2011 QCCQ 2401, 2011 QCCQ 2401

Zales c. Go-Remit inc. 2011 QCCQ 2401 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-32-120386-091 DATE: February 15, 2011 ______________________________________________________________________ BY THE HONOURABLE SUZANNE HANDMAN, J.C.Q. ______________________________________________________________________ JUANITO ZALES JR. […] Pointe-Claire (Québec) […] Plaintiff v.

GO-REMIT INC. -and- DAVID NOWAK 313, Dauphin D.D.O. (Québec) H9G 1W5 Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Juanito Zales Jr. is claiming $2,000 from Go-Remit inc. and David Nowak. He alleges they took his funds but failed to transfer money, which Go-Remit agreed to do. The evidence: [ 2 ] David Nowak operated a global payment processing business called Go-Remit, which transferred funds primarily to customers in the Philippines. [ 3 ] In October 2009, Mr.

Zales gave Go-Remit $2,000 in cash to be sent to the Philippines, to his sister, who was ill. This service specializes in money transfers and offers a better rate than a transfer through a bank or another financial institution. [ 4 ] In July 2010, Mr. Zales learned that the funds he sent were never transferred. Despite his attempts to contact Mr. Nowak, he was unable to reach him. [ 5 ] Mr. Nowak admitted that his company had received the funds. He claimed his company had been robbed in September 2009, and as a result, it had lost $40,000 and Mr.

Nowak was attempting to credit all his victims. [ 6 ] On November 6, 2009, Mr. Nowak sent a letter to all clients, advising them that Go-Remit was temporarily closed; it had suffered a robbery. He added that since then he has been personally funding outstanding transactions and seeking financial aid. He intends to credit his clients' remittance as soon as possible. [ 7 ] His business is no longer operating. Mr. Nowak is doing deliveries and attempting to make a career as a consultant in the area of financial compliance.

Analysis: [ 8 ] There is no dispute that Mr. Zales remitted funds to Go-Remit to be transferred to the Philippines and the money was not sent. [ 9 ] The liability of Go-Remit is clear. It failed to respect its contractual obligations and it must remit the funds it received. [ 10 ] Mr. Nowak has also been sued. Mr. Nowak, the founder and director of Go-Remit, acknowledges that Mr. Zales has the right to obtain his funds but submits that Mr. Zales contracted with Go-Remit and not with him and therefore he is not personally responsible. [ 11 ] It is exact that Mr.

Zales concluded his agreement with Go-Remit and not with Mr. Nowak. In such a case, normally recourse is only against the corporate entity. Administrators and shareholders are not civilly responsible for a company's failure to respect a contract.

In the absence of a fraud, abuse of a right or bad faith, the distinct corporate identity of an enterprise must be respected. [ 12 ] However, administrators and shareholders can incur their extra contractual responsibility independently of a company's violation of its obligations, if it is established that there was bad faith, abuse of a right or fraud was committed. [ 13 ] In the present case, Mr. Nowak was aware that his company was insolvent and could not offer the services sought. However, Mr. Nowak did not advise Mr. Zales of these facts; rather he accepted the funds from Mr. Zales. [ 14 ] Mr.

Nowak failed to transfer Mr. Zales' money to the Philippines but used the funds for other purposes. He either kept the money or took it to repay the victims of the September 2009 robbery, in violation of the purpose for which the funds were provided. [ 15 ] Mr. Nowak acted in bad faith and accepted funds from Mr. Zales under false pretenses, abusing Mr. Zales' confidence. Such behaviour is abusive. [ 16 ] In these circumstances, the Court finds that Mr. Nowak, in the exercise of his functions, caused prejudice to Mr.

Zales and is therefore solidarily responsible together with Go-Remit for reimbursing the amount of $2,000 to Mr. Zales. [ 17 ] Given the financial difficulties Mr. Nowak is suffering, the Court orders the payment of $2000 be made in instalments of $400 per month, beginning on April 1, 2011, with the last instalment being remitted on August 1, 2011.

FOR THESE REASONS, THE COURT: GRANTS the action of Juanito Zales; CONDEMNS Go-Remit Inc. and David Nowak solidarily to pay Juanito Zales the sum of $2,000, payable in installments of $400 on the first day of every month, beginning on April 1, 2011 and ending with the payment on August 1, 2011, plus interest at the legal rate and the additional indemnity foreseen by

section 1619 of the Civil code of Quebec since October 25, 2009, plus judicial fees of $99. __________________________________ SUZANNE HANDMAN, J.C.Q. Date of hearing: January 11, 2011