issue, which is a simple claim for indemnification, or the purpose of the Regulation, which has its origins in s. 89 of the Professional Code.

61                               In my analysis, I have been careful to look to this Court’s case law on the standard of review for guidance.  According to the elements of the pragmatic and functional approach to which I alluded earlier, there can be no question that the decision is central to the Committee’s jurisdiction and, consequently, that the Committee has a wide margin for interpretation.  Moreover, the parties agreed that the applicable standard was one of the greatest deference.

62                               In my opinion, it was not unreasonable for the Committee to conclude that the property was not delivered to the notary and that he did not use it for purposes other than those for which it had been delivered to him.  This is not a case in which the Committee’s decision has no rational basis, nor is it a case in which an error is apparent on the face of the record.  In other words, it is not unreasonable to conclude that the unlawful act committed by Mr. Filiatrault is more properly characterized as fraud, a dishonest transaction or a fraudulent tactic than as a misappropriation of funds, and that only a misappropriation of funds gives rise to indemnification under the fund. It is far from obvious that the “escroquerie” (swindle), as the Court of Appeal called it, perpetrated by Mr. Filiatrault would fall within [translation] “the scope of the right to indemnification” under s. 89 of the Professional Code and s. 2.01 of the Regulation.

II.  Role of the Court in Judicial Review

63                               As I have already mentioned, even if I had concluded that the decision was unreasonable, I would still have referred the case back to the Committee so that it could render a decision on the aspects of the case it had not yet ruled on.

64                               I have difficulty conceiving how the Court could, without usurping the function of the Committee, substitute its own judgment for that of the Committee with respect to the meaning of “sums of money or other securities”.  There is no question that the Superior Court has very limited powers to review decisions that are central to the jurisdiction of an administrative tribunal.  The appellant entitled his application [translation] “application for mandamus, issuance of an order for evocation and judicial review”.  This is plainly not a case of mandamus.  Evocation and judicial review are an exercise of the Superior Court’s supervisory power over administrative tribunals.  This power is based on art. 846 of the Code of Civil Procedure, R.S.Q., c. C-25.  LeBel J.A. (as he then was) defined the scope and limits of judicial review in Guilde des employés de Super Carnaval (Lévis) v. Tribunal du travail, [1986] R.J.Q. 1556 (C.A.), at p. 1558:

[translation] As fundamental and broad as this jurisdiction [the superintending and reforming power of the Superior Court] may be, it  nevertheless remains  limited to reviewing the activities of lower tribunals and administrative bodies to ensure their regularity and legality and to uphold fundamental justice.  A higher court will intervene to the extent required, but no more.  The court may not assume the functions of lower tribunals.  Evocation is an appeal to the general jurisdiction of the Superior Court to correct an irregularity or injustice.  It is not a substitution of the Superior Court for the body or tribunal subject to judicial review.  To conceive of judicial review as an instrument for substituting the Superior Court for lower tribunals would violate the limits of the Court’s role and impinge upon the jurisdictional autonomy of entities subject to judicial review, as confirmed in recent case law of the Supreme Court of Canada. [Emphasis added.]

See also Pelletier v. Cour du Québec, [2002] R.J.Q. 2215 (C.A.); Gardner v. Air Canada, J.E. 99-1143 (C.A.); Panneaux Vicply inc. v. Guindon, J.E. 98-109 (C.A.).

65                               Consequently, once it has been determined that an administrative tribunal has exceeded its jurisdiction by rendering an unreasonable decision on a matter within its jurisdiction, the case must, in theory, be sent back to it: Guilde, supra; Guindon, supra; Commissaire à la déontologie policière v. Bourdon, [2000] R.J.Q. 2239 (C.A.); Comité de déontologie policière v. Millette, J.E. 2000-591 (C.A.); Compagnie des transformateurs Philips Ltée v. Métallurgistes unis d’Amérique, local 7812, [1985] C.A. 684.

66                               A court of law may not substitute its decision for that of an administrative decision-maker lightly or arbitrarily. It must have serious grounds for doing so.  A court of law may render a decision on the merits if returning the case to the administrative tribunal would be pointless:  Guindon, supra; Guilde, supra. Such is also the case when, once an illegality has been corrected, the administrative decision‑maker’s jurisdiction has no foundation in law: Guilde, supra.  The courts may also intervene in cases where, in light of the circumstances and the evidence in the record, only one interpretation or solution is possible, that is, where any other interpretation or solution would be unreasonable:  Matane (Ville de) v. Fraternité des policiers et pompiers de la Ville de Matane inc., [1987] R.J.Q. 315 (C.A.).  It is also accepted that a case may not be sent back to the competent authority if it is no longer fit to act, such as in cases where there is a reasonable apprehension of bias:  Guindon, supra; Ordre des audioprothésistes du Québec v. Chanteur, [1996] R.J.Q. 539 (C.A.); Transformateurs Philips, supra; Guilde, supra.

