2020 QCCA 1582, 2020 QCCA 1582

Toronto-Dominion Bank c. Pourshafiey 2020 QCCA 1582 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-027780-188 (500-17-074476-121) DATE: November 25, 2020 CORAM: THE HONOURABLE ALLAN R. HILTON, J.A. MARIE-JOSÉE HOGUE, J.A. STEPHEN W. HAMILTON, J.A. THE TORONTO DOMINION BANK APPELLANT/INCIDENTAL RESPONDENT – Defendant v. HOSSEIN POURSHAFIEY 4291921 CANADA INC.

RESPONDENTS/INCIDENTAL APPELLANTS – Plaintiffs JUDGMENT [ 1 ] The Toronto Dominion Bank appeals from a judgment rendered on July 20, 2018 by the Superior Court, District of Montreal (Justice Gregory Moore), which condemns it to pay the sum of $61,624.62 to the Respondent Hossein Pourshafiey and the sum of $15,000 to the Respondent 4291921 Canada Inc. plus interest at the legal rate and additional indemnity.

The Respondents have filed an incidental appeal. [ 2 ] For the reasons of Hamilton, J.A., with Hilton and Hogue, JJ.A. concur, THE COURT : [ 3 ] GRANTS the de bene esse application for leave to appeal; [ 4 ] GRANTS the amended application to produce new evidence; [ 5 ] ALLOWS the appeal in part; [ 6 ] REDUCES the damages award to the Respondent Pourshafiey in paragraph 99 of the judgment in first instance from $34,000 to $25,000, plus interest at the legal rate and additional indemnity as of December 19, 2012; [ 7 ] SETS ASIDE the conclusion in paragraph 100 of the judgment in first instance ordering the Appellant to reimburse the extrajudicial fees incurred by the Respondent Pourshafiey; [ 8 ] DISMISES the incidental appeal; [ 9 ] THE WHOLE without costs on the appeal.

ALLAN R. HILTON, J.A. MARIE-JOSÉE HOGUE, J.A. STEPHEN W. HAMILTON, J.A. Mtre François M. Giroux Mtre Ayse Dalli Mtre Sébastien Cusson MCCARTHY TÉTRAULT For the Appellant/Incidental Respondent Mtre Alan M. Stein

ALAN M. STEIN Mtre Patrycja Nowakowska BERGMAN & ASSOCIÉS For the Respondents/Incidental Appellants Date of hearing: September 1, 2020 REASONS OF HAMILTON, J.A. THE CONTEXT [ 10 ] The Respondent Hossein Pourshafiey, who is of Iranian origin, founded the Respondent 4291921 Canada Inc., which operated under the name Moneywise Financial (“Moneywise”), a money service business, in 1998. In 2009, he started a banking relationship with the Appellant.

In September 2009, he opened a personal deposit account, a personal investment account and accounts for a few of his businesses, including Moneywise, and he obtained a home equity line of credit (“HELOC”) secured by a hypothec on one of his residences. In February 2010, the Appellant granted Moneywise access to its rapid wire service, which allowed Moneywise to make same-day wire transfers of funds directly from its office. [ 11 ] The banking relationship lasted three years.

By letter dated October 1, 2012, the Appellant informed Pourshafiey that it was closing all of his personal and business accounts (including the Moneywise accounts) on November 5, 2012 and that it required payment of his HELOC on November 30, 2012. Certain services, including the access to credit under the HELOC, were suspended immediately. The notice of termination provided the following reasons: TD periodically conducts a review of all of its customer relationships as part of our approach to managing our business.

As a result of this review, we have determined that we can no longer continue to support your current accounts and/or services, or offer you any new accounts and/or services.

We have considered this matter very carefully and assure you that our decision was not arrived at lightly. [1] [ 12 ] No further explanation was given to Pourshafiey, despite his attempts to obtain more information. [2] The access to the rapid wire service was not mentioned in the termination letter, but it was terminated immediately. [ 13 ] Pourshafiey was unable to obtain financial services equivalent to those that Moneywise had enjoyed with the Appellant from any other financial institution.

