2012 QCCQ 7869, 2012 QCCQ 7869

Albert c. Maccio 2012 QCCQ 7869 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-22-176678-103 DATE: September 25, 2012 ______________________________________________________________________ BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ LEONARD ALBERT Plaintiff v. RAFFAELE MACCIO Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The plaintiff, Mr.

Leonard Albert, owner of a vacation home situated at 36 Fridolin-Simard, in Esterel, sues the Defendant Raffaele Maccio as tenant under a rental agreement dated July 3, 2009 (P-1) claiming rent at $3,000 a month for the eleven-month period from July 2009 until May 2010. [ 2 ] In his written defence and cross-demand Mr. Maccio admits owing $9,000 representing the rent for July, August and September 2009 and denies owing any further rent.

As well, he seeks by way of cross-demand, recognition that he performed works on the property for the benefit of the plaintiff for a value of $17,285.50 and, through compensation, sees a condemnation for the difference of $8,282.50. [ 3 ] At trial however, the defendant modified his position admitting that he owes $9,000 and renouncing his cross-demand. [ 4 ] The case turns upon the application of the rental agreement (P-1), the text of which was drafted by Mr. Maccio to formalize an agreement he made with Mr.

Albert to occupy the property for the period of July 5, 2009 to October 5, 2009 for the sum of $3,000 per month. Under the heading "Terms and conditions" the parties stipulate that "as for the payment of the rental (36 Fridolin-Simard) Mr.

Leonard Albert will accept in exchange exterior renovations done by Raffaele Maccio." [ 5 ] The renovations are described in terms of three sections to be carried out in the months of July, August and September respectively. [ 6 ] Under another heading " Exterior renovations" the works are described in detail beginning with stripping the existing finish on the exterior wood siding and repainting it, along other miscellaneous and accessory works. [ 7 ] The "Terms and conditions" include the following stipulation: "If the property were to be sold in the time frame while the renovation are taking place. Mr.

Raffaele Maccio will have to oblige by any term attached toward the selling of the property set by Mr Leonard Albert. If there is no interruption fro the sale of the house, and Mr Raffaele Maccio were not to complete his obligation of the stated renovations in full. He would have to pay the amount of the contract (Rental Agreemeet) even if some of the sections were completed.

Mr Raffaele Maccio will be responsible for any clean up or damages that may occur while in usage of the interior of the property" [sic]. [ 8 ] The dispute arises because the works were not completed within the time frame originally agreed to. The works were continued by Mr. Maccio and reached a fairly substantial point but were never completed. The parties ceased having any dealings in May 2010 when Mr. Maccio left the project and no longer had any access to the property as a secondary residence.

Question in Issue [ 9 ] The Court must determine, on the specific facts of this case, whether the rental agreement applies to make Mr. Maccio

responsible for eleven months of rent for the entire period during which he was to carry out works and had the use of the property or, whether his obligation is limited to paying the three months rent associated with July, August and September 2009? Facts [ 10 ] Having signed the agreement P-1, Mr.

Maccio resided at the property as a vacation home for part of the summer and began performing the work contemplated by the agreement. [ 11 ] Both parties state that the rent of $3,000.00 per month reflected the market but, of course, in was never contemplated that any money would be paid because there was no reason to believe that the work would not be completed as planned . [ 12 ] There were, however, some complications. Mr. Maccio states that the City would not permit the use of stripping chemicals and he had to work in a manner that was more environmentally friendly. [ 13 ] Mr.

Albert states that he could have thrown Mr. Maccio off the property because he had not completed the work at the end of the three-month period but, for various reasons, he tolerated the situation until part way through 2010. [ 14 ] Chiefly, he was concerned because he had sold a car to Mr. Maccio and a dispute had arisen involving Mr. Maccio's failure to make certain payments. He hoped that the problem would be resolved and he did not want to threaten the completion of the work so he did not put Mr.

