2011 QCCQ 7726, 2011 QCCQ 7726

Michael Publishing Company Inc. c. 6183310 Canada inc. 2011 QCCQ 7726 COURT OF QUEBEC (Civil Division) CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL No: 500-22-167721-102 DATE: July 12, 2011 ______________________________________________________________________ BY THE HONOURABLE DIANE QUENNEVILLE, J.C.Q. ______________________________________________________________________ MICHAEL PUBLISHING COMPANY INC.

Plaintiff v. 6183310 CANADA INC. and LORNE SCHACTER Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff claims the balance owing of $7,012.60, representing the adds published in The Suburban , a newspaper published by the Plaintiff, plus $ 1,753.15 as liquidated damages. [ 2 ] The corporate Defendant, 6183310 Canada Inc. (" CANADA ") is not represented by an attorney and did not contest the Plaintiff's action. [ 3 ] The Defendant Lorne Schacter contests Plaintiff's claim stating that he is not personally liable for the amount claimed.

THE FACTS [ 4 ] On July 30 and 31 st , 2009, Defendant Schacter asked that adds be placed on different dates in August and September 2009 in The Suburban advertising the sale of Slimming coffee for Gateway International. [ 5 ] At that time, Defendant Schacter signed two purchase orders, [1] under the corporate name Gateway International and an address at 8300 Cote de Liesse. [ 6 ] The adds were placed and several invoices were sent by the Plaintiff to Gateway International. [2] [ 7 ] Four cheques were sent to the Plaintiff totalling $3,764.97. [3] The cheques were issued in January and February 2010.

The drawer is indicated as Gateway International and Defendant Schacter signs underneath this name. [ 8 ] The cheque stubs [4] refer to Plaintiff's invoice numbers. [ 9 ] The first cheque was cashed by the Plaintiff [5] but returned by the issuing bank stating that the account was closed.The three other cheques [6] were never cashed. [ 10 ] Although the statement of account [7] indicates a balance owing of $7,012.60, the invoices filed in Court total $6,671.83. No evidence was provided to substantiate the difference of $340.77.

The Court concludes that only the amount of $6,671.83 can be claimed. [ 11 ] In addition, the Plaintiff refers the Court to clause 8 of the purchase orders which provide that liquidated damages equal to 25% of the amount owed can be claimed, should the Plaintiff be obligated to retain the services of an attorney for collection.

This represents an additional amount of $1,667.95. [ 12 ] The amount outstanding of $8,339.78 bears interest at the rate of 18%, as provided in paragraph 19 of the purchase orders. [ 13 ] Although at Court, Defendant Schacter complained of the amount of circulation of the adds, the Court notes that he never

complained to the Plaintiff.

In fact, Defendant's Schacter Contestation is limited to his personal liability. [ 14 ] Defendant Schacter provides a photo of the entrance of the building, showing the name of Gateway International on the door. [8] As for the certificate of occupation issued by the City of Montreal, it indicates that the corporate Defendant occupies the premises. [9] The Court notes that the commercial name of the corporate Defendant is Powergrip and not Gateway International. [ 15 ] Corporate Defendant was registered in February 2004 and Defendant Schacter is listed as the President and majority Shareholder. [10] Under this registration, the company registered several names such as Gate Way and Gateway, but no registration is made for Gateway International. [ 16 ] In fact, a corporate search [11] does not reveal any registration of the name Gateway International for the corporate Defendant. [ 17 ] Defendant Schacter argues that he should not be liable for a registration error, if the name Gateway International was not probably registered.

He adds that if Gateway International is not a trade mark, the corporate Defendant should be liable and not him. [ 18 ] The Court disagrees with Defendant's Shacter arguments. [ 19 ]

Article 306 of the Civil Code of Quebec provides: Art. 306 A legal person may engage in an activity or identify itself under a name other than its own name. It shall give notice to the enterprise registrar by filing a declaration to that effect in accordance with the Act respecting the legal publicity of enterprises (chapter P- 44.1 ) and, if the legal person is a syndicate of co-owners, apply for the registration of such a notice in the land register. [ 20 ] Article 10(5) of the

Canada Business Corporations Act [12] provides that: 10.

(5) A corporation shall set out its name in legible characters in all contracts, invoices, negotiable instruments and orders for goods or services issued or made by or on behalf of the corporation. [ 21 ] Moreover, an Act Respecting the Legal Publicity of Sole Proprietorships, Partnerships and Legal Persons [13] applies to every person or partnership doing business in Québec as indicated in the following articles: Art. 2 The following are subject to the requirement of registration:

(5) Every legal person established for a private interest not constituted in Québec, but domiciled in Québec, which carries on an activity in Québec, including the operation of an enterprise, or possesses an immovable real right, other than a prior claim or hypothec, in Québec; Art. 10 Save an exemption established by regulation, a declaration of registration shall contain: (2) any other name used by the registrant in Québec in carrying on an activity, in operating an enterprise of for the purposes of the possession of an immovable real right, other than a prior claim or hypothec; Art. 13 No registrant may declare or use in Québec a name which: (8) may lead to confusion with a name used by another person, partnership or group in Québec, taking into account, in particular, the criteria determined by regulation; [ 22 ] The purpose of these provisions is to clearly inform third parties who exactly they are doing business with. [ 23 ] A shareholder who neglects to properly register a corporate name or neglects to inform a third party of the actual person the latter does business with cannot invoke on his behalf the corporate veil.

In those circumstances, the Court is justified in concluding that the contract was concluded by the shareholder personally. [14] FOR THESE REASONS, THE COURT: GRANTS in part Plaintiff's Action; CONDEMNS Defendant Lorne Schacter solidarily with 6183310 Canada Inc. to pay to Plaintiff the sum of $8,339.78 plus interest at the rate of 18% from the date of service; WITH COSTS. __________________________________ DIANE QUENNEVILLE, J.C.Q Me Alan Adel ARCHAMBAULT ADEL TRUDEL

Attorneys for Plaintiff Mr. LORNE SHACTER Representing himself Date of hearing: January 27, 2011