On November 2, 2012, the Respondents initiated proceedings in Superior Court, which included a request for a provisional injunction restraining the Appellant from closing their accounts.

The motion was presented ex parte on November 2, 2012 and the Superior Court issued a provisional injunction keeping the accounts open until November 7, 2012 in order to give the Appellant a chance to contest. [3] On November 8, 2012, the Superior Court dismissed the motion. [4] A subsequent motion for a safeguard order to reinstate the accounts and services was dismissed by the Superior Court on December 21, 2012. [5] [ 14 ] The proceedings continued as an action for damages and for a permanent injunction to reinstate the accounts and services.

The Respondents claimed a total of $625,000 in damages, divided as follows: • $275,000 representing the value of Moneywise’s business loss and/or loss of profits; • $250,000 representing the inconvenience and emotional stress Pourshafiey suffered since the closing of his bank accounts; • $50,000 representing legal fees; and • $50,000 representing punitive damages.

THE TRIAL JUDGMENT [6] [ 15 ] The trial judge rejected the Respondents’ application for a permanent injunction, on the basis that the Appellant had the right to close the accounts and terminate the services under the terms of the contracts between the parties. [7] [ 16 ] However, the trial judge concluded that the Appellant did not act in good faith when it terminated Moneywise’s rapid wire service without any explanation nor notice. [8] He also considered that the 35-day notice period was too short and that a three-month notice period would have been appropriate. [9] [ 17 ] With respect to the claim for business loss and/or loss of profits, the trial judge refused to grant the value of Moneywise’s business as damages, since he was not convinced that the Appellant was solely responsible for its demise. [10] Instead, he awarded $15,000 in damages as the profit that Moneywise would have earned during the three-month notice period. [11] [ 18 ] The trial judge also awarded an amount of $34,000 to Pourshafiey for the stress and inconvenience caused by the abrupt termination of his accounts and by the Appellant’s decision not to inform Pourshafiey of its reasons. [12] [ 19 ] He rejected Pourshafiey’s claim for punitive damages based on alleged discrimination.

He was satisfied that the evidence showed that the Appellant closed the accounts because of Canada’s economic sanctions against Iran and not because of Pourshafiey’s national origin. [13]

[ 20 ] Finally, the trial judge ordered the Appellant to pay the sum of $27,624.62 as legal fees to the Respondents in light of its unreasonable conduct since the institution of the proceedings. [14] THE PROCEEDINGS IN APPEAL [ 21 ] The Appellant submitted a notice of appeal on August 27, 2018, in which it asked that the trial judgment be set aside and the Respondents’ action dismissed. [ 22 ] At the same time, the Appellant also filed a de bene esse application for leave to appeal, in which it argued that the total amount of the dispute in appeal was over the $60,000 threshold for the appeal to be as of right, but still asked the Court for leave to appeal if it concluded otherwise. [15] This application was deferred to the panel hearing the appeal on the merits . [16] [ 23 ] The Respondents filed an incidental appeal on September 10, 2018 in which they asked the Court to grant all of the conclusions presented in Superior Court as well as the legal fees incurred for the appeal. [ 24 ] On August 9, 2019, sitting as judge alone, I deferred the Respondents’ application to produce an account of legal fees incurred for the appeal to the panel hearing the appeal on the merits. [17] [ 25 ] Before addressing the merits of the appeal and the incidental appeal, these two preliminary questions must be answered. 1.

The de bene esse leave to appeal [ 26 ] The Appellant was ordered to pay $61,624.62 to Pourshafiey and $15,000 to Moneywise. The Appellant argues that its right to appeal should be considered with respect to both Respondents together, such that the total amount of the dispute in appeal is over the $60,000 threshold and leave is not required. It made the de bene esse application for leave to appeal because, if its right to appeal is considered separately for each Respondent, it requires leave to appeal with respect to Moneywise. [ 27 ]

Article 30 C.C.P. states that leave is necessary if “the value of the subject matter of the dispute in appeal is less than $60,000”. The case law under the previous Code is well settled that the amounts payable to each respondent must be considered separately in order to establish whether the threshold is met with respect to each respondent. [18]

Article 30 C.C.P. uses essentially the same wording as

Article 26 of the previous Code and was intended to reflect the prior law. [19] [ 28 ] I see no reason to adopt a new

interpretation and to depart from the existing case law. [ 29 ] It follows that leave to appeal is required for the Appellant’s appeal against Moneywise, since the trial judge awarded a sum of $15,000, even though the Appellant has an appeal as of right against Pourshafiey. [20] In my view, leave should be granted on the basis that the Moneywise appeal raises serious questions that present an interest that goes beyond the parties’ interests. [21] 2.

