2019 QCCQ 6241, 2019 QCCQ 6241

Rénovation Altofab inc. c. Chowdhury 2019 QCCQ 6241 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-704410-184 DATE: October 11, 2019 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI, J.C.Q. ______________________________________________________________________ RÉNOVATION ALTOFAB INC. Plaintiff v. M.A.

HANNAN CHOWDHURY Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Renovation Altofab claims $8,179.77 in damages from Mr. Chowdhury on the grounds that he illegally cancelled, prior to the installation, a contract for the supply and installation of balconies and railings at a building owned by him. Its claim includes $5,679 for the cost of purchasing the materials plus $2,550 representing the profits it lost on other work it was deprived of performing. [ 2 ] Mr.

Chowdhury asserts that the claim is without merit because he was entitled to cancel the contract given that Renovation Alto did not install the balconies and railings within the contractual installation date of November 10, 2017 (“ Completion Date ”). Hence, he argues that he had no other alternative than to contract with a third party to install the equipment because he had received a notice of non- compliance from the City of Montreal enjoining him install new balconies. [ 3 ] For the reasons that follow, the Court concludes that Mr.

Chowdhury was entitled to rescind the Contract given that Renovation Alto committed a serious and substantial fault when it failed to install the materials by the Completion Date. This breach absolves Mr. Chowdhury from the obligation to pay for the damages claimed by Renovation Alto. Issues

a) Was Mr. Chowdhury entitled to rescind the Contract?

b) If he wasn’t, is Renovation Altofab entitled to be compensated for the cost of the materials it purchased prior to Mr. Chowdhury’s cancellation of the Contract and for lost profits? Context [ 4 ] Renovation Altofab is a company that carries out renovation work on residential properties, including the installation of balconies and railings. It holds an itinerant merchant permit issued by the Office de la Protection du Consommateur . [ 5 ] Mr. Chowdhury owns a three storey apartment building in Montreal. [1] [ 6 ] On June 19, 2017, Mr.

Chowdhury receives a notice of non-compliance from the borough of Rosemont-La-Petite-Patrie of the City of Montréal enjoining him to replace the three balconies in the front of the building and the three in the back because the height of the railings does not comply with the City of Montréal By-law concerning the sanitation, maintenance and safety of dwelling units . [2] He must complete this work within 30 days of the notice. [ 7 ] In the following weeks, Mr.

Chowdhury shops around for a balcony and railing vendor/installer and ultimately is referred to Renovation Altofab. [ 8 ] The City’s municipal inspector agrees to extend the deadline to complete the work outlined in the notice of non-compliance. [ 9 ] On September 8, 2017 Renovation Altofab and Mr. Chowdhury enter into an itinerant merchant contract whereby Renovation Altofab agrees to remove the old balconies in the front Mr. Chowdhury’s building, supply and install 3 new balconies, including 42” railings, plus soffits and fascias (“ the Work ”), for a price of $10,500, inclusive of all taxes (“ Contract ”).

The price is to be paid once the Work is completed. [ 10 ] The Contract is signed by Mr. Baillargeon, on behalf of Renovation Altofab.

[ 11 ] The Contract stipulates that the beginning of the Work will commence on October 13 and will be completed by November 10, 2017 (“ Completion Date ”). The box entitled “Special Instructions”, is marked with the word “Rush”. [ 12 ] The Completion Date is important for the client because of the notice of non-compliance received from the City and because the municipal inspector, although he has agreed to extend the deadline to finish the Work, is putting pressure on Mr. Chowdhury to replace the balconies and railings. [ 13 ] By November 2, since Renovation Altofab has not commenced the Work, Mr.

Chowdury calls Mr. Baillargeon to enquire as to when the installation will start. [ 14 ] Renovation Altofab claims that it spoke to Mr. Chowdhury in early November to inform him that it was experiencing delays in receiving the materials from its supplier, and therefore the beginning of the Work would be delayed by 3 weeks. It adds that he agreed to extend the Completion Date. [ 15 ] Mr.

Chowdhury denies he ever agreed to an extension. [ 16 ] On November 10, since he had not heard from Renovation Altofab, he contracted with a third party to have the 3 balconies and railings installed at his apartment building. [ 17 ] On December 1, 2017, Renovation Altofab called Mr. Chowdhury to inform him that it could begin the Work on December 4. [ 18 ] Later in the day, Mr. Chowdhury called Renovation Altofab to cancel the Contract given that the Work was not carried out by the Completion Date. Analysis and Decision

a) Was Mr. Chowdhury entitled to rescind the Contract? [ 19 ] The Contract between Renovation Altofab and Mr. Chowdhury is a contract of enterprise governed by articles 2098 and ff. of the Civil Code of Québec ( C.C.Q . ). It is also governed by the Consumer Protection Act (R.S.Q., ch. P-40.1 ), including the provisions pertaining to itinerant merchant contracts (sections 55-65 of the Act ). [ 20 ] Under the Contract, Renovation Altofab has the obligation to supply and install 3 balconies with railings, soffit and fascia at Mr. Chowdhury’s building by November 10, 2017. [ 21 ] In turn, Mr.

