2015 QCCQ 5883, 2015 QCCQ 5883

Batah c. Entreprises EJ Electric Ltd. 2015 QCCQ 5883 JP 2262 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL CIVIL DIVISION No: 500-22-215384-143 DATE: July 3, 2015 ______________________________________________________________________ IN THE PRESENCE OF: THE HONOURABLE VINCENZO PIAZZA, J.C.Q. ______________________________________________________________________ PETER BATAH Plaintiff v.

LES ENTREPRISES EJ ELECTRIC LTD. and TONY TOMASSI Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Mr. Batah is an information technology (“IT”) consultant, doing business under the name Mega Bytes. [ 2 ] Les Entreprises EJ Electric Ltd. (“EJ”) is a recently formed company based in Montreal. Its business is flourishing. Its sole director and shareholder, David Murray, is a skilled and hardworking master electrician, but he lacks experience in management and business administration. [ 3 ] Mr.

Tomassi is a former member of the National Assembly, liberal minister and businessman. In 2010, his political career comes to an end when he is expelled from cabinet and his party’s caucus, and is later prosecuted and eventually pleads guilty to a charge of fraud on the government. For many years, Mr. Tomassi’s life is in complete turmoil, as his political and judicial misadventures are the subject of public scrutiny and massive media coverage. [ 4 ] Mr. Tomassi testifies that through this ordeal, very few people remain loyal to him. Mr.

Murray is one of these people. [ 5 ] It is in this context that in December 2013, Mr. Murray hires Mr. Tomassi as EJ’s project director. Mr. Tomassi used to run a construction company before he went into politics. Mr. Tomassi supports and advises Mr. Murray in his day-to-day functions and is involved in every aspect of EJ’s business. Mr. Murray is delighted with Mr. Tomassi’s performance. [ 6 ] In 2014, EJ obtains an important contract from its principal client, Davaco, to carry out electrical work in numerous British Columbia stores of Davaco’s client, a successful multinational restaurant chain. [ 7 ] Mr.

Tomassi tells Mr. Murray that he should hire someone to supervise this project in British Columbia, and he suggests Mr. Batah. Mr. Batah recently did some IT work for EJ. He also worked for Mr. Tomassi on a few occasions, when he was in business and politics. Mr. Tomassi knows that Mr. Batah is in dire straits and very eager to work. [ 8 ] In March 2014, Mr. Tomassi offers Mr. Batah to “be his eyes and ears” for the duration of the project in British Columbia. Mr. Batah accepts. [ 9 ] Mr. Batah invoices EJ for his services. Some invoices are paid and some are not. [ 10 ] Mr.

Batah claims that there were never any reproaches from EJ regarding his work and that he fulfilled his contract. EJ argues that Mr. Batah failed to perform many of the tasks that were expected of him, that his performance was mediocre, that he was often unavailable, moody, irascible and unpredictable and that he abruptly abandoned the project before it was completed, thereby causing damages to EJ. [ 11 ] Mr. Batah introduces his proceedings on September 10, 2014. [ 12 ] Somehow, the Journal de Montréal gets word of Mr. Batah’s suit. On September 13, 2014, it erroneously reports that Mr.

Tomassi was condemned to pay $13,505.70 to Mr. Batah, described as Mr. Tomassi’s personal friend. Needless to say, the

article reminds its readers of Mr. Tomassi’s past legal predicaments. Mr. Tomassi testifies that he was deeply distraught by the resurgence of his name in the media. [ 13 ] Mr. Murray testifies that several clients called to enquire about the

article and express their concern. A “phantom email” outlining Mr. Tomassi’s story was circulated by an unknown sender to all important Davaco people. Davaco, a public company, who

was not aware of Mr. Tomassi’s past, questioned Mr. Murray’s judgment in hiring him, to a point where Mr. Murray felt that EJ’s future dealings with Davaco were seriously jeopardized. The bank stonewalled discussions about a line of credit for EJ. One of EJ’s new clients, who had recently given a first contract to EJ, informed Mr. Murray that this would be his last business ever from them. Mr. Murray mentions that he also had to explain himself at length and appease the situation with two other clients. THE CLAIMS [ 14 ] Mr. Batah claims $67,301.32 from the defendants, solidarily, on the basis that Mr.

