2020 QCCQ 8316, 2020 QCCQ 8316

Kealey c. Caisse populaire Desjardins Gracefield 2020 QCCQ 8316 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF GATINEAU TOWN OF GATINEAU Civil Division No: 550-32-024294-180 DATE: December 11 th , 2020 ______________________________________________________________________ BY THE HONOURABLE STEVE GUÉNARD, J.C.Q. ______________________________________________________________________ ALBERT KEALEY Plaintiff v.

CAISSE POPULAIRE DESJARDINS GRACEFIELD and HYDRO-QUÉBEC and MAUREEN RICE Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Mr. Albert Kealey is, at all times relevant and since its inception in 2010, the President and Director of the Gatineau Valley Landowners Association. As per the evidence, such Association [1] is mainly comprised of senior citizens [2] . The Association normally holds two meetings every year with said members. [ 2 ] Such members pay a 50$ annual fee to the Association [3] .

Other revenues of the Association include the returns of 50/50 raffles. [ 3 ] As Mr. Kealey puts it: “It’s a low caliber group”. [ 4 ] On December 20 th , 2010, Mr. Kealey, as President, and his wife, Mrs. Cora Zorn, as acting Secretary-treasurer, open an account at the Kazabazua branch of the Defendant Caisse populaire Desjardins Gracefield (hereinafter the “ Caisse populaire ”). It appears that the Co-Defendant, Mrs.

Maureen Rice, is also designated as one of the three potential signatories for eventual withdrawals of monies deposited in the Account. [ 5 ] The evidence demonstrates that the Caisse populaire sends, from January 2011, and at all relevant times, its statements of account [4] to the attention of Mrs. Cora Zorn, at her common address with Mr. Kealey [5] . The statements of account also clearly, and specifically, refer to the Gatineau Valley Landowner’s Association. [ 6 ] It appears that the Co-Defendant, Mrs. Rice, is eventually sued by Hydro-Québec for outstanding bills north of 13 000$.

She is condemned, by default, by the Court of Québec, on January 30 th , 2015, to pay to Hydro-Québec an amount of 13 118,15$ with interests [6] , with the additional indemnity provided in

section 1619 of the Civil Code of Québec as well as with legal costs. [ 7 ] Hydro-Québec then serves its writ of garnishment in the hands of the Caisse populaire, for the amount then owed, more precisely 14 640,77$ [7] . [ 8 ] The Caisse populaire, on January 5 th 2016, produces its third-party Declaration to Hydro-Québec, in which it states that Mme Rice has a joint account and that the balance is 9 461,72$ [8] . [ 9 ] Hydro-Québec inscribes [9] for judgment based on such Declaration on January 21 st , 2016, and obtains, from the Court of Québec [10] , a judgment, dated February 9 th 2016, ordering to the Caisse populaire to pay the balance to Hydro-Québec.

[ 10 ] Such withdrawal, by the Caisse populaire, of the amount in the Account, is performed on April 13 th 2016 [11] . The full amount of 9 461,72$ is then withdrawn and sent, by the Caisse populaire, to Hydro-Québec. [ 11 ] Mr. Kealey learns of the withdrawal upon reception, by his wife Mrs. Zorn, of the April 2016’s monthly statement from the Caisse. [ 12 ] Mr. Kealey institutes a Claim, in the Civil division [12] of the Court of Québec, in October 2017. He basically submits the following:

i) The account opened in December 2010 was not a joint account; ii) Even if the account was a joint one, Mrs. Rice never had any ownership in regards to any part of the account. She was never a co- owner of the Account, nor was she an officer of the Association; iii) Mrs. Rice was only acting as a third signatory for the periods of time during which Mr. Kealey and Mrs. Zorn were outside of the country, in Florida more particularly, during the winter months; iv) The monies deposited in the account were exclusively those of the Association;

v) The fact that the Account was used exclusively for the Association was made very clear to the Caisse populaire’s representatives in 2010, as it appears from the various statements of account sent afterwards which specifically referred to the Association; vi) Moreover, the Caisse populaire was specifically informed, at the opening of the Account, in 2010, that “ those monies did not belong to anybody else ” [13] ; vii) He was never informed, in due time, by the Caisse populaire, of the garnishment performed by Hydro-Québec. Indeed, he only learned, on January 15 th 2016, through Mrs.

