The Court of Appeal recently ruled on the international jurisdiction of Quebec courts to hear a dispute in light of article 3148, para. 3 of the Civil Code of Quebec (“C.C.Q.”), in the context of a dispute over the interpretation of a contract providing for the exercise of a party’s recapture rights over reinsured insurance portfolios.
When a business is sold, it is customary for the seller to include, in the share purchase agreement, certain representations and warranties to the buyer regarding the financial position of the company being acquired. These warranties allow the buyer to assume, among other things, that business activity has been in the normal course since the date of the company’s last financial statements. However, as the Superior Court of Québec pointed out in Tubes et Jujubes centre d’amusement familial inc. v. Nemry (the “T&J Case”), the presence of these representations and warranties in the purchase agreement is not sufficient to exempt buyers from their duty to inquire into the financial condition of a company before proceeding with a purchase.
In a decision rendered on February 11, 2020, the Superior Court reiterated the principle established by the Supreme Court of Canada, that between professionals and building contractors, liability ultimately rests solely with the party responsible for the initial fault.
Both the short- and long-term functioning of many companies have been affected by the COVID-19 pandemic. One of the important functions being significantly affected is the preparation and holding of a company’s annual general meeting (“AGM”). The Canada Business Corporations Act (the “CBCA”) provides that companies must hold their AGMs not later than fifteen months after holding the last preceding annual meeting but also no later than six months after the end of the corporation’s preceding financial year. This requirement is proving difficult to fulfill for many companies as a result of the numerous technical and logistical difficulties posed by the COVID-19 pandemic.
In its recent decision in Municipalité de Piedmont v. Uniroc Construction Inc., the Quebec Court of Appeal ruled that a public sector client must reject a bid whose unit prices are unbalanced. At the same time, it reiterated that the principle of balance and equality between bidders must prevail.
Some argue that the COVID-19 crisis should not have been such a sudden and significant shock, and that a global pandemic should have been on the list of foreseeable risks. Some governments already had relevant health measures and public policies in their tool kits, ready to deploy. This being the case, should business leaders have been better informed about the likelihood of a pandemic? Should this have been on their risk horizon? What role can directors play if they want to help the organisation plan for future risks?