The production of additional evidence [ 30 ] As part of their incidental appeal, the Respondents argue that the appeal is abusive and that they should be entitled to the legal fees incurred for the appeal. They therefore ask the Court for permission to produce an account of those legal fees. [ 31 ] The criteria for the production of new evidence under

Article 380 C.C.P. are clearly met: the account for legal fees incurred for the appeal is new evidence and it is essential to the Respondents’ claim for the reimbursement of those legal fees. THE PRINCIPAL APPEAL [ 32 ] The issues raised by the appeal relate to four subjects: 1. The right to terminate the contract 2. The appropriate notice period 3. The compensatory damages awarded to the Respondents 4. The abuse of proceedings 1. The right to terminate the contract [ 33 ] The Appellant gave a 35-day notice to the Respondents before closing their accounts.

The notice was longer with respect to the repayment of the HELOC, and no notice was given with respect to the suspension of access to credit under the HELOC or the termination of access to the rapid wire service. Leaving aside the HELOC, the Appellant argues that it had sufficient grounds to terminate all banking arrangements without notice under the terms of the Business Banking and Service Agreement (“BBSA”). [ 34 ]

Section 28 of the BBSA provides as follows: 28. Either of us may terminate this agreement, any Service or the license to use the Service Materials by giving the other written notice , unless specified otherwise in the applicable Schedule. We may terminate this agreement or any Service or remove any account from participation in any Service, or close any account, without notice if:

(

a) You default on any obligation under this agreement or on any other agreement or instrument with us; (

b) We are served with any demand, attachment, garnishment or other order that requires us to pay any funds that we would have otherwise paid or advanced to you or on your behalf, or a receiver or receiver manager is appointed for any of your property, or you are bankrupt or insolvent , or any proceeding is commenced by or against you under any bankruptcy, insolvency or winding up statute or (

c) We reasonably believe that there has been or may be improper, unauthorized or unlawful use of the Service, Service Materials or Access Devices. If this agreement is terminated, all Services are automatically terminated. If any Service is terminated, the terms of this agreement will remain in effect for all other Services covered by this agreement. Upon termination of a Service, you will cease to use the Service and we will cease to perform any Service transactions and we may recall any instructions given to third parties.

You will remain responsible to us for any indebtedness or liability owed to us despise termination and the closing of any accounts in relation thereto. After termination or closing of any accounts by us, any net funds remaining on deposit may be paid to you or to your legal representative and the Bank will have no further liability in respect to such funds. [22] [Emphasis added] [ 35 ]

Section 28 provides for two distinct regimes for terminating the agreement or any service: first, either party can terminate the BBSA without cause upon giving written notice to the other party; second, the Appellant may terminate the agreement in certain specific circumstances, including if the other party is in default under the agreement or if the Appellant “reasonably believe[s] that there has been or may be improper, unauthorized or unlawful use” of the services. The only requirement for the first termination regime is a notice; the reasons for it are irrelevant.

On the other hand, the second termination regime is available only for the reasons listed in the BBSA. [ 36 ] This dual regime for termination is not unique to this contract.

There is generally a right to terminate a contract of indeterminate duration upon giving reasonable notice, [23] and a right to terminate a contract without notice for a default that is not of minor importance. [24] The C.C.Q. also gives a party the right to terminate unilaterally without notice under certain conditions a contract of enterprise or for services, [25] a mandate, [26] a partnership, [27] a suretyship [28] or a contract of employment. [29] [ 37 ] In all of these situations, the party terminating the contract must choose one regime or the other and the termination will be governed by the rules of that regime . [30] In other words, if the party terminates the agreement without cause, it must give notice; if it terminates the agreement for cause, it must establish that the cause is sufficient to justify termination. [ 38 ] In the present case, the termination letter provided the following: TD periodically conducts a review of all of its customer relationships as part of our approach to managing our business.

