N-3, r. 8.1 - Regulation respecting the compensation fund of the Chambre des notaires du Québec

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Full text
chapter N-3, r. 8.1
Regulation respecting the compensation fund of the Chambre des notaires du Québec
NOTARIES — COMPENSATION FUND
Notaries Act
(chapter N-3).
N-3
Professional Code
(chapter C-26, s. 89.1).
C-26
September 1 2012
DIVISION I
GENERAL
§ 1.  — Compensation fund
1. The board of directors of the Chambre des notaires du Québec shall establish a compensation fund to compensate a claimant, within the limits provided for in section 18, for the use of sums or property by a notary for purposes other than those for which they were entrusted to him in the practice of his profession under a service contract.
O.C. 59-2012, s. 1; 171-2020O.C. 171-2020, s. 1.
2. The compensation fund must be maintained at not less than $1,000,000.
It shall consist of
(1)  sums allocated to the fund by the board of directors;
(2)  assessments levied for that purpose;
(3)  sums or property recovered from notaries by subrogation or pursuant to section 159 of the Professional Code (chapter C-26);
(4)  income earned on the sums and property constituting the fund; and
(5)  sums paid by an insurer under an insurance policy held by the Order.
O.C. 59-2012, s. 2; 171-2020O.C. 171-2020, s. 2.
§ 2.  — Rules for the administration and investment of the fund
3. The Order administers the fund and withdraws administration fees. To that end, the executive committee is authorized to enter into any insurance or reinsurance contract for the purposes of the fund and to pay the premiums out of the fund.
O.C. 59-2012, s. 3; 171-2020O.C. 171-2020, s. 3.
4. The keeping of the accounting of the fund is separate from that of the Order.
O.C. 59-2012, s. 4; 171-2020O.C. 171-2020, s. 4.
5. The Order shall invest the sums making up the fund as follows:
(1)  the portion of the sums which the Order intends to use on the short-term basis shall be deposited in a financial institution governed by the Trust Companies and Savings Companies Act (chapter S-29.02), the Bank Act (S.C. 1991, c. 46), the Act respecting financial services cooperatives (chapter C-67.3), or the Trust and Loan Companies Act (S.C. 1991, c. 45);
(2)  the other portion shall be entrusted to an investment manager for investment in short term securities, fixed interest securities, Canadian or foreign shares, in accordance with the investment policy adopted by the board of directors.
O.C. 59-2012, s. 5; 171-2020O.C. 171-2020, s. 5.
DIVISION II
COMPENSATION FUND COMMITTEE
6. The compensation fund committee, formed by the board of directors pursuant to paragraph 2 of section 86.0.1 of the Professional Code (chapter C-26), is responsible for examining the claims filed against the fund and for deciding claims.
The committee is comprised of no fewer than 5 members, at least one of whom is chosen from among the persons who are not notaries and whose names appear on the list drawn up by the Office des professions du Québec in accordance with the fourth paragraph of section 78 of the Professional Code.
The board of directors designates the committee’s chairman, secretary, and, if necessary, one or more assistant secretaries who perform the same duties as the secretary. The secretary and the assistant secretaries are not members of the committee.
The quorum of the committee is a majority of its members.
O.C. 59-2012, s. 6; 171-2020O.C. 171-2020, s. 6.
7. Where the number of committee members so permits, the committee may sit in divisions comprising 5 members, one of whom shall be the chair or another committee member designated as chair of the division by the committee’s chairman, and another member chosen from among the persons who are not notaries and whose names appear on the list referred to in the second paragraph of section 6.
The quorum of a division is 3 members.
O.C. 59-2012, s. 7; 171-2020O.C. 171-2020, s. 7.
8. Committee members remain in office at the end of their mandates until they are reappointed or replaced by the board of directors.
O.C. 59-2012, s. 8.
9. (Revoked).
O.C. 59-2012, s. 9; 171-2020O.C. 171-2020, s. 8.
DIVISION III
COMPENSATION PROCEDURE
10. Claims against the fund must
(1)  be in writing;
(2)  state all supporting facts and be accompanied by all relevant documents;
(3)  indicate the amount claimed; and
(4)  be sworn and filed with the secretary of the committee.
O.C. 59-2012, s. 10.
11. The secretary of the committee shall inform members of any claim against the fund at the first meeting after the claim is filed.
If the committee has not completed its inquiry into the claim within 90 days after the claim is filed, the secretary of the committee shall, on the expiry of that period, notify the claimant in writing and report to him on the committee’s progress. Until the committee has completed its inquiry, the secretary of the committee shall, every 60 days following the expiry of the 90 day period, notify the claimant in writing that the inquiry is continuing and report on the committee’s progress.
