PRINCIPLE OF JOINT AND SEVERAL DEBTS AND REVIEW
The principle of joint and several means that, in review matters, EACH co-debtor may:
- contest the decision;
- present a personal defence;
- present a joint defence with the other co-debtor. In this case, one co-debtor represents the other.
Consequently, if one co-debtor appeals the interest charges or to have recovery measures stopped, the other one benefits.
The processing of an application for review or appeal differs depending on the type of defence used. When preparing a file, the reviewing officer or Appeal Committee must ask the person filing the application what kind of defence he or she intends to use. If the applicant does not present a personal defence, the other co-debtor is contacted in order to:
- inform him or her that an application for review has been filed;
- ask whether he or she will be party to the application;
- determine the arguments that he or she intends to raise, where applicable.
JOINT DEFENCE
This involves issues that affect all debtors in the case of a review of joint and several debts, such as the merits of a claim, the amount of a debt and the enforceability of a claim because of the prescription period.
When one of these points is contested, the application for review filed by one of the parties is considered a JOINT APPLICATION.
Both parties are given notice to attend and are heard at the same time.
In this way, each of the co-debtors can present his or her own observations and contradictory decisions are avoided.
PERSONAL DEFENCE
A defence is purely personal when it concerns a legal situation that is specific to one of the co-debtors and only that person can benefit from it.
For example, the following situations give rise to the most common purely personal defences:
- the grounds set out in the Act for excluding a debtor from joint and several liability (the spouse of the person who was granted the benefits did not receive the notice of claim, one of the co‑debtors was unaware of the actions or failure to act on the part of his or her spouse that led to the claim, one of the co-debtors was unable to declare his or her real situation because of domestic violence);
- an express discharge given to one of the co-debtors;
- a discharge in a case of personal bankruptcy.
The principle of mutual representation of co-debtors does not apply in the case of a personal defence. A debtor cannot oppose with the creditor a purely personal defence by the other co-debtor under section 1530 of the Civil Code of Quebec.
In this case, the reviewing officer conducts the review without informing the other co-debtor.
The review decision is also sent only to the person who presented the personal defence.
However, in order to avoid holding several interviews, if the co-debtor who presented a personal defence agrees to make his or her observations at the same time as the other party, the reviewing officer may process their files as if a joint application had been made when the same reasons are given by both parties.
Cases involving allegations of violence on the part of one spouse by the other however require specific treatment. It is important that the application for review not generate a new episode of violence likely to endanger the applicant or his or her dependent children.
Note that if the other spouse has already filed an application for review to contest a claim by presenting a joint defence, the reviewing officer first reviews these reasons before analyzing the personal reasons, including domestic violence.
PROCESSING OF CASES INVOLVING DOMESTIC VIOLENCE
As soon as a co-debtor gives domestic violence as a reason for being excluded from joint and several liability, the reviewing officer informs him or her:
- that the review will be done without the violent spouse being present;
- that the other spouse will be solely responsible for the debt if the application is allowed regarding the inability to declare the real situation.
If the applicant continues the process, the reviewing officer initially verifies the eligibility of the application for review when submitted after the deadline. Note that proof of exhaustion in response to violence suffered may be accepted as a reason for an inability to act.
If the application is admissible, the reviewing officer first ensures that the person who is alleging the violence fits the definition of spouse. The evidence collected may lead the reviewing officer to decide that there was no mutual assistance because of the behaviour of the violent spouse or that no real co‑habiting took place because it was imposed by means of threats or force.
Once it has been established that the person meets the definition of spouse, the reviewing officer decides whether the applicant had knowledge of the situation that led to the claim. In some cases, the control exercised by a violent spouse may explain why a person would not know.
When the applicant knew the real situation, but maintains that he or she was prevented from declaring it because of violence on the part of the spouse, the reviewing officer verifies the date the debt was established.
Notice of the review decision is sent only to the co-debtor who alleged the violence unless the decision cancels the entire debt because the two were not living as spouses.
CONTESTING EXCLUSION FROM JOINT AND SEVERAL LIABILITY
An application to contest an exclusion from joint and several liability at the review stage cannot be admissible because a decision on this point has already been made at the review stage, it cannot be reconsidered again, and only the spouse who presented a purely personal defence may revive it.