Tomassi is a de facto director of EJ, which would, in and of itself, entail his personal liability. [ 15 ] Mr. Batah’s claim breaks down as follows: • $13,505.70 on account of unpaid services • $13,795.32 for legal fees paid to his attorney • $20,000.00 for trouble and inconvenience • $20,000.00 as punitive damages [ 16 ] EJ contests the claim, and in particular the allegation that Mr. Tomassi is its de facto director. In cross-demand, it asks that Mr.

Batah be condemned to pay it $39,135.35, broken down as follows: • $862.32 paid to another IT consultant • $3,000.00 for loss of productivity • $10,000.00 for damages to its reputation • $10,000.00 for the loss of a client • $10,000.00 as punitive damages • $5,273.03 for legal fees paid to its attorney [ 17 ] Mr. Tomassi denies being a director of EJ. He also forms a cross-demand against Mr. Batah and claims $10,000.00 for trouble and inconvenience, $5,000.00 as punitive damages and $5,273.03 for legal fees paid to his attorney, for a total of $20,273.03.

ANALYSIS AND DISCUSSION Tony Tomassi [ 18 ] The fact that Mr. Tomassi played an important, central, if not vital role in EJ’s direction and administration is not contested. However, this is certainly no justification for Mr. Batah’s action against him. [ 19 ] Counsel for Mr. Batah cross-examined Mr. Murray and Mr. Tomassi extensively, on a note in EJ’s internal financial statements [1] entitled “ Dû aux administrateurs ” which shows that $12,000.00 was owing to Mr. Tomassi as at December 31, 2013. [ 20 ] Although the attempt was to demonstrate that Mr.

Tomassi was indeed a director of EJ, these cross-examinations rather allowed Mr. Tomassi and Mr. Murray to explain, again and again, that while it was true that EJ owed 12,000.00$ to Mr. Tomassi, the mention that he was a director was an error by EJ’s bookkeeper. Mr. Murray, in particular, testified that he does not understand much about accounting and that he trusts his accountants, with whom he sits down every year, to review and explain every line of EJ’s financial statements. This is what he did for the year ended June 30, 2014. Mr.

Murray testifies that the financial information reported internally by EJ’s staff was a terrible mess. This infuriated him, as he had to pay thousands of dollars more to his accountants to correct all the errors. The mention of Mr. Tomassi being a director is one of those errors, and it does not appear in the final statements produced by the accountants [2] . [ 21 ] It is noteworthy that counsel for Mr. Batah objected to the filing of these final financial statements.

One of the arguments made to support the objection was that the Court should not trust this document, unless the accountant came to testify as to its genuineness. Mr. Batah’s counsel argued that since Mr. Tomassi has been convicted of fraud, these statements could very well have been falsified. [ 22 ] The axiom “qui a fraudé fraudera” is systematically rejected by the Court of appeal [3] , not to mention the Civil Code , which states in no uncertain terms that unless the law expressly requires that it be proved, good faith is always presumed [4] . [ 23 ] The objection, of course, was overruled. [ 24 ] Mr.

Murray’s cross-examination also emphasized heavily that he was not the one who had devised EJ’s chart of accounts. Be that as it may, how is it even relevant to establish that Mr. Murray is not EJ’s true director? No authorities were submitted to support the idea that the establishment of a company’s chart of accounts cannot be delegated by its directors. [ 25 ] Even assuming that after this long process, Mr. Batah had succeeded in proving that Mr. Tomassi is a de facto director of EJ – which he has not – it would still be a far cry from establishing that Mr.