As a result of this review, we have determined that we can no longer continue to support your current accounts and/or services, or offer you any new accounts and/or services. We have considered this matter very carefully and assure you that our decision was not arrived at lightly. [ 39 ] The termination letter does not allege any of the grounds for termination without notice set out in

Section 28 of the BBSA. Moreover, the evidence establishes that no other explanation was given to Pourshafiey at that time. [ 40 ] Consequently, the Appellant must be taken to have terminated the contract under the first paragraph of

Section 28, by giving notice. The reasons for this decision do not matter: only the reasonableness of the notice does. To paraphrase Justice Savard (as she then was), the Appellant’s decision must be assessed on the basis of what it decided, not what it could have decided. [31] [ 41 ] It follows that the Appellant is precluded from now invoking its right to terminate the contract for one of the grounds set out in the second paragraph of

Section 28 in order to evade its obligation to provide a proper notice. [ 42 ] The trial judge concluded that the Appellant should have maintained the rapid wire service during the notice period. I see no reviewable error affecting this conclusion. The termination letter does not specifically refer to the rapid wire service and therefore it should terminate at the same time as the accounts are closed. It may be that the Appellant had grounds to terminate the rapid wire service sooner under the second paragraph of

Section 28, but it did not do so and cannot invoke those grounds now. 2. The notice period [ 43 ] When a contract of indeterminate duration is terminated without cause, the party terminating the contract must give the other party reasonable notice. The purpose of the notice period is to allow the other party to avoid a loss by making alternative arrangements to replace the contract.

If the party terminating the contract fails to provide reasonable notice, the other party will be compensated in damages, which will include the lost earnings during the reasonable notice period. [32] [ 44 ] The determination of what constitutes a reasonable notice depends on the circumstances of each case. [33] The judge’s determination of reasonable notice is a matter of fact. [34] It will only be reviewed on appeal if the appellant demonstrates a palpable and overriding error in the judge’s analysis. [ 45 ] In this case, the trial judge concluded that the 35-day notice given by the Appellant was too short in the circumstances and that a three-month notice would have been reasonable. [ 46 ] The Appellant challenges this conclusion, citing cases where 30-day notices were upheld, including the earlier judgments in this matter refusing a provisional injunction and a safeguard order.

[ 47 ] Contrary to what the Appellant argues, there is no hard rule according to which a 30-day notice is reasonable. There are decisions recognizing that a notice must sometimes be longer. [35] Moreover, the earlier judgments in this matter are not binding. In dismissing the application for a provisional injunction, Justice Lefebvre referred to the general rule that a 30-day notice was reasonable and stated “[les demandeurs] n’ont pas allégué pour quel motif le délai de 35 jours donné par la banque était déraisonnable dans les circonstances”.

These passages were cited by Justice Reimnitz in refusing a safeguard order. [ 48 ] At trial, the judge based his conclusion that the 35-day notice period was too short on “the foreseeable upheaval that closing the accounts would cause Mr. Pourshafiey and his companies.” [ 49 ] This must be taken as a reference to the business disruptions that the Respondents would encounter in the short term because the Appellant had terminated the rapid wire service immediately and would be closing the accounts in 35 days.

After opening their accounts with the Appellant in September 2009, the Respondents were required to submit additional documents and undergo a further screening before being authorized to use the rapid wire service. [36] The Appellant only agreed to provide this service to Moneywise several months later, on February 8, 2010. [37] It was reasonable to infer that the Appellant knew that Moneywise would need several months to go through a similar due diligence process in order to obtain from another bank the same services that the Appellant was providing, and that it would suffer business disruptions until then. [ 50 ] The trial judge also referred to the two-and-a-half-month notice given by the Royal Bank of Canada when it terminated its banking relationship with the Respondents in 2002.