Maccio in default, neither through a written notice nor by any conversation, to call upon him to either complete the work or to leave the premises. [ 15 ] The dispute over the car payments progressed to the stage of a legal proceeding that was eventually settled. [ 16 ] He states that throughout the period of that dispute, Mr. Maccio was to finish the work but that he "kept stalling". [ 17 ] Mr. Maccio continued to use the property from time to time and even paid the cleaning lady as though he were the occupant of the premises. [ 18 ] Mr.

Maccio states that he spend two weeks in the property in the summer months, two weeks at Christmas and one week in Easter 2010 and occasionally on week-ends in between. [ 19 ] He states that because he was not given any written or verbal notification, he had no idea that Mr. Albert would be claiming rent for the period after the three months contemplated by the rental agreement. He interpreted the situation to be such that he could continue to use the property from time to time, that he had more time to complete the work and that there was really no conflict between the parties. [ 20 ] In March 2010, Mr.

Albert asked him to provide two accommodation invoices for income-tax purposes. The first, an invoice for $10,000 dated 04/12/2009 is for $10,000 for works described as "repairing and painting exterior of house wooden slat walls". [ 21 ] Mr. Maccio's understanding was that this accommodation invoice would permit Mr. Albert to obtain a tax credit pertaining to renovations. [ 22 ] The other invoice dated 15/10/2009 is addressed to Wendy Serfaty, Mr. Albert's daughter. It describes the works carried out at the residence, at 115 Westpark in Dollard-des-Ormeaux, Quebec.

These are works that were actually carried out by Mr. Maccio beginning in May 2009 relating to cracks in the foundation of the house and other matters that related to an insurance loss. [ 23 ] Mr. Maccio alludes to these works, which were fairly extensive, as being one of the factors causing him not to complete the work at the Esterel property within the contemplated three-month period. [ 24 ] There is no issue that the works at Esterel remained incomplete although the photographs show that there was some substantial work done.

The accommodation invoice does not provide any accurate assessment of the value of the work. It was determined by the limit of the government tax-credit programme of $10,000. [ 25 ] The Court mentions, in passing, that it does not condone the creation of accommodation invoices for tax purposes when these invoices do not represent the reality of the situation. [ 26 ] In terms of the present case, the value of the work done is not particularly relevant given the parties' stipulations in their agreement.

Analysis The Agreement [ 27 ] Although titled "Rental Agreement" the document is really a construction contract providing for payment corresponding to three months of rent during the three months of the performance contract. Mr. Albert mentioned that if the work had been continued and completed he would not have charged anything for rental; as long as the work was going on he was prepared to allow Mr. Maccio to use the property as a secondary residence.

[ 28 ] The stipulation concerning the payment of rent in the case of the renovations not being completed is extremely onerous and punitive to Mr. Maccio. It provides that, even if the work is partially complete he will nevertheless have to pay the amount of the contract if he does not complete the work in full. [ 29 ] The contract remains silent however for the circumstances of the present case where the work was not completed but there was no putting in default. Putting in default [ 30 ] The right to enforce the performance of an obligation depends upon the debtor being in default. 1590 .

An obligation confers on the creditor the right to demand that the obligation he performed in full, properly and without delay. Where 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. [1] (underlining added) [ 31 ] The rental agreement does not contain any specific provisions concerning default nor was there any extrajudicial demand throughout the period when Mr.

Maccio remained in possession and continued to perform renovations. [ 32 ] In the Court's view, he was only put in default when he himself made clear his intention not to continue to perform the construction obligation as is contemplated in

article 1597 C.C.Q. [2] 1597 . A debtor is in default by the sole operation of law where the performance of the obligation would have been useful only within a certain time which he allowed to expire or where he failed to perform the obligation immediately despite the urgency that he do so.

A debtor is also in default by operation of law where he has violated an obligation not to do, or where specific performance of the obligation has become impossible through his fault, and also where he has made clear to the creditor his intention not to perform the obligation or where, in the case of an obligation of successive performance, he has repeatedly refused or neglected to perform it. (underlining added) [ 33 ] Having not been put in default prior to this point, he was led to believe that Mr.