The obligation to notify the claimant as set out in the second paragraph does not apply to the situation contemplated in section 20.
O.C. 59-2012, s. 11; 171-2020O.C. 171-2020, s. 9.
12. To be admissible, a claim against the fund must be filed within the year in which the claimant becomes aware that sums or property have been used for purposes other than those for which they were entrusted to the notary in the practice of his profession.
Subject to section 13, a claim that is not filed within the prescribed period is inadmissible.
O.C. 59-2012, s. 12; 171-2020O.C. 171-2020, s. 10.
13. The period prescribed in section 12 may be extended if the claimant demonstrates that he was unable to file the claim within the prescribed period for reasons beyond his control.
O.C. 59-2012, s. 13.
14. An application by any person to the Order in respect of facts likely to give rise to a claim against the fund is deemed to be a claim within the meaning of section 10 if the application is sent within the period prescribed in section 12.
O.C. 59-2012, s. 14.
15. The committee shall decide, in respect of any claim against the fund, whether the claim should be allowed, in whole or in part, and if so, determines the amount of compensation. The decision of the committee is final.
O.C. 59-2012, s. 15; 171-2020O.C. 171-2020, s. 11.
16. (Revoked).
O.C. 59-2012, s. 16; 171-2020O.C. 171-2020, s. 12.
17. A decision may be rendered in respect of a claim regardless of any action filed by the claimant in a civil court, any judgment rendered by such court, or any decision of the disciplinary council or the Professions Tribunal in respect of the notary concerned.
O.C. 59-2012, s. 17; 171-2020O.C. 171-2020, s. 13.
18. The maximum compensation payable out of the fund is $200,000 per claim arising from a notary’s use, in connection with a service contract, of sums or property for purposes other than those for which they were entrusted to him in the practice of his profession.
The maximum compensation payable out of the fund is $200,000 for the aggregate of claims against the fund arising from a notary’s use, in connection with one or more service contracts entered into with several persons for the same service, of moneys or property for purposes other than those for which they were entrusted to him in the practice of his profession. Where the total of the claims allowed in a case contemplated in this paragraph exceeds the maximum indemnity, the indemnity is distributed in proportion to the amount of each claim.
For the purposes of this section, service means the performance of professional services by a notary pursuant to a service contract entrusted to the notary for the benefit of 2 or more persons.
O.C. 59-2012, s. 18; 171-2020O.C. 171-2020, s. 14.
19. (Revoked).
O.C. 59-2012, s. 19; 171-2020O.C. 171-2020, s. 15.
20. The balance of a notary’s general trust account shall, subject to a regulation made under section 89 of the Professional Code (chapter C-26), be distributed by the secretary of the committee among the claimants in respect of the notary, in proportion and up to the amount of each claim allowed, less the sum paid pursuant to section 18, on the expiry of 60 days following publication of a notice to that effect in a newspaper having general circulation in the place where the notary has or had his professional domicile.
The secretary of the committee shall cause the notice to be published after one year has elapsed without any new claim exceeding the maximum indemnity payable under section 18 against the fund in respect of that notary.
O.C. 59-2012, s. 20; Décision OPQ 2017-141 (French only), s. 38; 171-2020O.C. 171-2020, s. 16.
21. The claimant shall sign an acquittance in favour of the Order upon payment of the compensation.
O.C. 59-2012, s. 21.
DIVISION IV
TRANSITIONAL AND FINAL
22. This Regulation replaces the Regulation respecting trust accounting by notaries (chapter N-3, r. 5).
However the Regulation respecting trust accounting by notaries shall continue to govern claims filed against the fund before 1 March 2012.
O.C. 59-2012, s. 22.
23. The compensation fund contemplated in section 2 shall consist of the moneys and property already allocated for this purpose as at 1 March 2012.
O.C. 59-2012, s. 23.
24. (Omitted).
O.C. 59-2012, s. 24.
TRANSITIONAL
2020
(O.C. 171-2020) SECTION 17. The maximum compensation of $100,000 provided for in section 18 of this Regulation, as it read on 8 April 2020, remains applicable to any claim resulting from the use by a notary, before 9 April 2020, of funds or property for purposes other than those for which they were entrusted to the notary in the practice of his profession.
SECTION 18. Section 16 of this Regulation, as it read on 8 April 2020, remains applicable to any claim of more than $30,000 against the fund and for which the compensation fund committee made a recommendation to the executive committee before 9 April 2020.
REFERENCES
O.C. 59-2012, 2012 G.O. 2, 447
Décision OPQ 2017-141 (French only), 2017 G.O. 2, 5457
S.Q. 2018, c. 23, s. 811
171-2020, 2020 G.O. 2, 771O.C. 171-2020, 2020 G.O. 2, 771