While the notice period given by a previous bank in a similar situation does not necessarily constitute a minimum for a subsequent bank, it is certainly a contextual element that can help the trial judge to determine if a notice is reasonable. [ 51 ] The Court owes deference to the trial judge’s conclusion and the Appellant fails to demonstrate any palpable and overriding error. [ 52 ] I would reject this ground of appeal. 3. The compensatory damages awarded to the Respondents a. Lost revenue [ 53 ] The trial judge awarded the sum of $15,000 to Moneywise as lost revenue during the three-month notice period.

He calculated Moneywise’s revenue by applying the 1% markup that Moneywise charged (according to Pourshafiey’s testimony) to the volume of transactions as set out in Moneywise’s unaudited financial statements.

He added that even without relying on the unaudited financial statements and in the absence of other evidence but relying instead on his broad discretion to evaluate damages, he found that $15,000 was a reasonable award in the circumstances. [ 54 ] The Appellant argues in appeal that Moneywise failed to meet its burden of proof on causation and damages. [ 55 ] The reliance on the unaudited financial statements in the calculation of the lost revenue raises issues.

When the Appellant objected to their admissibility at trial, the judge concluded as follows: [50] The objection, while well-founded, is dismissed because without this evidence, Moneywise Financial has no proof of the damages that it seeks to recover. [ 56 ] The wording used by the trial judge to dismiss the objection is certainly awkward, but I would not intervene. When he stated that the Appellant’s objection may be “well-founded”, [38] he referred to the decision of CHSLD juif de Montréal c.

Entreprises Francer inc ., [39] which set out a strict rule concerning the inadmissibility of unaudited financial statements. At the time of the judgment, the trial judge did not have the benefit of the Court’s recent reasons in American Brands, S.A. c. Capmatic Ltd. [40] and Compagnie des arts et métiers traditionnels limitée c.

Ordre de la très Sainte-Trinité (Les Trinitaires) , [41] in which the Court held that unaudited financial statements may be admissible, “si d’autres éléments de preuve permettent de conférer à ces états financiers une valeur probante et une fiabilité suffisante justifiant leur admissibilité en preuve.” [42] [ 57 ] If the trial judge had had the benefit of these two recent rulings, he would have been justified in admitting the unaudited financial statements into evidence for the limited purpose of establishing the volume of transactions.

Indeed, the volume of transactions in the unaudited financial statements comes directly from the monthly bank statements issued by the Appellant, such that, at least on that issue, the unaudited financial statements offered “a sufficiently reliable portrait of [Moneywise’s] financial situation to be admitted into evidence, subject to their probative value.” [43] [ 58 ] Moreover, the Appellant filed into evidence the complete bank statements for all of Moneywise’s accounts that list all the transactions made since the opening of the accounts. [44] The trial judge could have found the same volume figures in those statements and performed the same calculation without relying on the unaudited financial statements. [ 59 ] In any event, the calculation of the damages due to a wronged party is not an exact science.

The Court has recognized that, when the evidence does not allow for the calculation of damages with the rigour of a mathematician, a judge must estimate the damages the best way possible, at the risk that the exercise be marked by a certain degree of approximation . [45] During an appeal, the Court must respect the judge’s discretion in the evaluation of damages. In Birdair inc. c.

Danny's Construction Company Inc. , the Court describes this deference as “surdéférence”. [46] [ 60 ] Given the deference due to this conclusion, I would not interfere on his calculation of the lost profits. [ 61 ] As for the causation argument, the trial judge found that Moneywise lost its ability to do business when the Appellant withdrew its access to the rapid wire service. There was in fact a significant and immediate drop in the volume of transactions for which there is no

other reasonable explanation. Causation is a question of fact and the Appellant has not demonstrated a palpable and overriding error in the trial judge’s analysis. [ 62 ] I would reject the ground of appeal with respect to the damages awarded to Moneywise. b. stress and inconvenience [ 63 ] The trial judge awarded Pourshafiey a sum of $34,000 for the stress and inconvenience caused by the termination of his accounts and by the failure by the Appellant to disclose its reasons.

The Appellant contests the trial judge’s factual conclusion that Pourshafiey did not know the reason why the accounts were closed. [ 64 ] The Appellant’s failure to disclose the reasons for closing the accounts is not a fault. As I explained earlier, when a party chooses to terminate a contract without cause by giving notice in circumstances that allow for such termination, the reasons surrounding this decision are irrelevant. There need not even be any reasons. Therefore, there is no obligation to explain these reasons to the other party.