Tomassi is personally liable for EJ’s obligations. [ 26 ] The only basis for Mr. Tomassi being sued personally is found in Mr. Batah’s response and plea to the cross-demand, where he pleads that Mr. Tomassi manipulated him and used him as his personal “ homme de main ”. These allegations are not supported in any

way by the evidence presented to the Court. [ 27 ] There is not even a single allegation in Mr. Batah’s proceedings that Mr. Tomassi guaranteed EJ’s obligations [5] , that he committed a fault [6] , that he failed in his duty to honour any personal contractual undertaking towards Mr. Batah [7] , or that he used EJ to dissemble fraud, abuse of right or contravention of a rule of public order [8] . There was not a shred of evidence adduced at trial to that effect. [ 28 ] If the mere fact that he is a de facto director of EJ – which he is not – makes Mr. Tomassi liable for Mr.

Batah’s claim – which is a preposterous proposition [9] – why was Mr. Murray not sued as well? [ 29 ] The Court sees no other reason for suing Mr. Tomassi than to use his fear of having his name in the news again, in order to coerce him to surrender and pay up without a fight. This is the type of nuisance that the legislature had in mind when it amended the Code of Civil Procedure in 2009 to add sections 54.1 and following [10] . [ 30 ] Additional evidence of this motivation stems from the demand letter sent by Mr.

Batah on September 1, 2014, in which he writes “ I know that you value your reputation and your credit rating .” Why would Mr. Batah refer to Mr. Tomassi’s reputation and credit rating in connection with a debt owed to him by EJ? [ 31 ] The same disregard for Mr. Tomassi’s private life is apparent from the filing into the Court record of a copy of Mr. Tomassi’s credit card, and the objection by Mr. Batah’s counsel at trial to the placing under seal of this exhibit. [ 32 ] The Court concludes that intention to cause harm to Mr. Tomassi has been demonstrated on a balance of probabilities.

This clearly is a case where an abuse has been committed through the introduction and the conduct of proceedings. [ 33 ] What should have been a very simple, straight-forward action on account by Mr. Batah against EJ has been blown completely out of proportion, all because Mr. Tomassi, without any cause, was sued personally. Twenty-five exhibits, including EJ’s internal financial statements and, as mentioned above, Mr. Tomassi’s personal credit card, were produced in support of Mr. Batah’s proceedings.

The trial lasted three full days. [ 34 ] Such an abuse constitutes a fault and its author is liable for the damages thereby caused to his victim [11] . Mr. Tomassi should never have been sued in this case, and it is the Court’s conclusion, based on the above, that Mr. Batah knowingly dragged him before the Court anyway. [ 35 ] Had Mr. Batah not committed this fault, Mr. Tomassi would not have had to pay legal fees in the amount of $5,273.03 to his attorney. This expense is a direct damage caused by Mr. Batah’s proceedings against Mr. Tomassi, for which Mr. Batah is liable. [ 36 ] Mr.

Tomassi is also entitled to compensation for the trouble and inconvenience which Mr. Batah has caused him by instituting these baseless proceedings. The Court has seen first-hand how genuinely painful the trial has been for Mr. Tomassi. The Court thus arbitrates this compensation to the sum of $2,500.00. [ 37 ] Finally, punitive damages will also be awarded, as Mr. Batah’s proceedings, in particular the filing of Mr. Tomassi’s credit card and the objection at trial to its placing under seal, demonstrate an unlawful and intentional interference with Mr. Tomassi’s right to respect for his private life [12] .

It is clear that Mr. Batah had “ full knowledge of the immediate and natural or at least extremely probable consequences that his (…) conduct [would] cause ” [13] . [ 38 ] The attribution of punitive damages is governed by

section 1621 CCQ, which provides as follows: Where the awarding of punitive damages is provided for by law, the amount of such damages may not exceed what is sufficient to fulfil their preventive purpose.

Punitive damages are assessed in the light of all the appropriate circumstances, in particular the gravity of the debtor's fault, his patrimonial situation, the extent of the reparation for which he is already liable to the creditor and, where such is the case, the fact that the payment of the damages is wholly or partly assumed by a third person. [ 39 ] In light of these criteria, and in particular the extent of the reparation for which Mr. Batah is already liable with regard to moral damages and Mr. Tomassi’s legal fees, these punitive damages are arbitrated to the sum of $500.00.

