Jean-Sébastien Desroches Partner, Lawyer

Profile

Partner

Jean-Sébastien Desroches practices business law and focuses primarily on mergers and acquisitions, infrastructure and project development as well as strategic partnerships. He was the firm’s practice leader for the Business Law Group up to 2018. 

He has had the opportunity to steer several major transactions, complex legal operations, cross-border transactions, reorganizations, and investments in Canada and at an international level on behalf of Canadian, American and European clients, international corporations and institutional clients in the manufacturing, transportation, pharmaceutical, financial and energy sectors.

Jean-Sébastien represents entrepreneurs, institutions and investors in the context of developing and implementing commercial projects, international expansion as well as partnerships (joint ventures). He also advises clients on matters related to venture capital, long-term investments and business transfers.

Jean-Sébastien is also interested in artificial intelligence (AI) projects and their legal ramifications, especially regarding the various branches and applications of artificial intelligence in businesses and industries. He created the Lavery Legal Lab on Artificial Intelligence (L3AI) to analyze and monitor recent and anticipated developments in this field from a legal perspective.

Representive mandates 

  • Set up of an investment fund (real estate, infrastructure and sustainable investment]
  • Represents CDPQ with its investment in Beyond Technologies
  • Represents Devencore Corporate with the sale of its business to Avison Young
  • Represents CDPQ with its investment in Savaria Corporation
  • Represents financial holding groups and investors in connection with the establishment of investment programs in the context of the COVID-19 crisis
  • Represents an energy company in connection with the establishment of a joint venture in the field of artificial intelligence
  • Represents institutional and private investors in connection with the establishment of investment funds in the infrastructure, transportation and energy sectors
  • Represents the Caisse de dépôt et placement du Québec in connection with an investment in Top Aces Inc.
  • Represents Neuvoo.ca in connection with an equity investment of $53M by an institutional investor
  • Represents MTY Food Group Inc. in connection with the acquisition of the Yuzu Sushi Canadian franchise network
  • Represents CDPQ Infra Inc. and its affiliates in the development of the Réseau express métropolitain (REM), one of the largest automated transportation systems in the world covering 67 km with 26 stations, on the real estate, transactional and regulatory aspects of the project
  • Represents Héroux-Devtek Inc. and its affiliates in the acquisition of Compañia Española de Sistemas Aeronáuticos (Spain), Beaver Aerospace & Defence (USA), APPH Limited (UK) and APPH Wichita (USA) (subsidiairies of BBA Aviation), and of Eagle Tools & Machine and E2 Precision Products (USA)
  • Represents Caisse de dépôt et placement du Québec in the creation of a global aircraft investment platform of $2 billion U.S., Einn Volant Aircraft Leasing (EVAL), in collaboration with GE Capital Aviation Services (GECAS)
  • Represents Germany-based GFT Technologies SE in the acquisition of V-NEO Inc.
  • Represents Caisse de dépôt et placement du Québec with its investments and private placements in Stornoway Diamonds Corporation
  • Represents Owl's Head Resort and Fred Korman for the sale of the Owl's Head Resort to a group of investors
  • Represents Caisse de dépôt et placement du Québec with respect to private placements and equity investments in WSP Global Inc.
  • Quebec special advisor for BD White Birch Investment LLC (Black Diamond) in the acquisition of the assets of White Birch Paper Company in a reorganization context
  • Represents Total S.A. in the acquisition of assets from Ultramar Inc. and Tribospec Inc.
  • Represents Freestone International L.L.C. and GNL Québec Inc. in the implementation of an investment structure and financing rounds aimed at the development of a $7 billion U.S. project to establish a liquefied natural gas (LNG) terminal at the Port of Saguenay
  • Represents Lallemand Inc. and its affiliates in the implementation of a cooperation agreement with BrettYoung Seeds Limited, the acquisition of an organic products portfolio, and the acquisition of Harmonium International Inc.
  • Represents Caisse de dépôt et placement du Québec in its investments in Groupe Marcelle Inc. (acquisition of Lise Watier Cosmétiques Inc.)
  • Represents Hutchinson S.A. in the acquisition of Marquez Transtech Ltd.
  • Legal counsel to GDI Integrated Facility Services Inc. in a reorganization by way of a plan of arrangement, the listing of the company’s securities on the Toronto Stock Exchange and the prospectus distribution of subordinate voting shares for $161 million
  • Represents Caisse de dépôt et placement du Québec in investments in Fix Auto Inc.
  • Represents Stornoway Diamonds Inc. in setting up its Plan Nord infrastructure project and partnership with the Québec government for the construction and maintenance of the Route 167 Extension to the Otish Mountains
  • Represents CDP Investments Inc. and Caisse de dépôt et placement du Québec in connection with the sale of equity stakes in ACH Limited Partnership and Abitibi-Consolidated Hydro Inc. 
  • Represents Trencap L.P. in the acquisition of equity interests held by GDF Suez in Noverco Inc. (Gaz Métro)
  • Represents Société de transport de l'Outaouais in the acquisition and implementation of the Rapibus infrastructure network
  • Represents Confab Laboratories Inc. in connection with transactions with Roundtable Healthcare Partners L.P. and DPT Laboratories Ltd. (USA)
  • Represents Industrial Alliance in the acquisition of National Warranties MRWV Limited
  • Represents UAP Inc. in the acquisition of Uni-Select Inc.'s Palmar Division
  • Represents the Quebec Railway Corporation Inc. in multi-party transactions for the sale of businesses involving Canadian National Railway Inc., Groupe Le Massif Inc., and Logistec Corporation
  • Represents V Interactions Inc. in the acquisition of Groupe TQS and television networks
  • Represents a major Canadian engineering firm regarding the implementation of private-public partnerships in Canada for the construction, management, and maintenance of hydroelectric power plants
  • Represents Zimmer Holdings Inc. in the acquisition of ORTHOsoft Inc. by way of a takeover bid
  • Represents Activision Inc. with respect to the acquisition of Beenox Inc.
  • Represents Sabex Inc. with respect to its acquisition by Sandoz Canada Inc. 