67                               This rule is not enshrined in any statute.  Nevertheless, throughout Canada, judicial review is founded on reviewing courts’ deference to the expertise and discretion of administrative tribunals.  In Judicial Review of Administrative Action in Canada (2003), authors D. J. M. Brown and J. M. Evans make the following comments on the role of a reviewing court (at para. 5:2210):

Where the error is jurisdictional and is of such a nature that it cannot be corrected, an order remitting the matter to the tribunal would obviously not be appropriate.  Where the error is made within jurisdiction, however, or where it involves a breach of procedural fairness, and notwithstanding that once a decision is quashed it is open to the decision‑maker to proceed anew, the appropriate remedy may be to order that the matter be remitted for redetermination. . . .  Moreover, even where a court has the express power to substitute its decision for that of an agency, as in the case of an appeal from an administrative decision, the court’s lack of expertise may warrant an order remitting the matter to the agency for redetermination.

This Court generally follows this rule (Nova Scotia (Workers’ Compensation Board) v. Martin, [2003] 2 S.C.R. 504, 2003 SCC 54).  I see no reason to depart from it here.

68                               None of the exceptions that would allow a court to substitute its opinion for that of the administrative tribunal applies here.  On the contrary, everything weighs in favour of remitting the case to the Committee, since the Committee has not ruled on an issue, has the legal authority and necessary expertise to make a decision, and was not obliged to rule on this issue when it considered the case, as it had already given three reasons for refusing the claim.  Finally, the fact that a considerable amount of time has passed since the Committee rendered its decision is not in my view an exceptional circumstance that would warrant not remitting the case to the Committee. The delay is inherent to the judicial process. If this delay were considered exceptional, all appeals to the Supreme Court, and perhaps all appeals to the Court of Appeal as well, would place the parties in exceptional circumstances.

69                               There is another ground for remitting the present case.  There is no special reason that would justify having the Court award compensation or determine the outcome of the claim.  Such a conclusion would put us outside the boundaries of judicial review.  The Court is not asked to consider the claim itself; the Court’s function is limited to reviewing the legality of the Committee’s decision.  The task of examining the case in its entirety and reaching a decision is left to the administrative decision-maker.

III.  Conclusion

70                               To sum up, sympathy for the victim cannot in my view result in a casting aside of the rules of administrative law.  When a tribunal acts within the limits of its jurisdiction, the reviewing court must show deference and accept that a regulatory provision may have more than one interpretation.  In the present case, the Committee could have provided more detailed reasons, but that cannot be used as a pretext for having this Court substitute its judgment for that of the Committee.  The importance of the provision to be interpreted militates in favour of remitting the case to the tribunal.  It is not the place of this Court to dictate to legislatures the extent of the protection clients of professionals should enjoy.

ANNEX

Relevant Legislation

Professional Code, R.S.Q., c. C-26

89. The Bureau of an order whose members are called upon to hold sums of money or other securities for the account of their clients must, subject to the provisions of the Public Curator Act (chapter C‑81) pertaining to unclaimed property, determine by regulation the terms, conditions and standards for receipt, custody and disposition of the sums of money and securities so held, and the terms, conditions and standards relating to the keeping and auditing of trust accounts, books and registers of such members.  The regulation shall establish an indemnity fund to be used to repay the amounts of money or other securities used by a professional for purposes other than those for which they had been delivered to him in the practice of his profession and it shall fix the rules of administration and of investment of the sums of money making up the fund. 

Regulation respecting the indemnity fund of the Chambre des notaires du Québec, R.R.Q. 1981, c. N‑2, r. 8

2.01.  The Bureau shall establish an indemnity fund to be used to reimburse the sums of money or other securities used by a notary for purposes other than those for which they had been delivered to him in the practice of his profession.

4.03.  The Administrative Committee, upon the recommendation of the committee, shall decide whether it is expedient to allow a claim in whole or in part and, where necessary, shall fix the indemnity.  Its decision is final.

4.04.  The maximum indemnity payable from the fund is established at 300 000 $ for the total claims against the same notary. . . .