Les Entreprises EJ Electric Ltd. [ 40 ] If anyone owes anything to Mr. Batah, it is EJ. Whether or not EJ has a valid defence to Mr. Batah’s claim, in whole or in part, is beside the point. Clearly, Mr. Batah’s proceedings against EJ are not abusive and their introduction does not constitute a fault. [ 41 ] This is sufficient to dispose of EJ’s claim for legal fees paid to its attorney. [ 42 ] As regards its claim for loss of productivity and fees paid to another IT consultant, the testimonies of John Casacalenda and Alain Guitard confirm that Mr.

Batah opposed no resistance whatsoever when he was asked to give access to EJ’s website hosted by Mr. Guitard’s company. This portion of EJ’s claim must therefore also fail. [ 43 ] The balance of EJ’s claim, in the amount of $30,000.00, for damages to its reputation, loss of a client and punitive damages, really is predicated on the same fact, to wit, Mr. Batah falsely naming Tony Tomassi as a director of EJ in the proceedings. [ 44 ] In Prud’homme c.

Prud’homme [14] , the Supreme Court of Canada writes: Based on the description of these two types of conduct, we can identify three situations in which a person who made defamatory remarks could be civilly liable. The first occurs when a person makes unpleasant remarks about a third party, knowing them to be false. Such

remarks could only have been made maliciously, with the intention to harm another person. The second situation occurs when a person spreads unpleasant things about someone else, when he or she should have known them to be false. A reasonable person will generally refrain from giving out unfavourable information about other people if he or she has reason to doubt the truth of the information. The third case, which is often forgotten, is the case of a scandalmonger who makes unfavourable but true statements about another person without any valid reason for doing so. [ 45 ] Given the Court’s conclusion that Mr.

Tomassi is not a director of EJ and that nothing in the evidence tends to demonstrate that he is, the defamation which Mr. Batah is accused of would fall within one of the first two categories identified by the Supreme Court in this excerpt. We also see that the information conveyed by Mr. Batah, in order to be considered defamatory, must, by nature, be unpleasant or unfavourable. As regards EJ, is this the case of the allegation that Mr. Tomassi is its de facto director? [ 46 ] In light of EJ’s clients’ and business relations’ reactions to the

article in the Journal de Montréal , as reported by Mr. Murray’s non-contested testimony, the Court considers that the answer to this question is yes. [ 47 ] It is also obvious that Mr. Batah was well aware of the negative impact his allegations would potentially have on EJ’s business. This is illustrated, inter alia , by a demand letter sent to Messrs. Tomassi and Murray on September 2, 2014, where Mr.

Batah’s attorney writes that unless his client receives payment, his instructions are to inform Davaco and the latter’s abovementioned important client of the “situation”. [ 48 ] This intentional infringement of EJ’s right to the protection of its reputation gives rise to its claim for punitive damages [15] . However, the Court considers that given the moral stigma resulting from the mere condemnation of Mr. Batah to punitive damages in favour of EJ, a nominal amount is sufficient to ensure the deterrent effect thereof. Further, both Mr. Tomassi and Mr.

Batah testified that the latter’s financial situation was not particularly enviable at the time of EJ’s project in British Columbia. No proof was made that this situation has considerably improved since. Additional significant monetary punishment therefore appears unnecessary. In accordance with the criteria set out in

section 1621 CCQ, punitive damages awarded to EJ will thus be fixed at $10.00. [ 49 ] As regards compensatory damages, EJ is only entitled to compensation up to the prejudice it actually suffered as a result of Mr. Batah’s fault. [ 50 ] On this, Mr. Murray testified that he was successful in comforting and reassuring most, if not all of EJ’s clients, including Davaco. Despite the threat in the demand letter from Mr. Batah’s attorney, no evidence establishes that Davaco’s important client was informed of the “situation”.

