r-2.2.0.0.3 - Act to ensure mainly the recovery of amounts improperly paid as a result of fraud or fraudulent tactics in connection with public contracts

Updated to 15 December 2017

This document has official status.

chapter R-2.2.0.0.3

Act to ensure mainly the recovery of amounts improperly paid as a result of fraud or fraudulent tactics in connection with public contracts

CHAPTER I PURPOSE AND DEFINITIONS

1. This Act provides for exceptional measures for the reimbursement and recovery of amounts improperly paid as a result of fraud or fraudulent tactics in the course of the tendering, awarding or management of public contracts.

2015, c. 6, s. 1.

2. For the purposes of this Act,

(a)  “public contract” means a contract between a public body and an enterprise;

(b)  “enterprise” means a legal person established for a private interest, a general, limited or undeclared partnership, an association or a natural person who operates a sole proprietorship;

(c)  “public body” means a body described in section 4, 7 or 7.1 of the Act respecting contracting by public bodies (chapter C-65.1) as well as a municipal body within the meaning of section 5 of the Act respecting Access to documents held by public bodies and the Protection of personal information (chapter A-2.1).

2015, c. 6, s. 2.

CHAPTER II REIMBURSEMENT PROGRAM

3. The Minister publishes in the Gazette officielle du Québec a voluntary, fixed-term reimbursement program to make it possible for an enterprise or a natural person mentioned in section 10 to reimburse certain amounts improperly paid in the course of the tendering, awarding or management of a public contract in relation to which there may have been fraud or fraudulent tactics.

2015, c. 6, s. 3.

4. The reimbursement program the Minister intends to establish must be published as a draft program in the Gazette officielle du Québec, together with a notice stating the period that must elapse before the program may be established and during which an interested person may send comments to the person specified in the notice.

2015, c. 6, s. 4.

5. Within the scope of the reimbursement program, the Minister acts on behalf of a public body. For that purpose, the Minister may transact and validly grant a discharge regarding the contracts concerned.

A public body may, however, in the cases, on the conditions and in the manner determined by the Minister, intervene within the scope of the program, in particular by participating in a vote of all the public bodies covered by a settlement proposal made by an enterprise or natural person mentioned in section 10.

2015, c. 6, s. 5.

6. The Government designates a person to act as program director. The person must exercise the functions of office in an impartial manner.

One of the director’s duties is to attempt to bring the Minister and an enterprise or natural person mentioned in section 10 to an agreement.

For that purpose, the director must inform them of the scope of sections 7 and 8 and make recommendations to the Minister with regard to any reimbursement proposals received.

2015, c. 6, s. 6.

7. Anything said or written within the framework of the program is confidential and may not be admitted in evidence unless the Minister and the enterprise or natural person mentioned in section 10 agree otherwise.

2015, c. 6, s. 7.

8. The program director, the Minister and the enterprise or natural person mentioned in section 10 cannot be compelled to disclose anything they hear or learn within the framework of the program. Nor can they be compelled to produce a document prepared or obtained within that framework before a court of justice, before a person or body of the administrative branch exercising adjudicative functions or before any other person or body having the power to summon witnesses, gather evidence and require the production of documents.

Despite section 9 of the Act respecting Access to documents held by public bodies and the Protection of personal information (chapter A-2.1), no person may have access to such a document.

2015, c. 6, s. 8.

9. The program director cannot be prosecuted for acts performed in good faith in the exercise of the functions of office.

2015, c. 6, s. 9.

CHAPTER III SPECIAL RULES APPLICABLE TO JUDICIAL PROCEEDINGS

10. Any enterprise or natural person who has, in any capacity, participated in fraud or fraudulent tactics in the course of the tendering, awarding or management of a public contract is presumed to have caused injury to the public body concerned.

In such a case, the officers of the enterprise in office at the time the fraud or fraudulent tactics occurred are held liable unless they prove that they acted with the care, diligence and skill that a prudent person would have exercised in similar circumstances.

The directors of the enterprise in office at the time the fraud or fraudulent tactics occurred are also held liable if it is established that they knew or ought to have known that fraud or fraudulent tactics were committed in relation to the contract concerned, unless they prove that they acted with the care, diligence and skill that a prudent person would have exercised in similar circumstances.

The enterprises and natural persons referred to in this section are solidarily liable for the injury caused, unless such liability is waived by the public body.

2015, c. 6, s. 10.

11. The injury is presumed to correspond to the amount claimed by the public body concerned for the contract concerned if the amount does not exceed 20% of the total amount paid for that contract.

The public body may, subject to providing proof, claim an amount greater than that determined under the first paragraph.

Any amount granted by the court under this section bears interest from the date the work is accepted by the public body concerned for the contract concerned, at the rate determined under section 28 of the Tax Administration Act (chapter A-6.002).

2015, c. 6, s. 11.

12. The Minister may, on behalf of a public body, bring an action against an enterprise or natural person referred to in section 10 after informing the public body of its intention and giving the public body reasonable time to bring an action itself.