Julie Walker, who was a member of the association, that the “account had been frozen”; viii) He tried to obtain more information from the Caisse populaire, and more precisely from its then acting General Manager, but to no avail; ix) He learned, in late April 2016, from the statement of account of the Caisse populaire, that the full balance of the Account had been withdrawn; [ 13 ] The Trial proceeded, originally, on May 14 th 2019. At such time, both the Caisse populaire and Mrs. Rice were absent.

They were both condemned by default by Justice Serge Laurin, J.C.Q. [ 14 ] Justice Laurin rejected the Claim against Hydro-Québec, whose representative was present and offered its defence. [ 15 ] Mrs. Rice did not present any motion for revocation of that judgment. But the Caisse populaire did. On November 23 rd 2020, such motion was granted by the Court and Mr. Kealey and the Caisse populaire, now represented by its new general manager [14] , Mr. Khaled Ouabdesselam, proceeded to the Trial. [ 16 ] Mr.

Ouabdesselam states that the Caisse populaire’s liability cannot be established because it acted, in good faith, respecting, as per its Declaration of a seized third party, the strict delays established in the then applicable Code of civil procedure [15] . It then respected the Order of the Court of Québec and permitted the withdrawal of the balance of the Account. Mr. Ouabdesselam furthermore adds that the Caisse had the obligation to declare the existence of that joint account in the name of Mrs. Rice. [ 17 ] The Court must consequently determine if the Caisse populaire is liable towards Mr.

Kealey of the amount claimed. ANALYSIS [ 18 ] Mr. Kealey’s claim is of a civil nature. Consequently, the burden to demonstrate the validity of such claim, through preponderant evidence, rested upon his shoulders, as per sections 2803 and 2804 of the Civil Code of Québec (hereinafter referred to as the CCQ ). [ 19 ] The potential liability of the Caisse populaire, if any, is certainly of a contractual nature [16] , as per

section 1458 CCQ, which enunciates the following: 1458. 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. [ 20 ] Indeed, a financial institution’s liability can be established if it is demonstrated that it did not act in a reasonably prudent and vigilant manner [17] . [ 21 ] It is not contested that the Caisse populaire had the obligation to act, not only towards Hydro-Québec, but also towards Mr.

Kealey, in a reasonably prudent and diligent manner. [ 22 ] The fact that the Association was not “registered” on the Québec business registry does not modulate such obligation. Indeed, the preponderant, and very clear evidence, does demonstrate – through Mr. Kealey’s testimony – that he made it very clear to the Caisse

populaire’s representatives, in December 2010, that the Account was opened for the purposes of such Association. [ 23 ] Exhibit D-3, produced at Trial by the Caisse populaire, does, indeed, demonstrate that Mr. Kealey and Mrs. Zorn – who were, as it appears from the evidence, incidentally, the only two signing parties on the Application, did inform the Caisse of the existence of the Association and of the purpose of the Account. [ 24 ] Furthermore, in such exhibit D-3, which is the “Membership application”, Mr. Kealey and Mrs.

Zorn ticked the “YES” column to the following question: Are you opening this account on the request of and/or for the use of a third party individual or business? [ 25 ] Such “YES” answer is followed by a disclaimer which states: Note: If the member acknowledges that they are acting on behalf of a third party individual or business, you must fill out the “Third party Statement (Individual/Business)” form (CF-00100- 969A) and attach it to the “Membership application – individuals” form in the member’s file. [ 26 ] Mr. Ouabdesselam confirms that such Statement is, indeed, in the Caisse populaire’s main file.

It is also dated, as per Mr. Ouabdesselam’s confirmation, December 20 th , 2010. It specifically refers to the Association. [ 27 ] Consequently, the evidence clearly establishes that the account was opened for the purpose of depositing monies obtained for the Association. All the subsequent statements of account do confirm such understanding. [ 28 ] But there is quite more. [ 29 ] The Caisse populaire, in its Third party Declaration, following the writ of garnishment, simply states that Mrs.