As regards EJ’s new client which was lost after only one contract, no proof was made of the net current value of future contracts which EJ would have obtained had it not been for Mr. Batah’s false allegations [16] . It was EJ’s burden to make that proof, on a balance of probabilities [17] . EJ’s claim for compensatory damages must thus also fail. Peter Batah [ 51 ] In support of his claim for damages, Mr. Batah’s counsel argues that the mere filing by EJ and Mr. Tomassi of: (

a) a motion to strike allegations and remove Mr. Tomassi from the suit, and (

b) a plea and cross-demand for abusive proceedings – was, in itself, abusive. [ 52 ] This is a most surprising statement. [ 53 ] In the landmark case on abuse of proceedings [18] , the Court of Appeal writes: [75] À l'opposé, l'abus du droit d'ester en justice est une faute commise à l'occasion d'un recours judiciaire. C'est le cas où la contestation judiciaire est, au départ, de mauvaise foi, soit en demande ou en défense. Ce sera encore le cas lorsqu'une

partie de mauvaise foi, multiplie les procédures, poursuit inutilement et abusivement un débat judiciaire. Ce ne sont que des exemples. À l'aide d'hypothèse, Baudouin et Deslauriers cernent la nature de l'abus du droit d'ester en justice : Fondement – La première hypothèse est celle où l'agent, de mauvaise foi, et conscient du fait qu'il n'a aucun droit à faire valoir, se sert de la justice comme s'il possédait véritablement un tel droit. Il n'agit pas alors dans le cadre de l'exercice ou de la défense de son droit, mais totalement en dehors de celui-ci.

Une faute peut également être reprochée à l'agent qui, dans l'exercice d'un droit apparent, utilise les mécanismes judiciaires ou procéduraux sans cause raisonnable ou probable, sans motif valable, même de bonne foi. Tel est le cas de celui qui fait arrêter une personne sur de simples soupçons qu'une enquête rapide aurait suffi à dissiper. La mauvaise foi (c'est-à-dire l'intention de nuire) ou la témérité (c'est-à-dire l'absence de cause raisonnable et probable) restent donc les bases de l'abus de droit dans ce domaine.

Contrairement à l'observation faite à propos du droit de propriété, il paraît difficile, sinon impossible, de concevoir un abus du droit au recours judiciaire dont le fondement ne serait pas une faute civile, mais le seul exercice antisocial du droit. Il ne saurait, en effet, y avoir abus lorsque, de bonne foi, et en ayant cause raisonnable et probable, un individu cause préjudice à autrui en recourant à la justice pour faire valoir ses droits.

Ainsi, selon nous, celui qui utilise les recours que la loi met à sa disposition, dans un but strictement et exclusivement égoïste, mais de bonne foi et non témérairement, ne peut être tenu responsable des conséquences fâcheuses de son acte pour son adversaire. [ 54 ] First, it certainly was not abusive on the part of Mr. Tomassi to contest the claim formed against him, as it was completely unfounded. [ 55 ] Did EJ commit an abuse merely by contesting Mr. Batah’s claim? To establish this, Mr.

Batah needed to prove on a balance of probabilities that EJ knew that it had no valid defence and that every cent he claimed was owed to him. This proof has not been made. [ 56 ] EJ’s contestation of Mr. Batah’s claim is not at all comparable with the abovementioned examples given by the Court of Appeal. As will be further discussed below, EJ’s contestation was a serious one, and it gave rise, inter alia , to a bona fide debate on the question of Mr. Batah’s weekly remuneration agreed to by EJ. * * * * * *

[ 57 ] So at long last, let us now finally turn to the core of Mr. Batah’s claim. [ 58 ] The first portion of the claim, in the amount of $3,667.70, pertains to the development of an application allowing EJ to carry out surveys of the existing installations in the stores prior to performing its electrical work. This IT work was done well before Mr. Batah was hired to be Mr. Tomassi’s “eyes and ears” and traveled to British Columbia [19] . [ 59 ] Mr. Batah’s testimony about these services was not seriously contradicted.

The application was delivered and nothing indicates that it is not functional. [ 60 ] The second portion of Mr. Batah’s claim, in the amount of $9,198.00, relates to his remuneration for the services rendered to EJ while he was in British Columbia [20] . [ 61 ] The Court retains from the testimonies of Mr. Daniel Savard, Mr. Murray and Mr. Tomassi that what prompted Mr. Batah to leave British Columbia was an argument he had with Mr. Murray after he had failed to attend an important conference call with Davaco. However, EJ did not demonstrate what actual damages it suffered as a result of this sudden departure.