Publications

Conferences

  • Corporate law course: Association de planification fiscale et financière (APFF)
  • "Five Common Mistakes in International Joint Ventures": International Bar Association (North American Regional Forum News)
  • “The Supreme Court of Canada Renders a Decision on Restrictive Covenants Contained in an Asset Sale Agreement”: In Fact and in Law Express
  • “Strategic Partnerships and Joint Ventures”: presentation given to the Chief Executive Officers Alliance (Quebec)
  • “M&A Trends for 2013 in Canada”: International Bar Association (North American Regional Forum News)
  • “Financing Growth through Strategic International Joint Ventures”: Training sessions, Chamber of Commerce of Metropolitan Montreal
  • “Negotiating Letters of Intention and Letters of Offer”: numerous presentations given to the professional orders of accountants, Montréal divisions
  • “Negotiating Agreements with International Corporations”: Conference Insight Institute
  • “The Private and Public Call for Tenders Process”: Lavery Conferences
  • Numerous talks on business transfers to family members
  • “Financing Growth Through Venture Capital”: Master's thesis

Distinctions

  • The Canadian Legal LEXPERT® Directory in the field of Corporate Commercial Law, Mergers & Acquisitions and Infrastructure Law, since 2021
  • The Best Lawyers in Canada in the field of Corporate Law, 2021
  • Chambers Canada in the field of Corporate Commercial Law, since 2019
  • The Best Lawyers in Canada in the field of Mergers and Acquisitions Law, since 2019
  • Named one of the “Corporate Lawyers to Watch” in the field of business law in the 2013 Guide to the Leading US/Canada Cross-Border Corporate Lawyers in Canada.
  • Named one of the "Top 40 Under 40" in Canada by Lexpert magazine, 2012
Rising Star ANG Best Lawyers 2022 Lexpert 2022

Education

  • North American Common Law Courses, Université de Montréal, 2002
  • LL.M. in Business Law, Université Laval, 2000
  • Canadian Securities Course, Canadian Securities Institute
  • Derivatives Fundamentals Course, Canadian Securities Institute
  • LL.B., Université de Montréal, 1997
  • European Union Law, Université de Nice, France (UFC), 1996
  • Certificate in Political Science, Université de Montréal, 1994

Boards and Professional Affiliations

  • International Bar Association
  • American Bar Association
  • Chief Executive Officers Alliance
  1. Artificial intelligence and its legal challenges

