2016 QCCQ 2025, 2016 QCCQ 2025

Lighthouse Electrics Inc./Phare Électrique inc. c. 675762 Canada inc. 2016 QCCQ 2025 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-140540-131 DATE: March 16, 2016 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ LIGHTHOUSE ELECTRIC INC. /LE PHARE ÉLECTRIQUE INC. 4680, Kent Montréal (Québec) H3W 1H1 Plaintiff v.

6758762 CANADA INC. 376, Avenue Victoria, #240 Westmount (Québec) H3Z 1C3 and DAVID LISBONA […] Côte Saint-Luc (Québec) […] and SIMON ROTHCHILD […] Westmount (Québec) […] and ROTHCHILD EQUITIES LTD.

C.P. 655, Victoria Station Westmount (Québec) H3Y 1B3 Defendants and SIMON ROTHSCHILD […] Westmount (Québec) […] Impleaded Party ______________________________________________________________________ JUDGMENT ______________________________________________________________________ PARTIES AND PROCEEDINGS [ 1 ] The Plaintiff, Lighthouse Electric Inc., sues for unpaid invoices for electrical installations carried out by electricians in its employ, in a building located at 376 Victoria Ave in Westmount, Quebec, owned by the Defendant 6758762 Canada Inc. [ 2 ] The amount claimed in the original Application dated November 6, 2013 was $ 11,878.34 plus interest.

In January 2015, the Plaintiff filed an amended version increasing the amount to $ 15,000, the monetary limit in the Small Claims Division at the time. Such amendments are not allowed, as the change to the monetary limit does not apply retroactively to cases where, before January 1, 2014, a plaintiff had reduced his claim to the then applicable monetary limit of $ 7,000. [ 3 ] The work performed is described in a series of invoices in February, November and December 2010. The sum of the bills before interest is $ 15,878.34, to which a deposit of $ 4,000 is credited.

This gives the balance of $ 11,878.34 initially claimed.

[ 4 ] All of the bills name the client as Rothchild Equities Ltd. [ 5 ] The Application named as Defendants Simon Rothschild, Rothchild Equities Ltd, 6758762 Canada Inc. and David Lisbona. Mr Lisbona is one of the shareholders of 6758762 Canada Inc. and was, at the time of the events, involved in the management of the business. [ 6 ] Lighthouse discontinued its case against Simon Rothchild and Rothchild Equities Ltd. because of difficulties in locating these Defendants, not because it did not consider them to be liable.

Lighthouse Electric Inc. also published a legal hypothec against the immovable, but did not institute any proceedings in that respect. [ 7 ] 6758762 Canada Inc.'s Defence is that it has no legal relationship with Lighthouse Electric Inc. [ 8 ] 6758762 Canada Inc also impleaded Simon Rothschild, alleging that he was its "subcontractor" and not an owner, partner or employee.

It alleges that Simon Rothschild committed frauds, both on Lighthouse Electric Inc. and on itself, as he had no authority to bind the owner of the building to a contract with Lighthouse Electric Inc. [ 9 ] The correct spelling is apparently Rothschild, through the invoices and the proceedings brought by Lighthouse Electric Inc. use the name "Rothchild". [ 10 ] 6758762 Canada Inc., through Mr Lisbona, states that Mr Rothschild was engaged to carry out construction to bring the building up to standards and that, in that project, he acted autonomously, having held himself out to be an engineer competent with respect to electricity.

He was paid on a retainer basis. He was not a partner in the project, neither a co-owner of the buildings, nor was he an employee. [ 11 ] Mr Lisbona refers to him as a "subcontractor" of 6758762 Canada Inc., but what is really meant is that he was providing a service: that of improving the building, including installation of a new alarm system and other electrical works. This implies that a contractor like Lighthouse Electric Inc. would be a subcontractor of Mr Rothschild, therefore not in a contractual relationship with the owner of the building, 6758762 Canada Inc.

ISSUE [ 12 ] The question to decide in this case is whether Lighthouse Electric Inc. has a contractual right to be paid its invoices against either of the remaining Defendants, 6758762 Canada Inc. or Mr Lisbona. FACTS [ 13 ] The principal of Lighthouse Electric Inc., Noam Karni, was contacted by Simon Rothschild to carry out the specific works detailed in the invoices. According to Mr Karni, Mr Rothschild told him that he was one of the partners in the venture, with David Lisbona.

