2018 QCCQ 2521, 2018 QCCQ 2521

JB4545 Muhlhan c. Miller 2018 QCCQ 2521 COURT OF QUÉBEC Small Claims Division CANADA PROVINCE OF QUÉBEC DISTRICT OF GATINEAU LOCALITY OF GATINEAU No. 550-32-023873-166 DATE: February 20 th , 2018 ______________________________________________________________________ PRESENT: THE HONOURABLE PATSY BOUTHILLETTE J.C.Q. ______________________________________________________________________ MICHAEL MUHLHAN , […] , Brunswick, Ohio […] United States Plaintiff v.

TREVOR MILLER , […] , Ottawa, Ontario […] and JASON MILLER , […] , Stratford, Ontario […] and ROYAL BANK OF CANADA , 1, Place Ville-Marie, 6 e étage, Montréal (Québec) H3C 3A9 Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ INTRODUCTION [ 1 ] The plaintiff, Michael Muhlhan, is claiming $15 000 from the defendants, Royal Bank of Canada (RBC), Trevor Miller and Jason Miller, further to a contract agreement. [ 2 ] Defendant RBC denies owing that amount, as it is the other two defendants’ financial institution and is in no way a party to the contract entered into. [ 3 ] Jason and Trevor Miller contend that the debt is extinguished by a cheque issued on November 25, 2013.

But should the Court conclude that the debt is not extinguished, they contend that the claim is prescribed. CONTEXT [ 4 ] The parties negotiated an agreement in order to cancel a right of usufruct . [ 5 ] Under that notarized contract, the succession of Robert William Miller (represented by defendants Jason and Trevor Miller) undertook to pay Mr.

Muhlhan $75 000 in five instalments of $15 000: on December 1, 2013, December 1, 2014, December 1, 2015, December 1, 2016 and December 1, 2017. [ 6 ] The first instalment was paid by certified cheque dated November 25, 2013 for $15 000. [ 7 ] The cheque was sent to the plaintiff, who never cashed it. According to the evidence, the cheque was lost or destroyed, but the plaintiff obviously never cashed it. [ 8 ] The payments of December 1, 2014, December 1, 2015 and December 1, 2016 were made by bank transfer.

Despite the plaintiff’s request, the defendants have refused to replace the November 25, 2013 payment. [ 9 ] All parties acknowledge that the first instalment was never cashed by the plaintiff. [ 10 ] In fact, the RBC financial institution returned the money to defendant Trevor Miller’s account. Mr. Miller signed a compensation undertaking with regard to RBC in the event that someone cashed the November 2013 certified cheque.

QUESTIONS IN DISPUTE [ 11 ] The questions in dispute are as follows: i. Is the November 25, 2013 certified cheque a release from payment? ii. Is the plaintiff’s recourse prescribed? ANALYSIS i. Is the November 25, 2013 certified cheque a release from payment? [ 12 ] Trevor and Jason Miller contend that the payment made on November 25, 2013 releases them from payment. [1] [ 13 ] In principle, their position is accurate except that the evidence shows that the amount was returned to Trevor Miller’s account.

That cannot be considered as a payment that releases the defendants. [ 14 ] According to the evidence, unless a fault was committed by an RBC employee, it is unlikely that the cheque, even if it still exists, would be honoured. [ 15 ] In fact, the cheque has been cancelled in RBC’s system.

Hence, even if another institution chose to honour it, which is unlikely, it would not be cleared by RBC. [ 16 ] The Court finds it unlikely that a cheque, even a certified cheque, dated November 2013 would be honoured by an institution without prior verification, and that is in fact what the evidence shows. [ 17 ] Consequently, the Court cannot conclude that, in this particular situation, the November 25, 2013 certified cheque constitutes a payment that releases the debtors, in accordance with

article 1564 of the Civil Code of Québec . ii.

Is the plaintiff’s recourse prescribed? [ 18 ] Proceedings were instituted against RBC on November 22, 2016. [ 19 ] In the proceedings, Jason and Trevor Miller were the impleaded parties, but they were not notified of the proceedings. [ 20 ] Jason and Trevor Miller were only served with a formal notice. [ 21 ] The evidence shows that the defendants were informed that the cheque had been lost or destroyed well before the proceedings were instituted. [ 22 ] In fact, on May 26, 2015, Trevor Miller, after taking steps further to the disappearance of the cheque, was reimbursed $15 000 by RBC. [ 23 ] For these reasons, the bank should not be party to this dispute.

The bank has never refused to honour the cheque. The cheque has never been submitted to it for clearance, thus the recourse against the bank is dismissed without costs. [ 24 ] That being so, the plaintiff’s recourse cannot be prescribed. In fact,

article 1572 of the Civil Code of Québec stipulates that in the absence of imputation by the parties, payment is imputed first to the debt that is due. 1572 . In the absence of imputation by the parties, payment is imputed first to the debt that is due . Where several debts are due, payment is imputed to the debt which the debtor has the greatest interest in paying .

Where the debtor has the same interest in paying several debts, payment is imputed to the debt that became due first; if all of the debts became due at the same time, however, payment is imputed proportionately . [ 25 ] The parties have admitted that instalments of $15 000 were paid in 2014, 2015 and 2016. Consequently, the 2014 payment applies to the 2013 debt, the 2015 payment to the 2014 debt and the 2016 payment to the 2015 debt. Accordingly, on the day of the hearing, the defendants had still not made the December 2016 payment.

Hence the recourse cannot be prescribed. [ 26 ] Regarding the interest claimed, as the contract does not provide for anything in that regard, the plaintiff is entitled to legal interest. THEREFORE, THE COURT: DISMISSES the claim against defendant Royal Bank of Canada, without costs; ALLOWS the claim against defendants Jason and Trevor Miller; CONDEMNS defendants Trevor Miller and Jason Miller solidarily to pay the plaintiff, Michael Muhlhan, $15 000, with interest at the legal rate as of the date of judgment; EACH PARTY paying their court costs.

__________________________________ PATSY BOUTHILLETTE J.C.Q. Date of hearing: November 13, 2017