    Is there a greater challenge than to write a legal article on an emerging technology that does not exist yet in its absolute form? Artificial intelligence, through a broad spectrum of branches and applications, will impact corporate and business integrity, corporate governance, distribution of financial products and services, intellectual property rights, privacy and data protection, employment, civil and contractual liability, and a significant number of other legal fields. What is artificial intelligence? Artificial intelligence is “the science and engineering of making intelligence machines, especially intelligent computer programs”.1 Essentially, artificial intelligence technologies aim to allow machines to mimic “cognitive” functions of humans, such as learning and problem solving, in order for them to conduct tasks that are normally performed by humans. In practice, the functions of artificial intelligence are achieved by accessing and analyzing massive data (also known as “big data”) via certain algorithms. As set forth in a report published by McKinsey & Company in 2013 on disruptive technologies, “[i]mportant technologies can come in any field or emerge from any scientific discipline, but they share four characteristics: high rate of technological change, broad potential scope of impact, large economic value that could be affected, and substantial potential for disruptive economic impact”.2 Despite the interesting debate over the impact of artificial intelligence on humanity,3 the development of artificial intelligence has been on an accelerated path in recent years and we witnessed some major breakthroughs. In March 2016, Google’s computer program AlphaGo beat a world champion Go player, Lee Sedol, by 4 to 1 in the ancient Chinese board game. The breakthroughs reignited the world’s interest in artificial intelligence. Technology giants like Google and Microsoft, to name a few, have increased their investments in the research and development of artificial intelligence. This article will discuss some of the applications of artificial intelligence from a legal perspective and certain areas of law that will need to adapt - or be adapted - to the complex challenges brought by current and new developments in artificial intelligence. Legal challenges Artificial intelligence and its potential impacts have been compared to those of the Industrial Revolution, a form of transition to new manufacturing processes using new systems and innovative applications and machines. Health care L’intelligence artificielle est certes promise à un bel avenir dans le Artificial intelligence certainly has a great future in the health care industry. Applications of artificial intelligence with abilities to analyze massive data can make such applications a powerful tool to predict drug performance and help patients find the right drug or dosage that matches with their situation. For example, IBM’s Watson Health program “is able to understand and extract key information by looking through millions of pages of scientific medical literature and then visualize relationships between drugs and other potential diseases”.4 Some features of artificial intelligence can also help to verify if the patient has taken his or her pills through an application on smartphones, which captures and analyzes evidence of medication ingestion. In addition to privacy and data protection concerns, the potential legal challenges faced by artificial intelligence applications in the health care industry will include civil and contractual liabilities. If a patient follows the recommendation made by an artificial intelligence system and it turns out to be the wrong recommendation, who will be held responsible? It also raises legitimate complex legal questions, combined with technological concerns, as to the reliability of artificial intelligence programs and software and how employees will deal with such applications in their day-to-day tasks. Customer services A number of computer programs have been created to make conversation with people via audio or text messages. Companies use such programs for their customer services or for entertainment purposes, for example in messaging platforms like Facebook, Messenger and Snapchat. Although such programs are not necessarily pure applications of artificial intelligence, some of their features, actual or in development, could be considered as artificial intelligence. When such computer programs are used to enter into formal contracts (e.g., placing orders, confirming consent, etc.), it is important to make sure the applicable terms and conditions are communicated to the individual at the end of the line or that a proper disclaimer is duly disclosed. Contract enforcement questions will inevitably be raised as a result of the use of such programs and systems. Financial industry and fintech In recent years, many research and development activities have been carried out in the robotic, computer and tech fields in relation to financial services and the fintech industry. The applications of artificial intelligence in the financial industry will vary from a broad spectrum of branches and programs, including analyzing customers’ investing behaviours or analyzing big data to improve investment strategies and the use of derivatives. Legal challenges associated with artificial intelligence’s applications in the financial industry could be related, for example, to the consequences of malfunctioning algorithms. The constant relationship between human interventions and artificial intelligence systems, for example, in a stock trading platform, will have to be carefully set up to avoid, or at least confine, certain legal risks. Autonomous vehicles Autonomous vehicles are also known as “self-driving cars”, although the vehicles currently permitted to be on public roads are not completely autonomous. In June 2011, the state of Nevada became the first jurisdiction in the world to allow autonomous vehicles to operate on public roads. According to Nevada law, an autonomous vehicle is a motor vehicle that is “enabled with artificial intelligence and technology that allows the vehicle to carry out all the mechanical operations of driving without the active control or continuous monitoring of a natural person”.5 Canada has not adopted any law to legalize autonomous cars yet. Among the significant legal challenges facing autonomous cars, we note the issues of liability and insurance. When a car drives itself and an accident happens, who should be responsible? (For additional discussion of this subject under Québec law, refer to the Need to Know newsletter, “Autonomous vehicles in Québec: unanswered questions” by Léonie Gagné and Élizabeth Martin-Chartrand.) We also note that interesting arguments will be raised respecting autonomous cars carrying on commercial activities in the transportation industry such as shipping and delivery of commercial goods. Liability regimes The fundamental nature of artificial intelligence technology is itself a challenge to contractual and extra-contractual liabilities. When a machine makes or pretends to make autonomous decisions based on the available data provided by its users and additional data autonomously acquired from its own environment and applications, its performance and the end-results could be unpredictable. In this context, Book Five of the Civil Code of Québec (CCQ) on obligations brings highly interesting and challenging legal questions in view of anticipated artificial intelligence developments: Article 1457 of the CCQ states that: Every person has a duty to abide by the rules of conduct incumbent on him, according to the circumstances, usage or law, so as not to cause injury to another. Where he is endowed with reason and fails in this duty, he is liable for any injury he causes to another by such fault and is bound to make reparation for the injury, whether it be bodily, moral or material in nature. He is also bound, in certain cases, to make reparation for injury caused to another by the act, omission or fault of another person or by the act of things in his custody. Article 1458 of the CCQ further provides that: Every person has a duty to honour his contractual undertakings. Where he fails in this duty, he is liable for any bodily, moral or material injury he causes to the other contracting party and is bound to make reparation for the injury; neither he nor the other party may in such a case avoid the rules governing contractual liability by opting for rules that would be more favourable to them. Article 1465 of the CCQ states that: The custodian of a thing is bound to make reparation for injury resulting from the autonomous act of the thing, unless he proves that he is not at fault. The issues of foreseeable damages or direct damages, depending on the liability regime, and of the “autonomous act of the thing” will inescapably raise interesting debates in the context of artificial intelligence applications in the near future. In which circumstances the makers or suppliers of artificial intelligence applications, the end-users and the other parties benefiting from such applications could be held liable – or not – in connection with the results produced by artificial intelligence applications and the use of such results? Here again, the link between human interventions - or the absence of human interventions - with artificial intelligence systems in the global chain of services, products and outcomes provided to a person will play an important role in the determination of such liability. Among the questions that remain unanswered, could autonomous systems using artificial intelligence applications be “personally” held liable at some point? And how are we going to deal with potential legal loopholes endangering the rights and obligations of all parties interacting with artificial intelligence? In January 2017, the Committee on Legal Affairs of European Union (“EU Committee”) submitted a motion to the European Parliament which calls for legislation on issues relating to the rising of robotics. In the recommendations of the EU Committee, liability law reform is raised as one of the crucial issues. It is recommended that “the future legislative instrument should provide for the application of strict liability as a rule, thus requiring only proof that damage has occurred and the establishment of a causal link between the harmful behavior of a robot and the damage suffered by an injured party”.6 The EU Committee also suggests that the European Parliament considers implementing a mandatory insurance scheme and/or a compensation fund to ensure the compensation of the victims. What is next on the artificial intelligence front? While scientists are developing artificial intelligence at a speed faster than ever in many different fields and sciences, some areas of the law may need to be adapted to deal with associated challenges. It is crucial to be aware of the legal risks and to make informed decisions when considering the development and use of artificial intelligence. Artificial intelligence will have to learn to listen, to appreciate and understand concepts and ideas, sometimes without any predefined opinions or beacons, and be trained to anticipate, just like human beings (even if some could argue that listening and understanding remain difficult tasks for humans themselves). And at some point in time, artificial intelligence developments will get their momentum when two or more artificial intelligence applications are combined to create a superior or ultimate artificial intelligence system. The big question is, who will initiate such clever combination first, humans or the artificial intelligence applications themselves? John McCarthy, What is artificial intelligence?, Stanford University. Disruptive technologies: Advances that will transform life, business, and the global economy, McKinsey Global Institute, May 2013. Alex Hern, Stephen Hawking: AI will be “either best or worst thing” for humanity, theguardian. Engene Borukhovich, How will artificial intelligence change healthcare?, World Economic Forum. Nevada Administrative Code Chapter 482A-Autonomous Vehicles, NAC 482A.010. Committee on Legal Affairs, Draft report with recommendations to the Commission on Civil Law Rules on Robotics, article 27. (2015/2103 (INL))

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  2. Artificial Intelligence and the 2017 Canadian Budget: is your business ready?