If this were true, then it would be plausible that Rothschild, or the corporate entity that he was apparently connected to, Rothschild Equities Ltd., could have the authority to enter into contracts on behalf of the owner of the building. [ 14 ] Mr Karni did not bill the true owner being under the impression that he should bill Mr Rothschild's company. [ 15 ] Mr Karni states in his testimony that David Lisbona, whom Rothschild would frequently refer to as his partner, was aware of the work, at times came to see it, and that on one occasion reassured him that he would be paid. [ 16 ] Mr Karni believed he was a partner in the project working jointly with Mr Lisbona, because Mr Rothschild told him this, but also because of Mr Rothschild's presence in the office from which the project was directed, that of Mr Lisbona, where Rothschild had a desk and the name of his company on the door.

He seemed to be sharing the services of the secretary. It was in this office that the access cards were processed and that was one of Mr Rothschild's functions. [ 17 ] In a written statement in lieu of testimony filed (P-8), Shaul Gotkin, a worker in the employ of Lighthouse Electric Inc. at the time, gives his impressions of the situation when he visited the premises for certain emergency calls. He supports several of the elements of Mr Karni's testimony, that Mr Lisbona and Mr Karni shared the same office, with the same secretary to whom papers could be handed over or messages given and access cards obtained.

He recalls one specific event where Mr Lisbona came to see and enquire about work being carried out and its cost. He recalls other times when Mr Lisbona contacted Mr Karni. [ 18 ] Mr Lisbona, whose testimony was equally credible on these points, denied ever stating that Rothschild was a partner, which he was not, nor hearing this said: he says that he would not tolerate such talk that was simply not true.

He admits that he may have been present on the worksite, which is not unusual since he represented the owner. [ 19 ] He admits that Mr Rothschild was given a workspace in the office that was the headquarters of 6758762 Canada Inc. and other concerns of the partners in the Victoria Avenue property, and that he was allowed to put up his nameplate, Rothschild Equities Ltd., on one of the entrance doors. He carried out business activities of his own from this workspace, as well as conducting the management of the construction project for 6758762 Canada Inc.

He acknowledges that Rothschild was given the task of issuing the access cards to tenants and to contractors. He had been instrumental in setting the system up. [ 20 ] He denies that Rothschild was allowed to have the benefit of any secretarial services. But the testimony of Mr Karni, corroborated by Mr Gotkin, is preponderant, on this point. [ 21 ] He made one singular admission, regarding the failure to respect the RBQ licensing requirements: he used the expression "fast and loose with the RBQ".

In other words, as the owner of a building renovation project, the requirement that contractors be properly licensed was ignored by 6758762 Canada Inc., if we consider Mr Rothschild to be a contractor.

[ 22 ] Mr Rothschild was not a contractor holding an RBQ license, nor did he hold himself out to be. Unless he was an owner of the building or the mandatary thereof, he was not authorised to carry out construction work directly or by subcontractors working for him. This was a failure to respect legislation that is of public order. [ 23 ] Despite this, Mr Rothschild had been given the right to decide what work was to be done, to provide the contractors to do it, and to manage the project completely.

It seems he also did work for tenants with respect to their improvements of the spaces rented. [ 24 ] Since he could not be considered as a legitimate contractor by someone such as Lighthouse Electric Inc. who knows the building industry and the nature of the licences required, presuming good faith, he would have been perceived as either a partner in the project or as having been hired by the partners as their mandatary, because he was engaging contractors like Lighthouse, to do the work, apparently for the owners. [ 25 ] In a letter he wrote to Mr Karni after the payment was in default, he refers to the "partners of 376 Victoria Holdings" as "our client" and complains that Mr Karni has directly contacted "our client".

This is consistent with the notion that the contract is between Lighthouse and the "we" to which Rothschild is referring to now as "Groupe Rothschild (Canada)". [ 26 ] This contradicts the notion that Mr Rothschild was himself an owner, but this was much later, when excuses were being found not to pay. It does not contradict the testimony that Mr Karni gives that, at the time of the work being requested, Rothschild held himself out to be part of the ownership. [ 27 ] In reality though, Rothschild’s relationship with the owner was that of a sort of turnkey unlicensed general contractor.