Rice specifically detains a joint account. [ 30 ] When asked how did the Caisse populaire conclude in such fashion, in January 2016, Mr. Ouabdesselam, who was not the General manager of the Caisse populaire at that time, states that the employee, located in Rouyn-Noranda, who prepared the Third party Declaration, probably simply used the computerized information regarding the Account. [ 31 ] Such computerized information is produced by the Caisse populaire as exhibit D-2. It shows that the Account refers to three owners, Mr. Kealey, Mrs. Zorn, and Mrs. Rice.

That document is not signed. [ 32 ] Based on the preponderant evidence adduced at Trial, such information appears, in all probability, to be erroneous. [ 33 ] It appears to be erroneous because of Mr. Kealey’s clear testimony on such topic: Mrs. Rice was never a co-owner of such an account. She would act as a third signatory, when need arose because of his absence from the country. [ 34 ] The documentary evidence produced at Trial also tends, indeed, to support, such assertion. The Membership application only refers to Mr. Kealey and Mrs.

Zorn. [ 35 ] Surely enough, such Application refers to a “Joint folio”, but it also states that all the transaction at the Caisse will be carried out under the joint signature of the undersigned members . [ 36 ] Again, Mrs. Rice’s name does not appear from that document [18] . Her signature is nowhere to be found in the evidence adduced at Trial. Surely enough, her name only appears from an excerpt in the computerized,

summary version, of the folio. Again, the evidence tends to suggest that this document falsely resumed the information in the file. [ 37 ] Consequently, the evidence does demonstrate that the Caisse populaire could not state, in its Third party declaration, that Mrs. Rice was the co-owner of a joint account with the Caisse populaire. [ 38 ] But let’s assume that the Caisse populaire acted diligently in, at least, informing, Hydro- Québec of the existence of that Account in which Mrs.

Rice had the authority, with one other signatory, to proceed to withdrawals. [ 39 ] In such eventuality, it is very difficult to understand why the Caisse populaire would not inform, diligently and in due time, Mr. Kealey and/or Mrs. Zorn, of the existence of the garnishment. After all, following the Caisse populaire’s logic, Mr. Kealey and Mrs. Zorn were also co-owners of that “joint account”.

[40] Justice Michel Lassonde, J.C.Q., in Poulin v. Bouchard[19], reminds the following: 1.3 L'extrait suivant du volume de Droit bancaire de L'Heureux et Fortin ([1]) illustre bienles principes juridiques qui s'appliquent à ce type de compte: "Un compte peut être ouvert au nom de deux ou de plusieurs personnes conjointement. Ondistingue deux catégories de compte conjoint. Celui que l'on peut appeler le compte conjointsimple donne instruction à la banque d'honorer les chèques signés par les codéposantsconjointement.

Dans ce cas, la banque ne peut remettre les fonds, sinon sur un ordre de paiementsigné par tous les codéposants ([2]). L'autre, que l'on peut désigner sous le nom de compteconjoint solidaire, donne instruction à la banque d'honorer les chèques tirés par l'un ou parl'autre des codéposants. Il y a alors mandat accordé par un des déposants à son codéposant designer les chèques et de faire les retraits. Dans ce cas, un chèque signé par un des codéposants oupar une majorité de codéposants, s'il y en a plusieurs, constitue une quittance valable en faveur dela banque relativement au remboursement des fonds déposés.

À l'égard des deux catégories decomptes, on applique les règles de la solidarité: chaque cotitulaire se comporte comme undéposant à part entière et contracte envers la banque une obligation solidaire de telle sorte que sile solde du compte se trouve à découvert, la banque peut recouvrer la totalité du solde de l'un oul'autres des titulaires du compte (art. 1525, 1528, 1541 C.C.Q.)." 1.4 Qu'en est-il maintenant du droit des tiers de saisir un compte conjoint pour une dettedue par l'un des codéposants ?