    The March 22, 2017 Budget of the Government of Canada, through its “Innovation and Skills Plan” (http://www.budget.gc.ca/2017/docs/plan/budget-2017-en.pdf) mentions that Canadian academic and research leadership in artificial intelligence will be translated into a more innovative economy and increased economic growth. The 2017 Budget proposes to provide renewed and enhanced funding of $35 million over five years, beginning in 2017–2018 to the Canadian Institute for Advanced Research (CIFAR) which connects Canadian researchers with collaborative research networks led by eminent Canadian and international researchers on topics including artificial intelligence and deep learning. These measures are in addition to a number of interesting tax measures that support the artificial intelligence sector at both the federal and provincial levels. In Canada and in Québec, the Scientific Research and Experimental Development (SR&ED) Program provides a twofold benefit: SR&ED expenses are deductible from income for tax purposes and a SR&ED investment tax credit (ITC) for SR&ED is available to reduce income tax. In some cases, the remaining ITC can be refunded. In Québec, a refundable tax credit is also available for the development of e-business, where a corporation mainly operates in the field of computer system design or that of software edition and its activities are carried out in an establishment located in Québec. This 2017 Budget aims to improve the competitive and strategic advantage of Canada in the field of artificial intelligence, and, therefore, that of Montréal, a city already enjoying an international reputation in this field. It recognises that artificial intelligence, despite the debates over ethical issues that currently stir up passions within the international community, could help generate strong economic growth, by improving the way in which we produce goods, deliver services and tackle all kinds of social challenges. The Budget also adds that artificial intelligence “opens up possibilities across many sectors, from agriculture to financial services, creating opportunities for companies of all sizes, whether technology start-ups or Canada’s largest financial institutions”. This influence of Canada on the international scene cannot be achieved without government supporting research programs and our universities contributing their expertise. This Budget is therefore a step in the right direction to ensure that all the activities related to artificial intelligence, from R&D to marketing, as well as design and distributions, remain here in Canada. The 2017 budget provides $125 million to launch a Pan-Canadian Artificial Intelligence Strategy for research and talent to promote collaboration between Canada’s main centres of expertise and reinforce Canada’s position as a leading destination for companies seeking to invest in artificial intelligence and innovation. Lavery Legal Lab on Artificial Intelligence (L3AI) We anticipate that within a few years, all companies, businesses and organizations, in every sector and industry, will use some form of artificial intelligence in their day-to-day operations to improve productivity or efficiency, ensure better quality control, conquer new markets and customers, implement new marketing strategies, as well as improve processes, automation and marketing or the profitability of operations. For this reason, Lavery created the Lavery Legal Lab on Artificial Intelligence (L3AI) to analyze and monitor recent and anticipated developments in artificial intelligence from a legal perspective. Our Lab is interested in all projects pertaining to artificial intelligence (AI) and their legal peculiarities, particularly the various branches and applications of artificial intelligence which will rapidly appear in companies and industries. The development of artificial intelligence, through a broad spectrum of branches and applications, will also have an impact on many legal sectors and practices, from intellectual property to protection of personal information, including corporate and business integrity and all fields of business law. In our following publications, the members of our Lavery Legal Lab on Artificial Intelligence (L3AI) will more specifically analyze certain applications of artificial intelligence in various sectors and industries.

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  3. Legal newsletter for business entrepreneurs and executives, Number 18

