2011 QCCQ 7010, 2011 QCCQ 7010

Carrington c. Tysel Construction and Development Inc. 2011 QCCQ 7010 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-169899-104 DATE: June 3, 2011 ______________________________________________________________________ BY THE HONOURABLE ELIANA MARENGO, J.C.Q. ______________________________________________________________________ MARGUERITA CARRINGTON and IAN PIERRE Plaintiffs v. TYSEL CONSTRUCTION AND DEVELOPMENT INC.

Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiffs are suing defendant for the reimbursement of a downpayment of $18,200.00 on the purchase price of a home to be built. FACTS [ 2 ] In August, 2008, after seeing "an ad", plaintiff Marguerita Carrington went to see a model home built by defendant. [ 3 ] Carrington liked what she saw, but doubted she would be able to obtain adequate financing.

She expressed her doubts to defendant's representatives, but was told, "It would be OK". [ 4 ] Carrington later returned with her husband plaintiff Ian Pierre. Together, they decided they would try to obtain the required downpayment of $18,200.00. [ 5 ] After borrowing said amount on a line of credit, plaintiffs signed Preliminary Contract And Guarantee Contract (exhibit P- 1), on August 22, 2008. The purchase price for the home to be built at 7300 Place Talbot, Brossard, was $343,495.00. [ 6 ] Included in the terms and conditions of the contract, were the following: " HYPOTHECARY LOAN 12.

The promissory purchase undertakes to apply for a first rank hypothecary loan with a financial institution of his choice, and to provide the vendor with evidence of such financing, the whole within twenty-one (21) days of the signature of this agreement." ( sic ) " REFUSAL BY LENDER 14.

In the event the lender's financial institution refuses to loan to the promissory purchaser, the vendor may either attempt to find or accept a hypothecary loan under the same terms and conditions , in which case the promissory purchaser undertakes to apply for a hypothecary loan by the lender indicated by the vendor with ten (10) days following a written notice to this effect, or the vendor may terminate this agreement due to the promissory purchaser's default."( sic ) (italics added) " DEFAULT OF THE PROMISSORY PURCHASER 29.

If the promissory purchaser fails to execute any of his obligations herein and fails to correct such default within seven (7) days of his being so advised by written notice to that effect, the vendor may, at his option, terminate this agreement, in which case any deposit monies shall be retained by the vendor, without prejudice to any other recourse."

(italics added) [ 7 ] Within two days of the execution of contract P-1, plaintiffs presented themselves at the Van Horne branch of the TD Bank. They filled out a loan application, which was refused, as plaintiffs had too much debt and too little income for a $309,000.00 mortgage. At the time, Carrington was earning "$600.00 a week before tax". [ 8 ] Carrington advised defendant's principal Tyrone Candappa accordingly. Candappa's response was to tell her not to worry.

He then suggested she "see a guy at Triple A Mortgage" on Queen Mary Street, named "Zvi", also known as "V". [ 9 ] Carrington went to see "V", and filled out another mortgage application, but was turned down once again. "V" suggested Carrington pay off her debt and try again. Carrington, however, did not have the means to do so. [ 10 ] Carrington then told Candappa, "It's not working. I can't get a mortgage." [ 11 ] Months later, Candappa introduced plaintiffs to one Thomas Molmar, who, according to Candappa, went under the name of "The Mortgage Man".

Plaintiffs, however, knew him as "The Magic Man" (hereinafter referred to as "The Man"). [ 12 ] The sequence of facts, events and dates concerning The Man's implication in this matter are unclear. [ 13 ] According to plaintiffs, they met The Man after Carrington lost her job in February, 2009. [ 14 ] According to defendant, The Man obtained a mortgage commitment for the National Bank of Canada, on December 2, 2008.