Les auteurs L'Heureux et Fortin ([3]) répondent de la façon suivante à cette question: "De même, ce compte ne peut être l'objet d'une saisie-arrêt pour la dette de l'un des codéposants àmoins qu'il ne soit prouvé que les fonds dans le compte sont uniquement la propriété du débiteursaisi ([4]). Il en serait de même pour le compte conjoint solidaire, car la propriété du comptedemeure conjointe, malgré le mandat de signer les chèques accordés à chaque déposant." Le Tribunal partage cette façon de voir les choses. Elle est de plus conforme à la jurisprudencetant civiliste que de common law.

Une décision de la cour d'appel d'Ontario ([5]) illustre bien la position de la jurisprudence à ceteffet: "We come now to the real point of the case, i.e., who is entitled to the money in the bank? We firstconsider the original deposit and the reason for it. There are many cases in our own Courts ofdeposit by the husband of his money in the bank in the names of himself and his wife, in which theright to the money after the death of the husband is considered; most of these will be found citedand partly quoted in 5 C.E.D. (Ont.) 653-4, under the heading "Joint Tenancy".

I do not think itnecessary to quote from them, the result of them all being that the main question is, whether thedocument was intended to embody the rights of the husband and wife as between themselves orwas a memorandum defining the rights and duties of the bank: Re Hodgson (1921), (ON SC), 67 D.L.R. 252, at p. 255, 50 O.L.R. 531. … This shows that the transaction was not intended to be a provision for the wife, but simply a modeof conveniently managing the husband's affairs, and consequently the money was left hisproperty: Southby v.

Southby (1917), (ON CA), 38 D.L.R. 700, at p. 705, 40O.L.R. 429; Lush on Husband and Wife, 3rd ed., p. 211. In that case the provision that the wifemight draw after the death of the husband is not a valid disposition of the remaining money, as itwould violate the Wills Act (now R.S.O. 1927, c. 149). The result is that the original deposit was the husband's money." [41] In other words, even presuming of the joint nature – even with Mrs.

Rice – of theAccount, the Caisse populaire had to make some verifications as to the true ownership[20] of saidmonies. [42] Obviously, in the current instance, those verifications were minimal, if not non-existent. [43] Indeed, it appears from the evidence that Mr. Kealey is not informed, in due time, of the existence of the garnishment, nor of the Third party declaration prepared and sent, on January 5th 2016, by the Caisse populaire. [44] Mr. Kealey learns about the “frozen account” on January 15th 2016, through Mrs.

JulieWalker, who is now helping the Association with the deposits of the member’s annual fees. [45] Mr. Kealey clearly testifies to the effect that he contacts, without any delay, the thenGeneral manager of the Caisse populaire, only to be informed, by him, that he cannot get anyinformation as to the reasons behind the frozen account. “At first, he refused to speak to me, thenhe told me that he was not allowed to tell me anything. He was not at liberty to say”.

[ 46 ] Mr. Kealey is consequently more than surprised, when he reads the April 2016 statement of account which stipulates the complete withdrawal of the balance then present in the Account. [ 47 ] The Court was able to appreciate Mr. Ouabdesselam’s honest and transparent testimony. He does confirm that the Caisse populaire did have, at that time, the obligation to inform the other “co-owners” of such a joint account, of the garnishment, in order to permit to them to react, to oppose it, le cas échéant, and so on and so forth. [ 48 ] Mr.

Ouabdesselam does also confirm that the “Procedure” now used at the Caisse populaire specifically stipulates that such co-owners must be warned of such third party garnishment, for those very reasons. [ 49 ] More precisely, Mr. Ouadbesselam establishes that the normal Procedure is for the Caisse populaire, once it receives such a writ of garnishment, to specifically inform the other co- owners of a joint account, of the situation [21] .

Then, the information is transmitted to the centralised services of the Caisse – more precisely in Rouyn-Noranda – and then such employee produces the necessary third party Declaration in due time. [ 50 ] Obviously, this procedure, which the Court considers to be prudent and reasonable, was not respected in the current instance [22] . At the very least, the evidence does not demonstrate that it was in any way followed. [ 51 ] Indeed, there is no evidence of any written notice sent to Mr. Kealey informing him, in due time, of the existence of the garnishment. [ 52 ] Mr.