Chowdhury has the correlative obligation to pay Renovation Altofab the price of the work, $10,500 once the equipment is installed. [ 22 ] Mr. Chowdhury argues he should not be obliged to pay anything to Renovation Altofab because he was justified in rescinding the Contract since it failed to honour its duty to install the material by the November 10, 2017, deadline. [ 23 ] Mr. Chowdhury’s contestation calls into play the grounds of defense codified in

article 1591 C.C.Q. called exception for non- performance. This principle is a remedy that allows a party to a bilateral contract to withhold its own performance, accompanied by a right to ward off a claim for such performance, where the other party has failed to perform its obligations under the contract to a substantial degree. [ 24 ] The issue in this case is whether Mr.

Chowdhury validly invokes this ground of defense, which in turn calls for the Court to determine whether he was justified in rescinding the Contract. [ 25 ] Under the Civil Code Québec , the client in a contract of enterprise may terminate the contract using one of two regimes, namely termination for cause ( résiliation sanction ) or unilateral termination ( résiliation unilatérale ). [3] [ 26 ] It is important to determine which termination regime applies because the rights and obligations of the client differ in either one.

For example, if the termination relies on the unilateral termination regime, then the client is obliged to compensate the contractor for value of the work performed before the end of the contract whereas if the contract is rightfully terminated for cause, then the client has no obligation to compensate the contractor. [4] [ 27 ] Unilateral resiliation is governed by articles 2125 and 2129 C.C.Q .

They provide that the client may unilaterally resiliate a contract of enterprise without cause (« unilateral resiliation »), but in turn must compensate the contractor for value of the work performed before the end of the contract, and potentially for his lost profits. [ 28 ] Alternatively, the client may rescind the contract for cause (« résiliation sanction »), in which case the client’s right to terminate is governed by articles 1590 and 1604 to 1606 C.c.Q . [5] [ 29 ] In the present case, the termination regime which applies is the resiliation for cause since Mr.

Chowdhury invokes Renovation Alto’s failure to install the materials in a timely fashion. [ 30 ] Termination for cause is premised on the fact that the contractor committed a substantial fault in the execution of his contractual obligations. [6] The client will be entitled to rescind the contract if he/she proves that the contractor committed a substantial and serious fault in the execution of the contract of enterprise. A default that is of minor importance won’t warrant a resolution of the contract. [7] [ 31 ] Has Mr.

Chowdhury proven that Renovation Alto committed a serious and substantial fault which justified the resolution of the Contract? The Court believes he has.

[ 32 ] A contractor is bound to act in the best interests of its client, with prudence and diligence. He must also act in accordance with usage and good practice and to ensure that the work carried is in conformity with the delays stipulated in the contract [8] . [ 33 ] Renovation Altofab argues that it acted in accordance with the delay stipulated in the Contract because, although the agreement stipulates that the Work was supposed to be completed by November 10, 2017, the parties verbally agreed to extend the deadline by 3 weeks.

Did the parties agree to extend the Completion Date? [ 34 ] Renovation argues that on two occasions (Nov. 2 and 8, 2017) it spoke with Mr. Chowdhury to inform him that its supplier was experiencing delays and that the installation date would be delayed by 3 weeks, thus beyond the November 10, 2017, contract date. It adds that Mr. Chowdhury accepted to extend the delay. [ 35 ] Mr.

Chowdhury categorically denies that he ever accepted to extend the delay on November 2 or 8, or on any other date. [ 36 ] Whether or not the Court believes Renovation Altofab, its argument that the Completion Date was verbally extended is without merit given the express terms of the Contract. [ 37 ] Clause 12 of the Contract (“Demande de modification”) provides that any modification to the Contract must be agreed upon by both parties in writing and signed by both of them. [ 38 ] No such written and signed modification to the Contract varying the November 10, 2017, Completion Date was ever made. [ 39 ] The terms of the Contract bind the parties and the Court must apply them. [ 40 ] Moreover, where a contract contains a modification clause, the parties must rigorously follow its provisions. [9] [ 41 ] Therefore, even if the Court believes Renovation Altofab and concludes that Mr.

Chowdhury verbally agreed to extend the Completion Date, this argument is unfounded given clause 12 of the Contract. [ 42 ] In any event, notwithstanding the modification clause (clause 12), Renovation Altofab does not convince the Court that Mr. Chowdhury verbally agreed to extend the Completion Date. [ 43 ] Renovation Altofab claims that its employee spoke to Mr. Chowdhury on November 2 and 8 and he agreed to extend the Completion Date. [ 44 ] Mr. Chowdhury admits the parties spoke on those dates, but adds that (

i) he initiated the calls to Renovation Altofab each time and (ii) he spoke to Mr. Baillargeon, and no one else. [ 45 ] He first called Mr. Baillargeon on November 2 to enquire about when the installation of the balconies would start since the Completion Date was fast approaching. He claims the call was very short (2 minutes) because Mr. Baillargeon said he could not talk as he was driving and would call him back later. This version of the events is corroborated by the call logs (D-3, D-6 & D-7). [ 46 ] According to Mrs. Malorni, Renovation Altofab’s administrative assistant, she spoke to Mr.

