Québec – award homologated against arbitral party and non-party held solidarily liable for award amount – #284

In GGL Avocat v. Dumont, 2020 QCCQ 597, Mr. Justice Daniel Lévesque homologated (recognized and enforced) an arbitral award against a party to the arbitration and ordered a third party to be solidarily liable for payment of the award amount.  Lévesque J. acknowledged that the legal matrix was “particular” but was prompted to issue the tandem orders because (i) the amount fell within the jurisdiction of small claims court which favours access to justice and debt recovery and (ii) the invoice underlying the award issued against both the arbitral party and the non-party.

The decision involved two (2) brothers and former clients of Plaintiff, a law firm.  One of the brothers/clients, R, disputed payment of an invoice which Plaintiff issued against R and M.  R alone had initiated and participated in an arbitration of the invoice against Plaintiff.  A May 24, 2018 award (“Award”) issued in Plaintiff’s favour.   M was not a party to the arbitration.  The arbitration R had initiated followed the process set out in the Regulation respecting the conciliation and arbitration procedure for the accounts of advocates, CQLR c B-1, r 17 (“Regulation”).  That Regulation issued under the Act respecting the Barreau du Québec, CQLR c B-1 which, itself, issued pursuant to the Professional Code, CQLR c C-26

Following receipt of the Award, Plaintiff initiated a claim in Court of Québec, small claims division, against both R and M to recover the amount owing for its legal services.  Plaintiff applied to homologate the Award against R and also for an order that M also be ordered to pay that amount. 

Lévesque J. noted that the facts before him were “particular”.  He observed that the Award disclosed that in the arbitration R had acted on both his own and M’s behalf and had argued defenses of each.

Lévesque J. observed that, had it not been for the arbitration instituted by R, Plaintiff’s claim could have been presented in Court of Québec.  He excerpted statements from a prior Court of Québec decision which remarked on how the small claims division of the Court of Québec serves to promote access to justice and includes special modalities for debt recovery.  (Lévesque J.’s reasons contain no reference to the specific case other than the excerpt at para. 9 but that excerpt appears to be culled from 9116-5803 Québec inc. v. Granby (Ville de), 2016 QCCQ 10628, paras 21 and 23-24.)

At the concluding lines of his brief reasons, Lévesque J. observed that (i) only R was party to the Award but (ii) the account for legal services was supported by a detailed statement. The latter comment appeared to imply that those details addressed any concern that M was not party to the arbitration or responsible for payment of the services as recipient.

Lévesque J. held that he would do two (2) things in the same decision: (a) grant homologation of the Award against R and (b) order solidary liability against M for the sum claimed in the Award.

urbitral note – First, for a similar factual matrix, see BMLEX Avocats inc. v. Sahabdool, 2019 QCCQ 3552 and the related Arbitration Matters note “Award enforced against arbitral party and non-party held solidarily liable for award amount” and articles 1523-1544 of the Civil Code of Québec, CQLR c CCQ-1991”.  Unlike that decision, Lévesque J. did specify, when homologating the Award, that homologation be limited to the arbitral party and relied on the vocation of the small claims court as a reason to issue the orders. 

Second, the term “solidary” is identified and defined in the Civil Code of Québec, CQLR c CCQ-1991 at articles 1523-1544 as well as applied throughout the C.C.Q. to stipulate liability in certain legal relationships and situations.  Articles 1523 and 1524 C.C.Q. were not cited in the reasons but their contents are well-known in Québec civil litigation.

 “Article 1523 C.C.Q. An obligation is solidary between the debtors where they are obligated to the creditor for the same thing in such a way that each of them may be compelled separately to perform the whole obligation and where performance by a single debtor releases the others towards the creditor.

Article 1524 C.C.Q. An obligation may be solidary even though one of the co-debtors is obliged differently from the others to perform the same thing, such as where one is conditionally bound while the obligation of the other is not conditional, or where one is allowed a term which is not granted to the other.

Article 1525 C.C.Q. was also omitted from the reasons but covers a particular situation in which solidary liability is imposed when the contractual obligation is for a service.  That provision relates to the solidary liability of R and M, independent of the issue of whether an arbitral award can be enforced against someone who was not party to the arbitration.

Article 1525 C.C.Q. Solidarity between debtors is not presumed; it exists only where it is expressly stipulated by the parties or provided for by law.

Solidarity between debtors is presumed, however, where an obligation is contracted for the service or operation of an enterprise.

The carrying on by one or more persons of an organized economic activity, whether or not it is commercial in nature, consisting of producing, administering or alienating property, or providing a service, constitutes the operation of an enterprise.

Third, see the earlier Arbitration Matters note, “Arbitration imposed by statute remains consensual if opportunity available to renounce”, which in which the court in Boisvert v. Selvaggi, 2019 QCCS 1673 dismissed an attempt at judicial review of an award issuing from arbitration imposed by statute.  Relying on the reasoning and result in Conseil d’arbitrage des comptes des avocats du Barreau du Québec v. Marquis, 2011 QCCA 133, the court held that such arbitrations remain consensual if the legislation allows opportunity to renounce to its application.  Being consensual, such arbitrations were subject not to judicial review but to annulment proceedings based on limited grounds familiar to practitioners practising international commercial arbitration.