Albert tolerated his presence in the property and that he also tolerated the work being performed at a slower pace than what was originally contemplated, for whatever reason. [ 34 ] If Mr. Albert had considered him to be in default and had made a clear statement to that effect, Mr. Maccio would have known the works that needed to be completed within a specific time frame in order to correct his default and avoid onerous legal consequences. The requirement of good faith [ 35 ] By not saying anything, Mr.

Albert did not conduct himself in accordance with the obligation of good faith that is the essence of all contracts: 1375 . The parties shall conduct themselves in good faith both at the time the obligation is created and at the time it is performed of extinguished. [3] [ 36 ] Mr. Albert was quite candid about his reasons for not putting Mr. Maccio into default: he wanted to collect as much as possible on the payments he was claiming for the car. He even delayed the dispute relating to the car so that the dispute would not come to a head and threaten the progress of the work. [ 37 ] If Mr.

Albert had stated his true intentions, it is obvious that Mr. Maccio would have ceased using the property and stayed exclusively in his ordinary residence.

He would have known at that stage the ultimate period within which he was to complete the work. [ 38 ] This was extremely important because of the penal nature of the clause providing for no compensation between rent and the construction obligation if the renovations were not brought to completion. [ 39 ] Given the extremely punitive nature of those provisions, it would not have been fair to extend them to include $33,000 of rent because of the prolongation of the project prior to its completion.

Interpretation of contracts [ 40 ] The Court is mindful of

article 1434 C.C.Q. 1434 . A contract validly formed binds the parties who have entered into it not only as to what they have expressed in it but also as to what is incident to it according to its nature and in conformity with usage, equity or law. [4]

[ 41 ] It is not a correct

interpretation of the agreement to extend the situation whereby Mr. Maccio forfeits any right to payment for the construction services by way of compensation for rent in such a way that he becomes responsible for rent beyond the three months that were originally contemplated in the agreement. [ 42 ] It is possible for the Court to interpret the agreement by reference to the parties' conduct after the contract was formed: 1426 . In interpreting a contract, the nature of the contract, the circumstances in which it was formed, the

interpretation which has already been given to it by the parties or which it may have received, and usage, are all taken into account. [5] [ 43 ] Mr. Albert said nothing during the fall and winter 2009-2010 and admitted to the Court that he did not want to rock the boat, so to speak, by making the situation conflictual for fear that he would not be able to collect the car payments. In so doing, Mr.

Albert acted in a way that is contrary to the application of the agreement that he now seeks. [ 44 ] It was only in November 2010 that he sent a demand letter which claimed rent for the period from July 2009 to May 2010. [ 45 ] If he had really expected payment of rent for any period after September 2009 he would not have waited so long before claiming it. Conclusion [ 46 ] Mr. Maccio's defence is that he be condemned to the payment of the three-months rent that the agreement contemplates if the work is not completed. This is punitive to Mr.

Maccio because the work that he provided has some appreciable value, perhaps even the $10,000 that he was asked to state in the accommodation invoice. These onerous effects of the contract are nevertheless biding upon him. The fact that he drafted the contract demonstrates that he entered into it freely. [ 47 ] Beyond that concession, however, there is no basis on which the Court would condemn him to any additional amount.

FOR THESE REASONS THE COURT: GRANTS the plaintiff's action in part; CONDEMNS the defendant to pay to plaintiff the sum of $9,000 with interest at the rate of 5% per annum and the additional indemnity pursuant to the provisions of

article 1619 of the Civil Code of Quebec , from the date of service of the proceedings. DISMISSES the cross-demand; THE WHOLE with costs. __________________________________ DAVID L. CAMERON, J.C.Q. Me Dominic Bianco Mercadante, Di Pace Attorney for plaintiff Date of hearing: June 14, 2012