If this arrangement had been made with a recognized general contractor acting openly as such, then Lighthouse could not assert a contract with the owners. He would not have thought that he had been dealing with them because he would have been a subcontractor to a legitimate general contractor. [ 28 ] Mr Rothschild was not, in fact, a mandatary of 6758762 Canada Inc.: he was paid to provide a result, by hiring and paying directly the work force required to get the work done. But can he be considered as the apparent mandatary of 6758762 Canada Inc.?

The law recognises that a contract binds a party when it is entered into on its behalf by its mandatary or by a person that is its apparent mandatary. The Civil Code of Quebec (“C.c.Q.”) states this principle in terms of “allowing it to be believed”: Art. 2163.

Where a person has allowed it to be believed that another person was his mandatary, he is liable, as if there had been a mandate, to a third person who in good faith has contracted with that other person, unless he took appropriate measures to prevent the error in circumstances in which it was foreseeable. [ 29 ] 6758762 Canada Inc. is not a party to the deceit of Mr Rothschild: its principle, David Lisbona was equally taken in by him, it would seem.

He was a flamboyant character who gave the appearance of being very competent and affluent, throwing a generous party in the holiday season, driving expensive cars etc. It would appear that he did not account to 6758762 Canada Inc for the services rendered in a context where he was prepaid. He has left the province and cannot be found. [ 30 ] There is no proof that Mr Lisbona shared in his dishonest practices that led to Lighthouse's loss.

Mr Lisbona candidly admitted that he did not perform a "due diligence" on Mr Rothschild's qualifications or trustworthiness and that this type of situation is avoided now in the business' practices he adheres to. [ 31 ] The question though is whether things done or said by 6758762 Canada Inc. allowed it to be believed that Rothschild or his company was its mandatary in a situation where Mr Karni believed, in good faith, that he was dealing with the owners through this intermediary. [ 32 ] Independently of the misrepresentations made by Mr Rothschild, the Court retains the following elements that are attributable to 6758762 Canada Inc.: 1.

Mr Rothschild was given a completely free reign in acting as the person responsible for the project, but not as a general contractor, because he visibly could not have been described or perceived as such given our laws applying to the construction industry, nor did he appear to be acting as a general contractor. 2. He appeared to be a person, from among those involved, to whom the owner had delegated the responsibility of engaging contractors. 3.

He was given an office space within the premises from which 6758762 Canada Inc operated, and its secretary seemed to be acting for him in the passing on of documents and messages. He appeared to be carrying out the project's work from this office.

He appeared to be collaborating with 6758762 Canada Inc.’s true representative, David Lisbona, who appeared to give him his confidence. 4. 6758762 Canada Inc delegated to him the task of generating the passes to have access to the building both for the tenants, and for contractors such as Lighthouse, a task that would normally be given to a trusted representative of 6758762 Canada Inc, and not to a general contractor. 5. 6758762 Canada Inc. did nothing to prevent these appearances from contributing to the error that was foreseeable: that Rothschild was acting for the owner of the building when in fact he wasn't.

It simply gave no express information to contradict what was implied. [ 33 ] In the Court's view this is sufficient to establish the application, on the specific facts of this case, of the doctrine of apparent mandate. 6758762 Canada Inc. is responsible for the payment of the amounts owing. [ 34 ] The quantum of the claim is established prima facie by the invoices, and no contradictory evidence was submitted. The claim however is limited to $ 7,000, to which interest at the rate of 18% per annum will be awarded.

[ 35 ] Mr Lisbona is not liable personally because of the principle of limited liability provided at

article 309 of C.c.Q. His legal personality is distinct from that of 6758762 Canada Inc. The exceptions of articles 315 , 316 and 317 C.c.Q. do not apply here, there was no fraud committed by 6758762 Canada Inc., nor by Mr Lisbona who was acting in good faith. [ 36 ] Mr Rothschild, as impleaded party, will be held to indemnify 6758762 Canada Inc. because he acted without actual authority, thus contrary to his contractual obligations. BY THESE REASONS, THE COURT: CONDEMNS the Defendant 6758762 Canada Inc. to pay the Plaintiff the sum of $ 7,000, with interest at the contractual rate of 18% per annum and the additional indemnity provided for in

section 1619 of the Civil Code of Québec , calculated from November 6, 2013; CONDEMNS the Defendant 6758762 Canada Inc. to pay the judicial fees in the amount of $ 218 to the Plaintiff; CONDEMNS the Impleaded party, Simon Rothschild, to indemnify the Defendant 6758762 Canada Inc. for the full amount of this judgment in capital, interest and costs. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: December 8, 2015