    CONTENTS Easing the financing rules while waiting for crowdfunding Avoiding disputes by entering into a shareholders’ agreement Tenth anniversary of Bill 72 : Land protecton and rehabilitationEASING THE FINANCING RULES WHILE WAITING FOR CROWDFUNDINGJosianne BeaudryThere is no doubt that small and mediumsized enterprises (“SMEs”) and businesses in the startup phase (also known as early- stage businesses) face multiple challenges when seeking financing. Not only must they identify investors who are prepared to take the risk of investing in their projects, they must also ensure that they comply with the rules on raising capital imposed by the securities regulators.Under the rules in force in Quebec and the rest of Canada, for a corporation to raise capital, unless it has an exemption, it must retain the services of a firm registered in an appropriate category with the Canadian Securities Administrators, and must also prepare and provide the purchasers with a disclosure document known as a “ prospectus”.This procedure is generally too onerous and demanding for SMEs and startups, not to mention the obligations these companies would have after the financing to prepare and distribute continuous disclosure documents, such as financial statements, management’s discussion and analysis and press releases.Thus, SMEs and startups are often limited to raising funds from business associates, family (“love money”) and accredited investors — which are generally persons with a net income before taxes exceeding $200,000 or net assets of at least $5,000,000.SMEs and startups also have the option of soliciting funds from a broader range of investors without having to prepare a prospectus through the use of an offering memorandum. The offering memorandum is a disclosure document similar to a prospectus but which is more simple to prepare and less costly. This financing alternative seems generally to be overlooked and underused by SMEs and startups. The lack of use of the offering memorandum is likely due to the accompanying regulatory requirement of preparing audited financial statements drawn up in accordance with the IFRS. This type of financing appears to be much more popular in the Canadian West.However, in this regard, on December 20, 2012, the Autorité des marchés financiers (“AMF”) issued an interim local order allowing SMEs and startups that are not otherwise reporting issuers, as defined in the securities legislation, to distribute their securities by means of an offering memorandum without having to include audited financial statements drawn up in accordance with the IFRS.Thus, it is henceforth possible for these corporations to issue an offering memorandum without having to prepare audited financial statements. Moreover, the unaudited financial statements accompanying the offering memorandum may even be drawn up in accordance with the Canadian GAAP applying to private issuers.However, to take advantage of this easing of the regulatory requirements, the issuer must limit the total amount of all of its offerings made under this rule to $500,000 and limit the aggregate acquisition cost per purchaser to $2,000 per 12-month period preceding the offering (and not $2,000 per issuer). A warning must also be added to the offering memorandum clearly informing any purchaser of the fact that the financial statements are not audited and are not drawn up in accordance with the IFRS, and of the limits on the investment threshold.It should also be noted that, under the Quebec legislation, the use of an offering memorandum by a corporation to raise funds is subject to translation requirements. Thus, for purposes of soliciting financing in the province of Quebec, the offering memorandum must either be written in French or in both French and English.Conscious of the financing needs of SMEs and startups, at the same time as the AMF was announcing the easing of the rules on the contents of the offering memorandum (which is slated to apply for a maximum period of two years), the AMF also launched a consultation on equity crowdfunding.Equity crowdfunding consists of raising capital from a large number of investors, who are not necessarily accredited investors, by means of an electronic platform in return for the issuance of securities. Some jurisdictions such as the United States (under development since April 5, 2012), England and Australia have adopted rules authorizing equity crowdfunding.These rules generally provide that corporations may only raise a modest amount through this type of financing. Similarly, the amount investors may invest is also small. At present, this type of financing is prohibited in Canada unless one has an exemption or issues a prospectus.The main objective of equity crowdfunding is to facilitate access to capital at a reduced cost. However, this objective is difficult to reconcile with recent developments in the regulation of Canadian securities markets aimed at protecting investors.Indeed, in carrying out their mission to protect investors, Canadian authorities have continued to increase the regulatory requirements (disclosure, compliance, proficiency, etc.), which also has the effect of increasing the operating costs of the various participants in the financial markets.Some financial market stakeholders are concerned about the risks of an exodus of innovative Quebec corporations and talent which could be tempted to move south to the U.S. to finance their projects, where they would benefit from a more streamlined and less costly financing environment. The Canadian Securities Administrators will have to meet the challenge of finding the difficult balance between the financing needs of SMEs and startups and the protection of investors.AVOIDING DISPUTES BY ENTERING INTO A SHAREHOLDERS’ AGREEMENTJean-Sébastien DesrochesDisputes between shareholders sometimes have serious consequences for a business corporation and can be an impediment to the carrying on of the operations in the ordinary course of business. Such disputes are usually complex and costly while also being protracted in nature. In this context, a well-written shareholders’ agreement that is tailored to the business can help to avoid disputes or, at least, limit their scope and provide a framework for managing them.Shareholders’ agreements may not age well over time. They may not evolve in sync with the business and its shareholders, particularly in a context of expansion and growth. Furthermore, it is generally difficult to change a shareholders’ agreement once it has been signed, and an attempt to change the ground rules in midstream could be a source of additional conflicts between the shareholders. It is therefore imperative for the shareholders to establish their rights and obligations, as well as those of the corporation, in a shareholders’ agreement as early as possible in the life of the corporation.No one will be surprised to learn that money is the main cause of disputes between shareholders, whether it is the money invested (or to be invested) in the corporation or money that the corporation pays (or will pay) to its shareholders in the form of dividends or otherwise. At the same time, the shareholders’ contributions in property, services, time and money often create friction within the corporation, particularly since the shareholders’ business, financial and other expectations may evolve differently - even in opposite directions - over time.Apart from financial issues, personal conflicts can also inflame the relationship between the shareholders, especially when family members are involved with the business. The same is true when decisions are to be made on the global objectives of the corporation and strategic issues.In addition, if the corporation has shareholders from different jurisdictions, cultural differences can also give rise to tension between the shareholders. In such cases, the text of the shareholders’ agreement must be very explicit and should, if possible, be supported by concrete examples of the application of the more complex clauses, such as valuation of the shares and the procedure for exercising a right of first refusal. In all cases, it is essential to provide for the order of priority for the exercise of the various rights, remedies and mechanisms contained in the agreement to avoid adding issues of interpretation of the agreement to the existing business issues.It is often at times when the business of the corporation is not faring so well that the common disagreements between shareholders tend to flare up and lead to litigation. The shareholders’ agreement should therefore anticipate the future situations which the corporation may face, whether positive or negative, such as refinancing, the arrival of new shareholders, family succession, the acquisition or sale of a business, international expansion, the development of new markets, and retirement from the business.The ability to anticipate future developments takes on its full importance when one considers the context in which the shareholders’ agreement is being entered into. Thus, the shareholders’ and drafter’s objectives may be different in the case of an agreement concluded for tax and estate planning purposes versus an agreement dealing, for instance, with the arrival of a new investor, a transaction for the acquisition of the business (e.g., business transfer or succession) or a start-up situation. Even in a very particular context such as this, the shareholders’ agreement should still give the corporation and its shareholders the means to achieve their ambitions and the requisite flexibility to carry out all their business projects.In addition to their status as shareholders, the shareholders may also hold several other titles or functions in the corporation, since they often also act as directors, officers and employees. Disputes may therefore arise as a result of these different roles and the associated rights and obligations, and degenerate very quickly into personal disputes.The drafting and negotiation of a shareholders’ agreement is a complex and exacting exercise requiring both legal and practical experience. Thus, a review of the cases in the courts shows that disputes pertaining to the most complex terms and conditions of the agreement, such as the mechanisms for the arrival and departure of shareholders and transfers of securities (right of first refusal, purchase and sale (shotgun) clause, etc.) as well as interpretation of non-competition, non-solicitation and intellectual property provisions, are among the subjects most frequently debated in the courts.Valuation mechanisms for assessing the price of the shares in different situations should also be clearly established in the shareholders’ agreement. Such mechanisms should oversee and govern any discussions on the value to be attributed to the shares of the corporation in the context of a sale or transfer, including in complicated situations where there are ongoing disputes among the parties.Lastly, it is fundamental to provide for effective conflict resolution mechanisms tailored to the needs of the parties ( confidentiality of the process, cultural and linguistic factors, obligation to pursue the operations of the business as a going concern in spite of the dispute, etc.) that allow for action to be taken quickly to preserve the value of the business. This will enable the parties to avoid the forced liquidation of the business, with its disastrous consequences for the employees, suppliers and clients.TENTH ANNIVERSARY OF BILL 72: LAND PROTECTION AND REHABILITATIONSophie PrégentThe planning of a construction project or start-up of an industrial activity requires prior verification of a number of matters. Despite the introduction, ten years ago this year, of rules in the Environment Quality Act (EQA) governing the protection and rehabilitation of contaminated lands, the physical condition of the project site is often still a neglected issue.While the question of soil contamination can raise issues of civil relations, such as, for example, civil liability or the warranty of quality (against latent defects), in this article, we will focus exclusively on the obligations that can arise from the EQA.The purpose of the EQA is environmental protection. This protection is embodied in measures for prior protection, emergency responses and rehabilitation in the EQA. The EQA also imposes certain duties to act on the users of immovables.POWER TO ISSUE ORDERSThe Minister of Sustainable Development, Environment, Wildlife and Parks ( MSDEWP) has broad powers, including, in particular, the power to order the filing of a rehabilitation plan if he has reason to believe, or ascertains, that contaminants are present on land in a concentration exceeding the limit values prescribed by regulation,1 or that they are likely to affect the environment in general.2Since 2003, this power has applied to all persons who have had custody of the land, in any capacity whatsoever. Such an order can therefore be imposed on tenants and is not limited only to the owner or “polluter” of the land.Thus, it is important for any purchaser to be familiar with the history of the land so that it can assess whether there is a risk that this type of situation could arise.Where such an order has been issued, some means are available for a person to exempt himself from it, in particular, where (i) he was unaware of or had no reason to suspect the condition of the land having regard to the circumstances, practices and the duty of care, or (ii) he was aware of the condition of the premises, but shows that he acted at all times with care and diligence in conformity with the law and, finally, (iii) he shows that the condition of the premises is a result of circumstances exterior to the land and attributable to a third party.CESSATION OF INDUSTRIAL OR COMMERCIAL ACTIVITYWhere a person permanently ceases carrying on a commercial or industrial activity referred to in schedule III of the Land Protection and Rehabilitation Regulation3 (LPRR), the operator must conduct a characterization study of the land.4 This obligation applies where the activity permanently ceases and it triggers the further obligation to carry out the rehabilitation of the land if the contaminants present in the soil exceed the regulatory concentration limit. This work must be performed in accordance with a rehabilitation plan which is submitted to the MSDEWP and approved by him.While this obligation to carry out the rehabilitation of the land only applies to the operator of the activity, it creates a restriction on the use of the land which must definitely be taken into account by the purchaser in the context of a transaction. Indeed, the failure by the operator to perform the rehabilitation will have significant consequences for the purchaser, especially if it wishes to change the use of the land.CHANGE IN USEWhere a person wishes to change the use of land which served as the site of a commercial or industrial activity listed in schedule III of the LPRR, he must conduct a characterization study, unless he already has such a study in hand, and it is still current.5Obviously, in the context of an acquisition, if this obligation exists, it is advisable for the purchaser to ensure it is satisfied by the vendor, or, at the very least, that the condition of the premises be very clearly disclosed to avoid any unpleasant consequences down the road.If the characterization study reveals that contaminants are present in amounts exceeding the regulatory limits, a rehabilitation plan will have to be submitted to the MSDEWP for approval, after which the rehabilitation will have to be done before the new use of the land can commence. This work will obviously create delays for the purchaser since the municipality will not issue the necessary permits to proceed with the subdivision or construction until the land has been decontaminated.In the event that the land has already been decontaminated in accordance with the applicable procedures, it is important for the purchaser to carefully review the rehabilitation plan submitted to the MSDEWP and the various entries made in the land register to determine whether there are any restrictions on the use of the land, or whether any excess contaminants may have been left in the ground with the consent of the MSDEWP.REGISTRATION REQUIREMENTSThe EQA contains a series of measures requiring the publication of notices in the land register with respect to contaminated lands,6 specifically, notices of contamination, notices of decontamination, and notices of use restriction. In addition, in some circumstances, certain notices must also be given to the local municipality, to the Minister of SDEWP, and even to neighbours.Clearly, the existence of such notices must be verified when any transaction is being undertaken. However, it is important to remember that the EQA does not regulate all of the situations relating to contaminated lands and, in particular, historic contamination and contamination resulting from activities not covered by the LPRR. The existence or lack of registrations against the land in the land register does not therefore guarantee that the premises are in compliance with the rules of the EQA on the rehabilitation of contaminated soils.LIMITED APPLICATIONThus, as far as contaminated soils are concerned, the application of the EQA is limited. For instance, there is no general obligation to perform the rehabilitation of land following the completion of a characterization study done on a voluntary basis. However, the presence of contaminants could trigger a restriction on the use of the land which could prevent the purchaser from being able to use it for the planned activity.7Accordingly, as a purchaser, it is very important to be well informed of the condition and history of an immovable, and even, most of the time, to obtain an environmental characterization of the subject property. It is a question of exercising the care and diligence of a responsible purchaser._________________________________________ 1 The Land Protection and Rehabilitation Regulation, CQLR, chapter Q-2, r 37.2 Section 31.43 of the Environment Quality Act, CQLR, chapter Q-2, provides more specifically that this applies to contaminants which are “likely to adversely affect the life, health, safety, welfare or comfort of human beings, other living species or the environment in general, or to be detrimental to property”.3 Supra, note 1. This is a list of most of the activities that are likely to cause soil contamination.4 See sections 31.51 and following of the EQA.5 See sections 31.51 and following of the EQA.6 See sections 31.51 and following of the EQA.7 For example, a residential development that cannot proceed on land where contaminants exceed the acceptable limits for residential usage.

