While the practice of backdating documents is not in and of itself improper, severe consequences can stem improperly backdating documents. It is common for parties to come to oral agreements, letter agreements, memorandums of understanding and the like, effective on a certain date, with formal legal documentation to be executed at some future date. Backdating documents for the purpose of misleading a third party is what must be avoided. A textbook example of backdating documents for the purpose of misleading a third party can be found in the case of Re Rovet1 .
On January 23, 1992, Ernest Rovet was suspended from practicing law for a period of twelve months by the Law Society of Upper Canada. The suspension was for making false representations to the Canada Labour Relations Board, the preparation of false documents in order to support those false representations and charging personal expenses as fees without the knowledge of his client or his partners. The focus of this article is on Mr. Rovet’s preparation of false documents.
The pertinent facts are as follows:
- A group, referred to only as “A Company” in the written decision of the Law Society of Upper Canada, engaged the services of Mr. Rovet to help them navigate a pending union application by its employees.
- A Company was interested in avoiding the unionization of its workforce.
- A suggested tactic to impede the unionization was for A Company to hire additional workers that would side with A Company on the issue of unionization.
- The additional workers were to be provided by a company referred to as “D Company” in the decision of the Law Society.
- Prior to the finalization of the contract(s) between A Company and D Company, A Company’s workforce filed its application for union certification.
- The effect of the filing was to settle the bargaining unit for the purpose of determining support for the union. In other words, employees hired after the application would not be able to participate in the unionization process.
- The suggested solution was to backdate the contract(s) such that the newly hired workers would form part of the bargaining unit.
Miller Thomson Analysis
No matter how appealing it may be in certain circumstances to list ony the effective date of a contract or other legal document, the best practice in documenting bona fide legal relations is to ensure that the date of execution is set out in the document along with its effective date. This will help avoid the argument that the document was misleading and/or drafted for the purpose of misleading. Inserting the date the document was signed in the case of Re Rovet would have been incompatible with the plans of Mr. Rovet and A Company, since the purpose of the backdating was done to mislead the Canada Labour Relations Board. However, had the date of execution appeared in the document(s) prepared by Mr. Rovet, he may have avoided sanction from the Law Society for his preparation of false documents.
Mr. Rovet was reported to the Law Society by a lawyer who acted for A Company subsequent to Mr. Rovet. Convocation ordered a twelve month suspension for Mr. Rovet for these and other actions, commencing January 23, 1992. Coincidentally, the Discipline Committee’s submission to Convocation was that Mr. Rovet be suspended for six months, backdated to June 1991.