Chowdhury either on November 2 or 8 (she is not sure precisely which of those two dates) and told him that due to delays in receiving the material from its suppliers, the installation date would be delayed 2 or 3 weeks. She recalls Mr. Chowdhury telling her that he had received a notice of infraction from the City of Montreal, but she does not state that he accepted the extension of the delay to begin the installation. [ 47 ] Mr. Chowdhury’s testimony is credible, and, moreover, corroborated by the call logs. His version is more reliable than Renovation Altofab’s witnesses.

The Court prefers his version of the events over Renovation Altofab’s. [ 48 ] Accordingly, the Court concludes that the parties never agreed to extend the Completion Date. Did Renovation Altofab breach the Contract and is this breach significant enough to warrant the resolution of the Contract? [ 49 ] Under

article 1604 C.C.Q. , a party cannot cancel a contract if the breach is of a minor importance. Conversely, if the breach is serious and major, then the client is entitled to cancel the contract. [ 50 ] The Contract provides for a completion date of November 10, 2017. Renovation Altofab knew this date was important for Mr. Chowdhury as the Contract is marked “Rush”. [ 51 ] Moreover, given the notice of non-compliance issued by the City to Mr.

Chowdhury from the Borough, time was of the essence and it was important that Renovation Altofab honour the Completion Date. [ 52 ] The un-contradicted evidence establishes that Renovation Altofab did not complete the installation of the balconies and railings within the deadline stipulated in the Contract (November 10) since, as it admits, it was only able to do so beginning December 4 because of supply constraints. [ 53 ] Renovation Altofab was more than 3 weeks late when it called Mr.

Chowdhury to tell him it could start the Work on December 4. [ 54 ] At this point in time, Renovation Altofab had already materially and substantially breached its obligations under the Contract.

Pursuant to articles 1458, 1590 , 1604 C.C.Q. , Mr. Chowdhury was entitled to rescind the Contract as he did on December 1, 2017. [ 55 ] That said, was Mr. Chowdhury obligated to put Renovation Altofab in default before cancelling the Contract? Mr. Chowdhury does not contest that he never sent Renovation Altofab a demand letter enjoining it to install the balconies and railings. [ 56 ]

Article 1590 C.C.Q. notably provides that “[w]here the debtor fails to perform his obligation without justification on his part and he is in default , the creditor may, without prejudice to his right to the performance of the obligation in whole or in part by equivalence,…. obtain, in the case of a contractual obligation, the resolution…of the contract.” (underlining added). [ 57 ] However, since Mr.

Chowdhury is relying on the exception for non-performance defence to refuse to pay the amounts claimed by Renovation Altofab and is not seeking damages for the contractor’s delay, he was not obligated to put his contractor in default when he rescinded the Contract. [10] In any event, a notice of default would have been superfluous given that Renovation Altofab was already late and in a substantial breach of its obligations and could not have performed them by the Completion Date when the Contract was rescinded. [ 58 ] To conclude, Mr. Chowdhury was legally within his right to rescind the Contract.

Moreover, based on the exception for non- performance defense, he is not obliged to pay Renovation Altofab the cost of materials nor its lost profit. [ 59 ] For this reason, Renovation Altofab’s Application will be dismissed.

b) If he wasn’t, is Renovation Altofab entitled to be compensated for the cost of the materials it purchased prior to Mr. Chowdhury’s cancellation of the Contract and for lost profits? [ 60 ] Given the Court’s conclusion respect to the first question in issue, there is no need for the Court to adjudicate this question. However, the Court will nonetheless make cursory comments on the issue of damages. [ 61 ] Renovation Alto proved that it paid $5,676.47 towards materials it purchased to install the balconies and railings at Mr.

Chowdhury’s building. [11] If its claim had been granted, the Court would have awarded this amount to Renovation Altofab. [ 62 ] As for the claim for $2,500, it was framed as a claim for lost profits and lost time in the Application. At trial, Mr. Perreault explains that it stands for “lost opportunities”, the time incurred by Renovation Altofab to take measurements on the site, and the time incurred by its employees to go pick up supplies. [ 63 ] The Court would not have awarded any amount under this head of damages as no probative proof was made by Renovation Altofab of this alleged loss.

FOR THESE REASONS, THE COURT: [ 64 ] DISMISSES Renovation Altofab Inc.’s claim; [ 65 ] WITH COSTS of $187 payable by Renovation Altofab to Mr. Chowdhury. __________________________________ ENRICO FORLINI, J.C.Q. Date of hearing: June 25, 2019