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  4. The Supreme Court of Canada Renders a Decision on Restrictive Covenants Contained in an Asset Sale Agreement

    On September 12, 2013, in Payette v. Guay inc.1, the Supreme Court of Canada rendered a decision which will be of interest to anyone involved in a transaction for the purchase or sale of assets. The Court shed some light on the interpretation of clauses restricting employment and post-employment competition which are contained in an agreement providing for the sale of assets but which, incidentally, includes an employment contract.Following a detailed analysis of the wording of the asset sale agreement and the circumstances surrounding its negotiation, the Supreme Court confirms that the clauses in dispute are not related to an employment contract but rather to a sale agreement. According to the Court, the essence of the principal obligations set out in the primary contract do not relate to an employment relationship insofar as such a relationship is merely incidental to the sale agreement.But that is not all: Justice Wagner, writing for the Court, confirms that in order for a non-solicitation clause negotiated as part as an asset sale agreement to be valid, it does not need to be limited in its territorial application.Here are his reasons:  The object of a non-solicitation clause is narrower than that of a non-competition clause. The non-solicitation clause creates obligations which are less restrictive than those created by a non-competition clause. While not specified, the territorial scope of the clause can easily be circumscribed by conducting an analysis of the target customers. The modern economy and new technologies no longer allow for the geographic limitation of a customer base.Accordingly, a non-solicitation clause contained in an asset sale agreement cannot be automatically invalidated due to the absence of a territorial limitation.This decision will be assessed further in an upcoming publication._________________________________________  1 2013 S.C.R. 45.