Notarial Act, R.S.Q., c. N-2

2. (1)  Notaries are legal practitioners and public officers whose chief duty is to draw up and execute deeds and contracts to which the parties are bound or desire to give the character of authenticity attached to acts of the public authority and to assure the date thereof.

4. (1)  Every notary shall be called “notary” and his official signature shall include the word “notary” following his usual signature. . . .

15.  The chief duties of every notary, in addition to those required of him by this Act, shall be:

. . .

(b) to observe in the practice of his profession the rules of the most scrupulous honesty and impartiality;

Code of ethics of notaries, R.R.Q. 1981, c. N‑2, r. 3

3.01.05.  A notary must give disinterested, frank and honest advice to his clients or parties.

3.03.04.  Unless he has sound and reasonable grounds therefor, a notary may not cease to act for the account of a client. The following shall, in particular, constitute sound and reasonable grounds:

(a) loss of the client’s confidence;

(b) the fact that the notary is in a situation of conflict of interest or in a situation such that his professional independence could be called in question;

(c) inducement by the client to perform illegal, unfair and fraudulent acts.

3.04.01.  A notary must subordinate his personal interest to that of his client.

4.02.01.  In addition to those referred to in sections 57 and 58 of the Professional Code, the following acts are derogatory to the dignity of the profession:

. . .

(b)  misappropriating or using for purposes other than those authorized by the client the monies or securities entrusted to the notary in the practice of his profession;

Notaries Act, R.S.Q., c. N-3

10.  A notary is a public officer and takes part in the administration of justice. A notary is also a legal adviser.

The mission of a notary, in his or her capacity as a public officer, is to execute acts which the parties wish or are required to endow with the authenticity attaching to acts of public authority, to provide such acts with a fixed date, and to keep all acts executed en minute in his or her notarial records and issue copies of or extracts from them.

11.  In his or her role as a public officer, a notary is duty‑bound to act impartially and to advise all parties to an act which the parties wish or are required to endow with authenticity.

Code of ethics of notaries, (2002) 134 O.G. II, 4561

18.  No notary shall use for his own purposes the monies, securities, or other property entrusted to him in the practice of his profession. In particular, he shall not use them as a personal loan or security, or invest them to his own advantage, whether in his name, through an intermediary, or on behalf of a legal person in which he owns an interest.

30.  No notary may be in a situation of conflict of interest.

A notary is in a situation of conflict of interest where the interests are such that he may be inclined to give preference to some of them, or his judgment or loyalty may be unfavourably affected.

As soon as the notary finds himself in a conflict of interest, he shall cease to perform his duties.

Civil Code of Québec, S.Q. 1991, c. 64

1422.  A contract that is null is deemed never to have existed.

In such a case, each party is bound to restore to the other the prestations he has received.

1617.  Damages which result from delay in the performance of an obligation to pay a sum of money consist of interest at the agreed rate or, in the absence of any agreement, at the legal rate.

The creditor is entitled to the damages from the date of default without having to prove that he has sustained any injury.

A creditor may stipulate, however, that he will be entitled to additional damages, provided he justifies them.

1619.  An indemnity may be added to the amount of damages awarded for any reason, which is fixed by applying to the amount of the damages, from either of the dates used in computing the interest on them, a percentage equal to the excess of the rate of interest fixed for claims of the State under section 28 of the Act respecting the Ministère du Revenu over the rate of interest agreed by the parties or, in the absence of agreement, over the legal rate.

1701.  In the case of total loss or alienation of property subject to restitution, the person liable to make the restitution is bound to return the value of the property, considered when it was received, or at the time of its loss or alienation, or at the time of its restitution, whichever value is the lowest, or, if the person is in bad faith or if the restitution is due to his fault, whichever value is the highest.

If the property has perished by superior force, however, the debtor is exempt from making restitution, but he shall then assign to the creditor, as the case may be, the indemnity he has received for the loss of the property or, if he has not already received it, the right to the indemnity. If the debtor is in bad faith or if the restitution is due to his fault, he is not exempt from making restitution unless the property would also have perished if it had been in the hands of the creditor.

Appeal allowed with costs, Deschamps J. dissenting.

Solicitors for the appellant:  Duquette & Closson-Duquette, Sainte-Thérèse, Quebec.

Solicitors for the respondent and the intervener:  Joli-Cœur, Lacasse, Geoffrion, Jetté, Saint-Pierre, Montréal.