It is to be noted, however, that page 1 of exhibit D-1 is unsigned; it is also incomplete, as it does not contain, inter alia , the financing conditions and page 3 referenced therein; and the loan amount and downpayment indicated therein are not in conformity with preliminary contract P-1. [ 15 ] Furthermore, page 2 of exhibit D-2, dated January 22, 2009, is entitled "Mortgage simulator"; contains no reference number; refers to figures which are not in accordance with contract P-1; and is also mute as to the financing and insurance conditions. [ 16 ] Finally, page 3 of exhibit D-1, dated January 22, 2009, constitutes "Page 7 of 7", but no other pages are attached. [ 17 ] Be that as it may, plaintiffs clearly remember meeting The Man at their apartment, and informing him that Carrington had lost her job (she was laid off).

His response was, "Don't worry about it; I'll fix it". [ 18 ] Plaintiffs, however, did not understand how that would be possible, as they now had less income at their disposal than before. [ 19 ] Two days later, the Man called plaintiffs to tell them that he had succeeded in securing a loan and a mortgage. [ 20 ] Carrington was "happy a little bit", but she and her husband were worried that something may be amiss. [ 21 ] After Carrington and her husband discussed the issue at length. Pierre told his wife, "This don't look too right. I don't want to deal with this guy.

Something is fishy." [ 22 ] Carrington met with the Man one last time. She asked him how he managed to secure financing, but his response was vague, "Don't worry. I have people in the bank. Whatever Tyrone (Candappa) wants, I get for him." [ 23 ] With this, plaintiffs decided not to go forward with the transaction, as they did not want to be involved in "anything fraudulent", and feared that they "might be out on the street and have to pay", as a result of the foregoing. [ 24 ] Carrington proceeded to advise Candappa accordingly.

Despite his not being pleased with the outcome, he undertook to return the downpayment to plaintiffs, when he sold the property. This undertaking was confirmed in writing in a letter dated October 23, 2009 (exhibit P-3). [ 25 ] Defendant subsequently sold the property, but failed to return the $18,200.00 downpayment to plaintiffs.

ANALYSIS [ 26 ] GIVEN the evidence; [ 27 ] WHEREAS plaintiffs fulfilled their obligations under contract P-1; [ 28 ] WHEREAS, in accordance with clause 12 thereof, plaintiffs applied for a first rank hypothecary loan with a financial institution of their choice, and provided the vendor with evidence of same, within 21 days of August 22, 2008; [ 29 ] WHEREAS said financial institution refused to lend plaintiffs the requested funds; [ 30 ] WHEREAS, further to this refusal, defendant did not act in accordance with clause 14 of contract P-1, in that it did not "find or accept a hypothecary loan under the same terms and conditions"; [ 31 ] WHEREAS defendant may not invoke clause 29 of the contract, as plaintiffs did not fail to execute any of their obligations; [ 32 ] WHEREAS conditional approval exhibit D-1 was for a $316,416.00 loan, which was insufficient to acquit the purchase price of $343,495.00; [ 33 ] WHEREAS, furthermore, exhibit D-1 is incomplete, as it does not contain, inter alia , 7 pages, including the "Financing

Conditions on page 3", nor does it indicate the terms of insurance; [ 34 ] GIVEN defendant's verbal and written undertakings to reimburse the downpayment "once the said property was re-sold" (exhibit P-3); [ 35 ] WHEREAS the property was indeed "re-sold"; [ 36 ] WHEREAS defendant contravened sections 6 , 7 and 1375 of the Civil Code of Quebec ; [ 37 ] WHEREAS defendant did not conduct itself in good faith; [ 38 ] WHEREAS plaintiffs had an obligation of means [1] , which they fulfilled; [ 39 ] WHEREAS plaintiffs acted in good faith; [ 40 ] WHEREAS plaintiffs attempted to obtain adequate financing, as per the terms of the contract, but were unable to do so; WHEREFORE THE COURT HEREBY: GRANTS plaintiffs' motion; CONDEMNS defendant to reimburse plaintiffs the sum of $18,200.00, with interest at the legal annual rate of 5%, plus the additional indemnity provided for by s. 1619 C.C.Q., from November 4, 2009; THE WHOLE with costs. __________________________________ ELIANA MARENGO, J.C.Q.

Me Christopher Dimakos Attorney for plaintiffs Me Kenneth R. Zigby Attorney for defendant Date of hearing: May 4, 2011