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  1. The Best Lawyers in Canada 2023 recognize 67 lawyers of Lavery

    Lavery is pleased to announce that 67 of its lawyers have been recognized as leaders in their respective fields of expertise by The Best Lawyers in Canada 2023. The following lawyers also received the Lawyer of the Year award in the 2023 edition of The Best Lawyers in Canada: René Branchaud : Natural Resources Law Chantal Desjardins : Intellectual Property Law Bernard Larocque : Legal Malpractice Law Patrick A. Molinari : Health Care Law   Consult the complete list of Lavery's lawyers and their fields of expertise: Josianne Beaudry : Mergers and Acquisitions Law / Mining Law Laurence Bich-Carrière : Class Action Litigation / Corporate and Commercial Litigation / Product Liability Law Dominic Boivert : Insurance Law (Ones To Watch) Luc R. Borduas : Corporate Law / Mergers and Acquisitions Law Daniel Bouchard : Environmental Law Laurence Bourgeois-Hatto : Workers' Compensation Law René Branchaud : Mining Law / Natural Resources Law / Securities Law Étienne Brassard : Equipment Finance Law / Mergers and Acquisitions Law / Real Estate Law Jules Brière : Aboriginal Law / Indigenous Practice / Administrative and Public Law / Health Care Law Myriam Brixi : Class Action Litigation Benoit Brouillette : Labour and Employment Law Richard Burgos : Mergers and Acquisitions Law / Corporate Law Marie-Claude Cantin : Insurance Law / Construction Law Brittany Carson : Labour and Employment Law Eugene Czolij : Corporate and Commercial Litigation France Camille De Mers : Mergers and Acquisitions Law (Ones To Watch) Chantal Desjardins : Intellectual Property Law Jean-Sébastien Desroches : Corporate Law / Mergers and Acquisitions Law Raymond Doray : Privacy and Data Security Law / Administrative and Public Law / Defamation and Media Law Christian Dumoulin : Mergers and Acquisitions Law Alain Y. Dussault : Intellectual Property Law Isabelle Duval : Family Law Chloé Fauchon : Municipal Law (Ones To Watch) Philippe Frère : Administrative and Public Law Simon Gagné : Labour and Employment Law Nicolas Gagnon : Construction Law Richard Gaudreault : Labour and Employment Law Danielle Gauthier : Labour and Employment Law Julie Gauvreau : Intellectual Property Law Michel Gélinas : Labour and Employment Law Caroline Harnois : Family Law / Family Law Mediation / Trusts and Estates Marie-Josée Hétu : Labour and Employment Law Alain Heyne : Banking and Finance Law Édith Jacques : Energy Law / Corporate Law Pierre Marc Johnson, Ad. E.  : International Arbitration Marie-Hélène Jolicoeur : Labour and Employment Law Isabelle Jomphe : Intellectual Property Law Guillaume Laberge : Administrative and Public Law Jonathan Lacoste-Jobin : Insurance Law Awatif Lakhdar : Family Law Bernard Larocque : Professional Malpractice Law / Class Action Litigation / Insurance Law / Legal Malpractice Law Myriam Lavallée : Labour and Employment Law Guy Lavoie : Labour and Employment Law / Workers' Compensation Law Jean Legault : Banking and Finance Law / Insolvency and Financial Restructuring Law Carl Lessard : Workers' Compensation Law / Labour and Employment Law Josiane L'Heureux : Labour and Employment Law Despina Mandilaras : Construction Law / Corporate and Commercial Litigation (Ones To Watch) Hugh Mansfield : Intellectual Property Law Zeïneb Mellouli : Labour and Employment Law Patrick A. Molinari : Health Care Law André Paquette : Mergers and Acquisitions Law Luc Pariseau : Tax Law Ariane Pasquier : Labour and Employment Law Jacques Paul-Hus : Mergers and Acquisitions Law Hubert Pepin : Labour and Employment Law Martin Pichette : Insurance Law / Professional Malpractice Law Élisabeth Pinard : Family Law François Renaud : Banking and Finance Law / Structured Finance Law Judith Rochette : Insurance Law / Professional Malpractice Law Ian Rose FCIArb : Director and Officer Liability Practice / Insurance Law Chantal Saint-Onge : Corporate and Commercial Litigation (Ones To Watch) Éric Thibaudeau : Workers' Compensation Law André Vautour : Corporate Governance Practice / Corporate Law / Information Technology Law / Intellectual Property Law / Technology Law Bruno Verdon : Corporate and Commercial Litigation Sébastien Vézina : Mergers and Acquisitions Law Yanick Vlasak : Corporate and Commercial Litigation Jonathan Warin : Insolvency and Financial Restructuring Law These recognitions are further demonstration of the expertise and quality of legal services that characterize Lavery’s professionals.

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  2. The Best Lawyers in Canada 2022 recognize 68 lawyers of Lavery