Similarly, Pourshafiey’s knowledge of the Appellant’s reasons to close the accounts does not matter.

The trial judge erred in awarding damages for the stress and inconvenience caused by the Appellant’s failure to disclose the reasons for the termination. [ 65 ] However, Pourshafiey is entitled to damages for the stress and inconvenience caused by the Appellant terminating the rapid wire service immediately and closing his accounts in 35 days instead of waiting three months. [ 66 ] Further, he is entitled to damages for the stress and inconvenience caused by the Appellant sending a letter on November 9, 2012 demanding full payment of the HELOC within 10 days when it had previously given him until November 30, 2012. [ 67 ] The trial judge’s assessment that the stress and inconvenience suffered by Pourshafiey represents $34,000 is a matter left to the appreciation of the trial judge and the Appellant has not demonstrated a palpable and overriding error in the trial judge’s conclusion.

While it is difficult to assess what portion of the stress and inconvenience suffered by Pourshafiey is attributable to which part of the Appellant’s behaviour, I would assess the damages to which he is entitled at $25,000. [ 68 ] I would therefore allow in part the appeal with respect to the damages awarded to Pourshafiey and reduce those damages to $25,000. 4. The abuse of proceedings [ 69 ] The trial judge awarded a sum of $27,624.62 in legal fees to the Respondents in light of the Appellant’s abuse of proceedings.

He summarized that conduct as follows: [86] TD Bank’s conduct can be summarized as follows: • it dared its client to sue; • it bullied its client to drop its suit; • it did not disclose its ultimate theory of the case in its defence, in the exhibits it disclosed, nor via the representative it put forward for pre-trial discovery; • the declaration of readiness for trial states that TD Bank would rely on 8 exhibits. Two weeks before trial, it filed 3 volumes of evidence.

On the first day of trial, it filed 500 pages of account transactions as part of 3 more previously undisclosed exhibits; • among the new exhibits is (

i) a declaration by the author of the October 1, 2012 letter, which states that he had nothing to do with the decision to terminate the business relationship with the plaintiffs, and (ii) an email to the branch manager showing that the decision was made by the Global Anti-Money Laundering group; • TD Bank disclosed all of this new evidence without amending its defense or otherwise advising the plaintiffs of its ultimate theory of the case; • on the second-last day of trial, its witness explained that Mr.

Pourshafiey appeared to have made transfers to and from Iran in violation of economic sanctions and that the bank was not comfortable with the risk he posed to its business. [Footnotes omitted] [ 70 ] Essentially, the abuse comes down to four specific matters: • the failure to reveal the reasons for the termination (“it dared its client to sue”, to find out the reasons), • the letter demanding full payment of the HELOC within 10 days, sent two days after the filing of the procedures (“it bullied its client to drop its suit”), • the voluminous exhibits filed at the first day of trial, and • the failure by the Appellant to disclose its ultimate theory of the case until the second-last day of trial.

The Appellant contests these four findings by the trial judge. [ 71 ] For the reasons I have detailed above, the trial judge erred when he faulted the Appellant for not disclosing the reasons for the

termination. Having chosen to terminate the contract without cause, the Appellant did not need to have any reasons and had no obligation to provide any reasons on which it was not relying. [ 72 ] It follows that it should not have been necessary for the Appellant to amend its plea and to call James Hatchard to testify as to the suspicious transactions that he noted. That was not the basis on which the Appellant purported to terminate the banking relationship and that proof was in principle irrelevant.

The trial judge concluded that it was abusive for the Appellant to amend its plea and to have Hatchard testify as to matters that were irrelevant. [ 73 ] I do not agree with the trial judge’s conclusion. From the moment he received the termination letter and right through the trial, Pourshafiey complained that he had not been given the reasons for the termination and said that he would not have sued if he had been given those reasons. Moreover, he claimed punitive damages on the basis that the banking relationship had been terminated because he is of Iranian origin.