In such a case, the Minister may transact on an amount the Minister claims under the first paragraph and validly grant a discharge regarding the contracts concerned.

2015, c. 6, s. 12.

13. The public body’s claim in an action brought under this chapter confers on the public body a legal hypothec which may, on authorization, be registered on the property of any enterprise or natural person referred to in section 10.

The application for authorization is made to a judge in chambers. In urgent cases, it may be made without notice to the adverse party. If the authorization is granted, it must be served without delay on the enterprise or the natural person concerned.

The judge grants the authorization if the body’s claim appears to be well-founded and if there is reason to fear that recovery of the claim might be jeopardized without such authorization.

2015, c. 6, s. 13.

14. A court that allows an action to be brought under this chapter must add a lump sum equal to 20% of any amount granted for injury, to cover expenses incurred for the purposes of this Act. The amount bears interest from the time the action is brought.

2015, c. 6, s. 14.

15. An application addressed to a court or to a judge in chambers under this chapter is heard and decided by preference.

2015, c. 6, s. 15.

16. An action to repair injury caused after 15 December 1997 to a public body by fraud or fraudulent tactics in the course of the tendering, awarding or management of a public contract may not, if in progress on 15 December 2017 or instituted within five years after that date, be dismissed on the grounds that the right is prescribed.

Any such actions dismissed on those grounds before 15 December 2017 may be instituted again within five years after that date.

In addition, during a proceeding, no measure necessary or useful to preserve the public body’s rights, including an unenforceability action, may be dismissed on the grounds that the right is prescribed or extinguished.

In such cases, this Act has the retroactive effect necessary to ensure its application.

2015, c. 6, s. 16.

17. A court of justice has exclusive jurisdiction to hear applications brought under this chapter. However, persons or bodies exercising adjudicative functions retain their authority with respect to any such application made by a public body exclusively against one of its employees. In such a case, this Act applies with the necessary modifications.

2015, c. 6, s. 17.

CHAPTER IV MISCELLANEOUS PROVISIONS

18. This Act is public policy.

2015, c. 6, s. 18.

19. The Minister must, within six months after the end of the reimbursement program described in Chapter II, report to the Government on the implementation of the program. The report must include the names of the enterprises or natural persons mentioned in section 10 who participated in the program, the names of the public bodies involved, and the total amount reimbursed.

The report is tabled within the next 30 days in the National Assembly or, if the Assembly is not sitting, within 30 days of resumption.

2015, c. 6, s. 19.

20. The Government may determine rules for the apportionment between the Minister and a public body of any amount recovered under Chapter II and section 12, in proportion to the amounts paid by the public body for a particular contract.

2015, c. 6, s. 20.

21. A public body is required to cooperate with the Minister in achieving the purpose of this Act. To that end, it must, in particular, provide any document or information requested by the Minister in relation to a public contract.

2015, c. 6, s. 21.

22. No recourse in warranty or recursory action may be brought against an enterprise or natural person mentioned in section 10 who has been granted a discharge for a claim arising from a contract described in section 3.

2015, c. 6, s. 22.

23. Despite any inconsistent provision of an Act, any value accrued or any benefit paid or granted to an employee of a public body or to an elected officer under a pension plan is seizable for the execution of a final judgment in an action brought under Chapter III, in the cases, on the conditions and in the manner determined by government regulation.

2015, c. 6, s. 23.

24. The Government may, by regulation, take any measure necessary or useful for carrying out this Act and fully achieving its purpose.

2015, c. 6, s. 24.

CHAPTER V PUBLIC CONTRACTS FUND

25. The Public Contracts Fund is established at the Ministère de la Justice.

The Fund is dedicated to financing activities carried out by the Minister for the purposes of this Act.

2015, c. 6, s. 25.

26. The following are credited to the Fund:

(1)  the amounts paid to the Minister under this Act;

(2)  the amounts transferred to it by a minister out of the appropriations granted for that purpose by Parliament;

(3)  the amounts transferred to it by the Minister of Finance under sections 53 and 54 of the Financial Administration Act (chapter A-6.001);

(4)  the gifts, legacies and other contributions paid into it to further the achievement of its purpose; and

(5)  the revenue generated by the amounts credited to it.

2015, c. 6, s. 26.

27. The amounts required to pay any expense, including the expenses incurred by the Minister for the purposes of this Act, and any cost related to an investment, and that are necessary to achieve the purpose to which the Fund is dedicated are debited from the Fund.

2015, c. 6, s. 27.

28. Any surplus accumulated by the Fund is transferred to the general fund on the dates and to the extent determined by the Government.

2015, c. 6, s. 28.

CHAPTER VI AMENDING PROVISIONS

BUILDING ACT

29. (Amendment integrated into c. B-1.1, ss. 65.1.0.1-65.1.0.2).

2015, c. 6, s. 29.