Ouabdesselam also confirms to the Court that he did not find, in the main file, any notes from the former General manager stating that he had informed, verbally, Mr. Kealey, of the situation. Moreover, said former General manager is not assigned, by the Caisse populaire, to testify at Trial. [ 53 ] Consequently, the preponderant evidence does demonstrate that the former General Manager’s response to Mr.

Kealey’s questions as to why the Account had been frozen was simply to tell him that he could not give him any information. [ 54 ] Respectfully, the Court considers that the Caisse populaire did commit a fault by acting in such way. Mr. Kealey was certainly entitled to be informed of the garnishment and on the follow- up done by the Caisse. [ 55 ] The Court has no doubt that the Caisse populaire acted in good faith. But its liability can be established nevertheless. [ 56 ] The declaration of the Caisse, on January 5 th 2016, is already “in the books” for a period of 10 days when Mr.

Kealey communicates with the former General manager on January 15 th 2016. With regards, there does not seem to be any reasonable justification as to the Caisse populaire’s lack of answer at that time. [ 57 ] Indeed, the answer “I’m not at liberty to tell you anything”, or something to that effect, could not qualify as a reasonable answer to Mr. Kealey’s inquisition as to what was happening. [ 58 ] Not having received that information from the Caisse populaire, Mr. Kealey was, as the evidence showed clearly, not able to react accordingly, in due time. [ 59 ] The fact that Mr.

Kealey eventually got more information – directly from Mrs. Rice – does not, respectfully, modulate the existence of the Caisse populaire’s fault in the current instance. [ 60 ] The fact that the Caisse populaire then proceeded to respect the Judgment rendered, ordering to withdraw the balance in the Account, is not of any help, in the current instance, to the Caisse. [ 61 ] Indeed, the Caisse populaire had already commited a fault, and such fault has a direct link [23] with the prejudice suffered by Mr.

Kealey and the Association. [ 62 ] The Court does not consider that such direct link was broken by the conduct of Mrs. Rice, nor from Mr. Kealey to that effect. [ 63 ] The Court is convinced that Mr. Kealey, even residing at that time in Florida, would have reacted very differently if he was told, by the Caisse populaire, of the existence of the garnishment, from Hydro-Québec, for such an important amount. [ 64 ] Consequently, the Caisse populaire will be condemned to pay the amount of 9 461,72$, as per the Demand. AS TO THE SOLIDARITY BETWEEN MRS. RICE AND THE CAISSE POPULAIRE

[ 65 ] During the first Trial, Justice Laurin condemned, by default, the Caisse populaire and Mrs. Rice, jointly , in conformity with the Demand, to pay to Mr. Kealey the said amount of 9 461,72$. [ 66 ] In the current instance, Mr. Kealey asks the Court to condemn the Caisse populaire, solidarily with Mrs. Rice , of the amount claimed. [ 67 ] The Court has authorized the modification, as per

section 208 of the Code of civil procedure , during the hearing, thus noting that such demand would be decided in the Court’s judgment. [ 68 ] To be clear: the Caisse populaire is hereby condemned to pay an amount of 9 461,72$ to Mr. Kealey. However, the Court cannot condemn Mrs. Rice to pay solidarily that amount and such, for two simple reasons. [ 69 ] Firstly, Mrs. Rice did not ask for the revocation of the judgment. The Court hereby cannot modify the final judgment rendered against her by Justice Laurin. [ 70 ] Secondly, Mrs. Rice was condemned, as per the then applicable Demand, jointly with the Caisse.

In regards to Mrs. Rice, such joint condemnation has to remain unmodified. [ 71 ] Consequently, the Court cannot hereby modify that Conclusion and condemn Mrs. Rice to the amount in solidarity with the Caisse populaire. FOR THOSE REASONS, THE COURT: GRANTS the Plaintiff’s Demand against the Caisse populaire Desjardins Gracefield; CONDEMNS the Caisse populaire Desjardins Gracefield to pay to the Plaintiff an amount of 9 461,72$, with interests at the legal rate as well as the additional indemnity provided in

section 1619 of the Civil Code of Québec , to accrue from November 9 th 2017 [24] ; THE WHOLE, with the legal costs in favour of the Plaintiff [25] . __________________________________ STEVE GUÉNARD, J.C.Q. Date of hearing: November 23rd, 2020