200701261535加拿大最高法院判決-Serge Giguère v. 魁北克公證人公會
Giguère v. Chambre des notaires du Québec,  1 S.C.R. 3, 2004 SCC 1
Serge Giguère, ès qualités Appellant
Chambre des notaires du Québec Respondent
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.
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 IIJCan 20610 (QC C.A.),  R.J.Q. 920; Hinkova v. Ordre des pharmaciens du Québec,  Q.J. No. 1445 (QL); Fortin v. Chrétien, 2001 SCC 45 (CanLII),  2 S.C.R. 500, 2001 SCC 45; R. v. Potvin, 1993 CanLII 113 (S.C.C.),  2 S.C.R. 880; Blencoe v. British Columbia (Human Rights Commission), 2000 SCC 44 (CanLII),  2 S.C.R. 307, 2000 SCC 44; Reference as to the Validity of Section 6 of the Farm Security Act, 1944 of Saskatchewan,  S.C.R. 394; Travelers Insurance Co. of Canada v. Corriveau,  2 S.C.R. 866; Laurentide Motels Ltd. v. Beauport (City), 1989 CanLII 81 (S.C.C.),  1 S.C.R. 705.
By Deschamps J. (dissenting)
Guilde des employés de Super Carnaval (Lévis) v. Tribunal du travail, reflex,  R.J.Q. 1556; Pelletier v. Cour du Québec, 2002 IIJCan 41229 (QC C.A.),  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 IIJCan 10049 (QC C.A.),  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,  C.A. 684; Matane (Ville de) v. Fraternité des policiers et pompiers de la Ville de Matane inc., reflex,  R.J.Q. 315; Ordre des audioprothésistes du Québec v. Chanteur, 1996 IIJCan 6273 (QC C.A.),  R.J.Q. 539; Nova Scotia (Workers’ Compensation Board) v. Martin, 2003 SCC 54 (CanLII),  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.
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).
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.
Baudouin, Jean-Louis, et Patrice Deslauriers. La responsabilité civile, 6e 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,  R.R.A. 876,  Q.J. No. 3900 (QL), affirming a judgment of the Superior Court, reflex,  R.J.Q. 1674,  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.
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, “Me 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.
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 IIJCan 20610 (QC C.A.),  R.J.Q. 920 (C.A.), at paras. 112 and 117-18, per Fish J.A. (dissenting); Hinkova v. Ordre des pharmaciens du Québec,  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 “Me 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 SCC 45 (CanLII),  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.
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