ACT RESPECTING CONTRACTING BY PUBLIC BODIES

30. (Amendment integrated into c. C-65.1, s. 21.2.0.1).

2015, c. 6, s. 30.

31. (Amendment integrated into c. C-65.1, s. 21.26).

2015, c. 6, s. 31.

32. (Amendment integrated into c. C-65.1, s. 21.28).

2015, c. 6, s. 32.

33. (Amendment integrated into c. C-65.1, s. 58.2).

2015, c. 6, s. 33.

34. (Amendment integrated into c. C-65.1, Schedule I).

2015, c. 6, s. 34.

ACT RESPECTING ELECTIONS AND REFERENDUMS IN MUNICIPALITIES

35. (Omitted).

2015, c. 6, s. 35.

36. (Amendment integrated into c. E-2.2, s. 648.1).

2015, c. 6, s. 36.

ACT RESPECTING SCHOOL ELECTIONS

37. (Omitted).

2015, c. 6, s. 37.

38. (Amendment integrated into c. E-2.3, s. 223.5).

2015, c. 6, s. 38.

ELECTION ACT

39. (Omitted).

2015, c. 6, s. 39.

40. (Amendment integrated into c. E-3.3, s. 569.1).

2015, c. 6, s. 40.

CHAPTER VII TRANSITIONAL PROVISIONS

41. The expenditure and investment estimates for the Public Contracts Fund, set out in Schedule I, are approved for the 2014-2015 fiscal year.

2015, c. 6, s. 41.

42. Out of the amounts credited to the general fund, the Minister may transfer to the Public Contracts Fund the required appropriations allocated by Parliament for Program 2, “Administration of Justice”, of the “Justice” portfolio in the Expenditure Budget for the 2014-2015 fiscal year.

2015, c. 6, s. 42.

43. Expenditures and investments made after 31 March 2014 by the Minister out of the appropriations allocated by Parliament and corresponding, on the date they were made, to the type of expenditures and costs that may be debited from the Public Contracts Fund are debited from the Fund.

2015, c. 6, s. 43.

44. A proceeding, pending before a civil court on 1 April 2015, to repair injury caused to a public body by fraud or fraudulent tactics in the course of the tendering, awarding or management of a public contract may, on a party’s application, be stayed.

The application to stay the proceeding is made to a judge in chambers, who grants the stay if the enterprise or natural person mentioned in section 10 undertakes to participate in the reimbursement program described in Chapter II or if the public body states that it intends to continue the matter under the rules set out in Chapter III when they come into force.

2015, c. 6, s. 44.

45. From 1 April 2015 to the end date of the program described in Chapter II, a public body must obtain the Minister’s authorization to institute an action to repair injury caused to it by fraud or fraudulent tactics in the course of the tendering, awarding or management of a public contract. The Minister grants the authorization if of the opinion that it does not hinder the achievement of the objectives of the reimbursement program.

2015, c. 6, s. 45.

46. From 1 April 2015 to the end date of the program described in Chapter II, a public body may not, without the Minister’s authorization, transact on an amount improperly paid as a result of fraud or fraudulent tactics in the course of the tendering, awarding or management of a public contract. In the absence of an authorization from the Minister, such a transaction is null.

2015, c. 6, s. 46.

47. Persons and partnerships who are contractors within the meaning of section 1 of the Act respecting contracting by public bodies (chapter C-65.1) and are entered in the register kept by the Chief Electoral Officer with respect to persons and partnerships referred to in the first and second paragraphs of section 641.2 of the Act respecting elections and referendums in municipalities (chapter E-2.2), of section 221.1.2 of the Act respecting school elections (chapter E-2.3) or of section 564.3 of the Election Act (chapter E-3.3) are, despite any provision to the contrary and for the remaining period of ineligibility applicable under those Acts, named in the register of enterprises ineligible for public contracts established under section 21.6 of the Act respecting contracting by public bodies.

For the purposes of the first paragraph, the Chair of the Conseil du trésor enters in the register of enterprises ineligible for public contracts for each person and partnership concerned the relevant information from among that required under the first paragraph of section 641.4 of the Act respecting elections and referendums in municipalities, of section 221.1.4 of the Act respecting school elections or of section 564.5 of the Election Act, as applicable.

2015, c. 6, s. 47.

CHAPTER VIII FINAL PROVISIONS

48. The Minister of Justice is responsible for the administration of this Act, except Chapter VI.

2015, c. 6, s. 48.

49. This Act, except Chapters V and VI, ceases to have effect on 15 December 2022, except with regard to any action brought prior to that date. Chapter V ceases to have effect on the date to be set by the Government.

2015, c. 6, s. 49 (part).

SCHEDULE I

(Section 41)

PUBLIC CONTRACTS FUND

2014-2015 EXPENDITURE AND INVESTMENT ESTIMATES

(in thousands of dollars)

Revenues

Expenditures 72.4

Surplus or deficit for the fiscal year (72.4)

=====

Balance of loans or advances (72.4)

2015, c. 6, Schedule I.