2017 QCCQ 4680, 2017 QCCQ 4680

Liwanpo c. Eden Palace inc. 2017 QCCQ 4680 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-143884-148 DATE: April 27, 2017 ______________________________________________________________________ BEFORE THE HONOURABLE ENRICO FORLINI J.C.Q. ______________________________________________________________________ JUDY LIWANPO Plaintiff v. EDEN PALACE INC.

And DANIEL WAKNIN Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Judy Liwanpo claims from Eden Palace Inc. (Eden Palace) and Daniel Waknin $3,916.02 which she claims is due further to a purchase of a condominium unit from Eden Place in September 2011. [ 2 ] Although Eden Palace and Mr. Waknin were duly convened and called, neither were present at the trial and thus the trial proceed by default. [ 3 ] On September 8, 2011, Eden Palace sells to Ms.

Liwanpo a condominium unit located in Montreal. [1] According to the deed of sale, Ms. Liwanpo becomes the owner of the property effective September 8, 2011. Moreover the adjustments clause of the deed of sale provides that “the adjustments for municipal and school taxes will be made between the parties without the intervention of the undersigned notary”. [ 4 ] According to the adjustments sheet prepared by the notary and signed by Ms. Liwanpo and Mr. Waknin on behalf of Eden Palace, the parties agree that Ms.

Liwanpo will be responsible for school and municipal taxes for the period of September 8, 2011 to December 31, 2011 and that municipal and school taxes for the period prior to September 8, 2011 are payable by Eden Palace. [2] The parties agree to establish the amounts due under the adjustments clause and the adjustments sheet once the tax bills will become available as they are not available at closing. [ 5 ] However, and notwithstanding the agreement, Eden Palace never pays the school and municipal taxes for period covering January 1, 2011 to September 8, 2011.

Moreover, despite that Eden Palace represents in the deed of sale that the school taxes for the year 2010 have been paid, Ms. Liwanpo discovers that they have not been paid. [ 6 ] Ms. Liwanpo pays the outstanding taxes totaling $3,916.02 to prevent the loss of the property. [ 7 ] Ms. Liwanpo writes to Mr. Waknin on numerous occasions in 2012 and 2013 asking him to pay Eden Palace’s share of the municipal and school taxes. Mr. Waknin responds writing that he will “work on it”. He never denies owing the money, yet Ms.

Liwanpo is never paid. [3] [ 8 ] Accordingly, considering that Eden Palace agreed to pay the school and municipal taxes for the period January 1 to September 8, 2011 under the adjustments clause of the deed of sale, and considering that it breached this obligation, and considering that it represented that it had paid school taxes for the year 2010 yet this statement turned out to be false, the Court concludes that Ms. Liwanpo’s claim against Eden Palace is well founded for $3,916.02 and will order Eden Palace to pay this amount. [4] [ 9 ] Ms. Liwanpo also sues Mr.

Waknin personally to recover the same amount she claims from Eden Palace. She claims that as the alter ego of Eden Palace, he is personally liable for the corporation’s debts. Moreover, Ms. Liwanpo alleges that Mr. Waknin committed an extra contractual fault. [ 10 ] A corporation has a distinct legal personality from that of its members, including its directors, officers and shareholders. [5] As a general rule, and subject to the exceptions that will be described below, the acts of a corporation only bind the corporation and do not trigger the liability of its directors, officers and shareholders.

[ 11 ] To succeed in a claim brought against a director, officer or shareholder of a corporation, a plaintiff has the onus of proving, on a balance of probabilities, that the director, officer or shareholder either committed an extra-contractual fault (article 1457 C.C.

Q) or that it used the corporation to dissemble (

i) fraud, (ii) abuse of right, or (iii) the contravention of a rule of public order (article 317 C.C.Q.). The latter basis of liability is often referred to as piercing the corporate veil. [ 12 ] Ms. Liwanpo has not introduced facts which justify the piercing of the corporate veil and setting aside the corporation’s distinct legal personality. [ 13 ] That said, did Mr. Waknin commit an extra-contractual fault with respect to Ms.

Liwanpo? [ 14 ] The adjustment clause of the deed of sale as supplemented by the adjustments sheet address the payment of the municipal and school taxes for the year 2011 and are silent as to school taxes for the year 2010. [6] [ 15 ] However, Eden Palace represents in the deed of sale that all school taxes have been paid until December 31, 2011, subject obviously to the adjustment clause. [7] [ 16 ] In fact, it turns out that this representation is false because Ms. Liwanpo discovers in May 2012 that $831.15 in school taxes for the year 2010 have not been paid. [8] [ 17 ] Not only does Mr. Waknin never tell Ms.

Liwanpo when she purchases the property in 2011 that the school taxes for 2010 have not been paid, he expressly represents the opposite in the deed of sale. By participating with Eden Palace in making this false representation in the deed of sale, Mr. Waknin commits an extra- contractual fault with respect to Ms. Liwanpo and triggers his personal liability. [9] [ 18 ] Mr. Waknin’s participation in this false representation vitiates Ms.

Liwanpo’s consent to the deed of sale, which entitles her to claim a reduction of her obligations under the deed of sale equivalent to the school taxes she paid for 2010, namely $831.15. [10] [ 19 ] Since Eden Palace’s liability towards Ms. Liwanpo is contractual whereas Mr. Waknin’s liability is extra contractual, the damages award will be in solidum. [11] FOR THESE REASONS, THE COURT: [ 20 ] GRANTS Ms. Liwanpo’s action in part; [ 21 ] CONDEMNS Eden Palace Inc. and Daniel Waknin in solidum to pay to Judy Liwanpo $831.15 with interest at the legal rate plus the additional indemnity provided for in

article 1619 of the Civil Code of Québec , from May 9, 2014; [ 22 ] CONDEMNS Eden Palace Inc. to pay to Judy Liwanpo $3,084.87 with interest at the legal rate plus the additional indemnity provided for in

article 1619 of the Civil Code of Québec , from May 9, 2014; [ 23 ] WITH COSTS of $137 representing the fees paid on the application. __________________________________ ENRICO FORLINI J.C.Q. Date of hearing: March 20, 2017