2017 QCCQ 4218, 2017 QCCQ 4218

Sarti c. Ceiba Entreprise Inc. 2017 QCCQ 4218 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division N°: 500-32-149437-156 DATE: April 26, 2017 ______________________________________________________________________ BY THE HONOURABLE VINCENZO PIAZZA, J.C.Q. ______________________________________________________________________ PAMELA SARTI and CEDRICK KLUYSKENS Plaintiffs v.

CEIBA ENTREPRISE INC. and DUNCAN MCLEAN Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Mr. Kluyskens and Ms. Sarti contend that they paid Ceiba Enterprise Inc. (“Ceiba”) $16,904.78 more than what had been agreed to, for renovation and construction work on their home. In order to proceed before the Small Claims Division of the Court, they have reduced their claim to $15,000.00. [ 2 ] Mr. Kluyskens and Ms.

Sarti aver that their contract with Ceiba provided that they would pay Ceiba’s actual costs, plus a 15% margin, and the applicable provincial and federal sales taxes. [ 3 ] They say that in its invoicing, instead of multiplying its costs by 1.15, Ceiba divided them by 0.85, which results in a 17.64% margin. [ 4 ] In addition, Ceiba did not credit the ITCs and ITRs against the sales taxes that it paid on its inputs [1] before calculating its margin, and then charged these taxes once more on the total thus obtained. [ 5 ] This example, using a supply purchased at the initial price of $100.00, illustrates the practical difference between the results of Ceiba’s method of invoicing, as opposed to that favored by Mr.

Kluyskens and Ms. Sarti: 5.1. Ceiba’s method: Initial price + GST + QST + Margin (÷ 0.85) + GST + QST = Total $100.00 $5.00 $9.98 $20.29 $6.76 $13.49 $155.52 5.2. Mr. Kluyskens and Ms. Sarti’s method: Initial price + Margin (x 1.15) + GST + QST = Total $100.00 $15.00 $5.75 $11.47 $132.22 [ 6 ] In their joint contestation, Ceiba and its principal, Mr. McLean, plead that the work has been invoiced in accordance with the contract, that the invoices were reviewed every week by Mr. Kluyskens and Mr. McLean and that these invoices have all been paid by the plaintiffs in full knowledge.

At the hearing, an argument is also made that the plaintiffs’ claim is somewhat unfair or abusive, as it represents 42% of Ceiba’s – already low – margin on this project. ANALYSIS

a) Mr. McLean’s personal liability [ 7 ] In their proceedings, Mr. Kluyskens and Ms. Sarti ask that the Court lift the corporate veil and hold Mr. McLean personally liable for their claim, together with his company. [ 8 ] There are no grounds to do this, since no proof whatsoever has been made that Mr. McLean has used Ceiba so as to dissemble fraud, abuse of right or contravention of a rule of public order [2] .

b) Ceiba’s liability [ 9 ] Ceiba’s argument is twofold: it pleads that; 1) Mr. Kluyskens and Ms. Sarti knowingly consented to its method of invoicing; 2) their claim is inequitable, as Ceiba’s margin on this project was unusually low, whereas its work was very profitable for Mr. Kluyskens and Ms. Sarti. [ 10 ] Ceiba is not a consumer, and no proof has been made that the essential stipulations of the contract were not negotiable [3] . Likewise, Ceiba has not demonstrated that Mr. Kluyskens and Ms. Sarti acted in bad faith [4] .

In this context, the alleged disproportion between the benefits that the parties respectively gained from the contract does not allow Ceiba to seek that it be reopened or renegotiated. The contract is the law of the parties. [ 11 ] As regards Ceiba’s claim that Mr. Kluyskens and Ms. Sarti accepted to pay taxes upon taxes and a 17.64% margin, the Court sees no reason not to believe Ms. Sarti when she testifies that this was brought to their attention, after the fact, by their accountant. [ 12 ] The parties seem to have believed that a division by 0.85 equals a multiplication by 1.15.

Obviously, it does not. [ 13 ] The evidence establishes that Ceiba’s margin was indeed negotiated at 15%, and that charging taxes upon taxes was an error [5] . [ 14 ] Therefore, Ceiba’s invoicing was not made in accordance with the contract.

FOR THESE REASONS, THE COURT: GRANTS the action against Ceiba Enterprise Inc. only; CONDEMNS Ceiba Enterprise Inc. to pay $15,000.00 to Pamela Sarti and Cedrick Kluyskens , with interest at the legal rate, plus the additional indemnity provided by law, to accrue from March 16, 2015; WITH COSTS in the amount of $200.00. __________________________________ VINCENZO PIAZZA, j.c.q. Date of hearing: January 10, 2017