On the contrary, when Mr. Batah informed Mr. Tomassi of his departure, EJ paid for his flight and made no mention of him causing any prejudice or otherwise being in default under his contract [21] . [ 62 ] Mr. Batah rightfully emphasises that there is very little, if anything, in the abundant documentary evidence to support EJ’s allegation that from the moment he arrived in British Columbia until the moment he left, his performance was not entirely satisfactory. It was EJ’s burden to demonstrate, on a balance of probabilities, that Mr. Batah had not fulfilled his contract [22] .

This burden was not discharged. [ 63 ] However, it appears that Mr. Batah’s weekly remuneration initially agreed to went up, in his invoices to EJ, from $2,000.00 to $3,000.00 per week, from the second week of his stay in British Columbia onwards. [ 64 ] Mr. Batah says that EJ accepted this increase. He refers to a text message from Mr. Tomassi, following an exchange in which Mr. Batah complains about the long hours and very hard work he puts in, where Mr. Tomassi writes “ are we OK with 3000 a week .” [23] Mr.

Batah also notes that EJ paid his first few bi-weekly invoices at the increased rate [24] . [ 65 ] EJ argues that these first invoices were paid by error. Mr. Murray says he had left pre-signed cheques in Montreal and it was the office’s bookkeeper who took it upon herself to pay Mr. Batah’s invoices at the new rate. Mr. Tomassi recognizes that he did speak to Mr. Murray about the increase he had discussed with Mr. Batah, but that Mr. Murray never gave him his approval. Mr. Tomassi says he did not have the authority to grant Mr. Batah an increase without Mr.

Murray’s consent. [ 66 ] The Court does not believe that Mr. Tomassi, an experienced businessman, would offer someone a 50% increase, in writing, without underlining that the offer is not a firm one. The Court rather believes that Mr. Tomassi was duly empowered to make that sort of executive decision and that the payment of Mr. Batah’s invoices was not an oversight. [ 67 ] In any event, Mr. Batah had the right to rely on the assumption that Mr. Tomassi did have this authority and whether or not he did is not opposable to Mr. Batah, in application of the “indoor management” rule [25] . [ 68 ] Finally, Mr.

Batah’s contract provided for an $80 per day food allowance for the duration of his stay in British Columbia, which lasted fifty days. He only received $3,360.00, leaving an unpaid balance of $640.00 which EJ owes him [26] . FOR THE FOREGOING REASONS, THE COURT: GRANTS Peter Batah’s “ requête introductive d’instance amendée ”, in part; CONDEMNS Les Entreprises EJ Electric Ltd. to pay $13,505.70 to Peter Batah, with interest at the legal rate plus the additional indemnity of

section 1619 of the Civil Code of Québec since September 29, 2014; DISMISSES Peter Batah’s “ requête introductive d’instance amendée ” as regards Tony Tomassi and the “ réponse et défense reconventionnelle et demande en dommages intérêts ” as regards both defendants; GRANTS the defendants’ “amended defence and cross-demand ”, in part; CONDEMNS Peter Batah to pay $8,273.03 to Tony Tomassi, with interest at the legal rate plus the additional indemnity of

section 1619 of the Civil Code of Québec since September 10, 2014; CONDEMNS Peter Batah to pay $10.00 to Les Entreprises EJ Electric Ltd., with interest at the legal rate plus the additional indemnity of

section 1619 of the Civil Code of Québec since September 10, 2014; WITH COSTS. __________________________________ VINCENZO PIAZZA, J.C.Q. Mtre Marc E. Barchichat Attorney for the Plaintiff

Mtre Jamie Benizri Legal Logik inc. Attorney for the Defendant Hearing dates : June 17, 18 and 19, 2015 [10] An Act to amend the Code of Civil Procedure to prevent improper use of the courts and promote freedom of expression and citizen participation in public debate , S.Q. 2009, ch. 12. See also Savoie c. Thériault-Martel , 2015 QCCA 591 ; V Interactions inc. c. Syndicat des employées et employés de l'ingénierie de TQS inc. (FNC-CSN) , 2013 QCCS 485 .