In all of the circumstances of this case, it was reasonable for the Appellant to prove the suspicious transactions. [ 74 ] The trial judge further concluded that the letter demanding the full payment of the HELOC sent only two days after Pourshafiey’s judicial application was an attempt to intimidate him. There was evidence from which the trial judge could draw that conclusion and the Appellant has not demonstrated any palpable and overriding error. That letter caused stress to Pourshafiey, which was compensated in the previous section.

However, there is no evidence that his lawyers responded to it or that the Respondents incurred any legal fees as a result of the letter. [ 75 ] Finally, the filing of voluminous exhibits on the first day of the trial can be an abuse of process, but it depends on the nature of the exhibits and whether the opposing party is taken by surprise. Trial by ambush is no longer acceptable. In this case, the voluminous exhibits were largely Moneywise’s bank statements. They should have been produced sooner, but they were of limited relevance in the trial and did not take anyone by surprise.

The Respondents did not object to their late production and did not ask for any time to review them. In the circumstances of this case, their late production does not amount to an abuse of process. [ 76 ] As a result, I would set aside the conclusion whereby the trial judge awarded a sum of $27,624.62 in legal fees to the Respondents for abuse of proceedings. THE INCIDENTAL APPEAL [ 77 ] The incidental appeal raises three issues that can be summarized as follows: 1. The value of the business as damages 2. The punitive damages 3. The legal fees incurred for the appeal 1.

The value of the business as damages [ 78 ] In their incidental appeal, the Respondents argue that the trial judge should have awarded the full value of the business, which they evaluate at $275,000. With all due respect, I disagree. [ 79 ] The Respondents’ $275,000 claim is based on the assertion that the Appellant is responsible for the demise of the business. [ 80 ] The Appellant can be held liable only for the immediate and direct consequences of its fault, [47] which was the failure to give a longer notice.

The trial judge concluded that Moneywise may not have survived even with a proper notice and that, therefore, the Appellant could not be held liable for its demise. [48] I see no error in this conclusion. In any event, the evidence supporting the value of the business was very weak. [49] 2. The punitive damages [ 81 ] In first instance, the Respondents asked for punitive damages for discrimination based on national origin.

This claim was dismissed by the trial judge. [50] In appeal, the Respondents make an entirely new claim for punitive damages based on the Consumer Protection Act . [51] This is a new issue on appeal, “legally and factually distinct from the issues litigated at trial”. [52] [ 82 ] As a general rule, a new issue should not be raised during an appeal , [53] unless there are exceptional circumstances which explain the presentation of the question at this stage and the Court determines that it should exercise its discretion to examine the question, given the strategic aspect of the claim, the evidence in the file, the prejudice that could be suffered by the opposing party and the denial of justice that could be suffered if the Court refuses to deal with the question. [54] [ 83 ] The claim for punitive damages under the Consumer Protection Act could have been made during the trial.

It is raised now because the claim for punitive damages based on the Charter of Human Rights and Freedoms [55] did not succeed. These do not constitute exceptional circumstances. Moreover, there is nothing “new” to the claim that should warrant the exercise of the Court’s discretion to examine the issue. Accordingly, I would reject this ground of appeal. 3. The legal fees incurred for the appeal [ 84 ] Finally, the Respondents ask for an extension of damages in the form of legal fees for abuse of procedure in light of the Appellant’s appeal that is, according to them, abusive. I would reject this claim.

There is nothing dilatory about the appeal that would warrant a declaration of abuse and damages. Indeed, there is some merit to the appeal, as shown by the above analysis. In addition, nothing in the conduct of the appeal shows that the Appellant used procedure in an unreasonable way.

CONCLUSION [ 85 ] In conclusion, I suggest that the Court grant the de bene esse application for leave to appeal and the application to produce new evidence, that the Court allow the appeal in part, to reduce the damages award to the Respondent Pourshafiey from $34,000 to $25,000 plus interest at the legal rate and additional indemnity as of December 19, 2012, and to set aside the conclusion awarding legal fees to the Respondents as damages for abuse of process, and that the Court dismiss the incidental appeal, the whole without costs on the appeal. STEPHEN W. HAMILTON, J.A.