    Lavery is pleased to announce that 68 of its lawyers have been recognized as leaders in their respective fields of expertise by The Best Lawyers in Canada 2022. Lawyer of the Year   The following lawyers also received the Lawyer of the Year award in the 2022 edition of The Best Lawyers in Canada: Caroline Harnois: Family Law Mediation Bernard Larocque: Professional Malpractice Law   Consult the complete list of Lavery's lawyers and their fields of expertise: Josianne Beaudry : Mining Law / Mergers and Acquisitions Law Dominique Bélisle : Energy Law Laurence Bich-Carrière : Class Action Litigation René Branchaud : Mining Law / Natural Resources Law / Securities Law Étienne Brassard : Mergers and Acquisitions Law / Real Estate Law / Equipment Finance Law Dominic Boisvert: Insurance Law (Ones To Watch) Luc R. Borduas : Corporate Law Daniel Bouchard : Environmental Law Jules Brière : Administrative and Public Law / Health Care Law Myriam Brixi : Class Action Litigation Benoit Brouillette : Labour and Employment Law Richard Burgos : Corporate Law / Mergers and Acquisitions Law Marie-Claude Cantin : Construction Law / Insurance Law Charles Ceelen-Brasseur : Corporate Law (Ones To Watch) Eugène Czolij : Corporate and Commercial Litigation / Insolvency and Financial Restructuring Law Chantal Desjardins : Intellectual Property Law Jean-Sébastien Desroches : Corporate Law / Mergers and Acquisitions Law Michel Desrosiers : Labour and Employment Law Raymond Doray, Ad. E : Administrative and Public Law / Defamation and Media Law / Privacy and Data Security Law Christian Dumoulin : Mergers and Acquisitions Law Alain Y. Dussault : Intellectual Property Law Isabelle Duval : Family Law Chloé Fauchon: Municipal Law (Ones To Watch) Philippe Frère : Administrative and Public Law Simon Gagné : Labour and Employment Law Nicolas Gagnon : Construction Law Richard Gaudreault : Labour and Employment Law Danielle Gauthier : Labour and Employment Law Julie Gauvreau : Intellectual Property Law Michel Gélinas : Labour and Employment Law Caroline Harnois : Family Law / Family Law Mediation / Trusts and Estates Marie-Josée Hétu : Labour and Employment Law Alain Heyne : Banking and Finance Law Édith Jacques : Corporate Law / Energy Law Pierre Marc Johnson, Ad. E., G.O.Q., MSRC : International Arbitration Marie-Hélène Jolicoeur : Labour and Employment Law Isabelle Jomphe : Intellectual Property Law Guillaume Laberge: Administrative and Public Law Jonathan Lacoste-Jobin: Insurance Law Awatif Lakhdar: Family Law Bernard Larocque: Class Action Litigation / Insurance Law / Professional Malpractice Law Myriam Lavallée: Labour and Employment Law Guy Lavoie: Labour and Employment Law / Workers’ Compensation Law Jean Legault: Banking and Finance Law / Insolvency and Financial Restructuring Law Carl Lessard: Labour and Employment Law / Workers' Compensation Law Josiane L'Heureux: Labour and Employment Law Hugh Mansfield : Intellectual Property Law Zeïneb Mellouli : Labour and Employment Law Patrick A. Molinari, Ad.E., MSRC : Health Care Law André Paquette: Mergers and Acquisitions Law Luc Pariseau : Tax Law Jacques Paul-Hus : Mergers & Acquisitions Law Ariane Pasquier : Labour and Employment Law Hubert Pepin : Labour and Employment Law Martin Pichette : Insurance Law / Professional Malpractice Law Élisabeth Pinard : Family Law François Renaud : Banking and Finance Law Marc Rochefort : Securities Law Judith Rochette : Professional Malpractice Law Ian Rose : Director and Officer Liability Practice / Insurance Law Éric Thibaudeau: Workers' Compensation Law Philippe Tremblay : Construction Law / Corporate and Commercial Litigation Jean-Philippe Turgeon : Franchise Law André Vautour : Corporate Law / Energy Law / Information Technology Law / Intellectual Property Law / Private Funds Law / Technology Law Bruno Verdon : Corporate and Commercial Litigation Sébastien Vézina : Mergers and Acquisitions Law Yanick Vlasak : Corporate and Commercial Litigation Jonathan Warin : Insolvency and Financial Restructuring Law

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  3. Infrastructure projects: Lexpert Recognizes Four Partners as Leading Lawyers in Canada

    On August 5, 2021, Lexpert recognized the expertise of four of our partners in its 2021 Lexpert Special Edition: Infrustructure. The partners, Jean-Sébastien Desroches, Nicolas Gagnon, Éric Thibaudeau and André Vautour now rank among Canada’s leaders in the area of infrastructure law. Jean-Sébastien Desroches practices business law and focuses primarily on mergers and acquisitions, infrastructure and project development as well as strategic partnerships. He frequently steers major transactions—complex legal operations, cross-border transactions, reorganizations, and investments—in Canada and at an international level on behalf of Canadian, American, and European clients and international corporations in the manufacturing, transportation, pharmaceutical, financial, and energy sectors. Nicolas Gagnon specializes in construction law and surety law. He counsels public and private sector clients, professional services firms and contractors as well as surety companies at every stage of construction projects. He advises clients with respect to the public bidding and procurement process, and is involved in the drafting of contract documents and the management of the work and any claims resulting therefrom. Éric Thibaudeau is a member of the Labour and Employment Group. He has special expertise in the area of occupational health and safety, regarding issues within the jurisdiction of the Administrative Labour Tribunal (ALT) as well as penal infractions prosecuted by the CNESST that are heard in the Court of Québec’s Criminal and Penal Division. He also acts for employers in grievance arbitrations, labour-relations matters and collective agreement decrees. In addition, he advises construction contractors and project owners on all matters within the jurisdiction of the construction industry regulatory authorities, such as the Commission de la construction du Québec and the Régie du bâtiment du Québec. André Vautour practises in the fields of corporate and commercial law and is particularly interested in corporate governance, strategic alliances, joint ventures, investment funds and mergers and acquisitions of private corporations. He frequently advises various clients on major infrastructure construction projects. He practises in the field of technology law (drafting technology development and transfer agreements, licensing agreements, distribution agreements, outsourcing agreements, and e-commerce agreements).

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  4. Lavery helps to establish an affordable housing fund worth $151 million

    On May 4, 2021, the Government of Canada, the Government of Québec, the Fonds de solidarité FTQ and Ivanhoé Cambridge announced the formation of a consortium of investors that will make $120 million available to co-ops, non-profit organizations (NPOs) and housing agencies for the construction or renovation of affordable housing. The Lucie and André Chagnon Foundation, Fondaction, the Mirella and Lino Saputo Foundation and the J. Armand Bombardier Foundation collectively added $31 million to the sum. The strategic partnership will be managed by the Association des groupes de ressources techniques du Québec (AGRTQ) starting in the fall of 2021.  Lavery Lawyers advised and assisted the project partners with the drafting and implementation of the legal structure and documentation necessary to create and start up the consortium of investors. Lavery is pleased to have put its expertise and professional and financial resources to work for the project, and to thereby contribute to an initiative that benefits both families and the economic vitality of Quebec. The Lavery team, led by Brigitte Gauthier, was composed of Jean-Sébastien Desroches, Jean-François Maurice, François Renaud, Bernard Trang and André Vautour.

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