2015 QCCQ 3166, 2015 QCCQ 3166

Jaunky c. 9214-6083 Québec inc. (Electronic-Pro Price Buster) 2015 QCCQ 3166 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-144478-148 DATE: April 24, 2015 ______________________________________________________________________ BY THE HONOURABLE JEFFREY EDWARDS, J.C.Q. ______________________________________________________________________ HORIL JAUNKY Plaintiff v. 9214-6083 QUÉBEC INC. also doing business under the name of ELECTRONIC-PRO PRICE BUSTER -and- RACHID SAHT Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Horil Jaunky requests the cancellation of a contract of sale by which he purchased from 9214-6083 Quebec Inc. (carrying on business under the name of Electronic-Pro Price Buster (“ Price Buster ”)) a Samsung LED 55 inch television, series 7000 (“ television ”). [ 2 ] Mr.

Jaunky has taken also a personal recourse in damages against the majority shareholder, president and the representative of Price Buster with whom he dealt, namely Rachid Saht, on the basis of civil fraud. [ 3 ] Mr. Jaunky testified at the trial and filed into evidence his exhibits (P-1 to P-5). [ 4 ] No representative appeared at the trial for Price Buster and Mr. Rachid Saht did not appear. [ 5 ] Mr. Jaunky testified that on December 9, 2011, he purchased the television from Price Buster for the price of $2,070. The invoice refers to a “guarantee” of Price Buster for one year. [ 6 ] Mr.

Jaunky had believed that he was buying a new television. At the time, no representative of Price Buster indicated to him that the television was used or of second hand. [ 7 ] Mr. Jaunky testified that the first problem appeared upon initial use. The WiFi function did not work. He telephoned Mr. Rachid Saht of Price Buster, who told him to connect it instead by wire. He did so since there was only minor inconvenience from this. He decided to not take this issue further at the time. [ 8 ] Then in May 2012, the television would get very hot. He contacted Mr. Saht of Price Buster, who said that it was of no concern.

[ 9 ] In October and November 2012, Mr. Jaunky testified that, after turning the television on certain parts of the television screen faded into black. Upon closer examination, he noticed that the pixels in the television screen were burned out. [ 10 ] It was no longer possible to watch anything on the television as it was 90% a black screen and the remainder was excessively bright. In fact, the remaining working part of the screen was so bright that it would burn the viewer's eyes. [ 11 ] In late November 2012, Mr. Jaunky went to see Mr.

Rachid Saht who said that Price Buster was not responsible, despite the guarantee of 1 year on the Price Buster sale receipt. Mr. Rachid Saht only offered to sell another similar television for $900. Mr. Rachid Saht told Mr. Jaunky to take up the problem with the manufacturer Samsung. [ 12 ] Mr. Jaunky communicated with Samsung which asked for the serial number of the television. Mr. Jaunky looked everywhere on the television for a serial number. He gave a number to Samsung's representative who stated that it was a fake number. Mr.

Jaunky found a place on the television set for what appeared to be the original serial number but that number was erased. Samsung's representative told Mr. Jaunky that they could not assist him with his problems as it appeared that the television was not an authentic or authorized product of Samsung and appeared to be refurbished. Liability of Price Buster [ 13 ] The liability of Price Buster is clearly established. Under

Article 1726, 1729 of the Civil Code of Quebec (C.C.Q.), Articles 37, 38 and 53 of the Consumer Protection Act (C.P.A.), there was inexecution of Price Buster's contractual obligation of warranty to ensure the product sold worked normally and was not defective. [ 14 ] There was also inexecution of

Article 1458 C.C.Q. in that Price Buster did not respect its own conventional warranty of one year. [ 15 ] There was also inexecution of

Article 1717 C.C.Q. (obligation of delivery). Price Buster sold Mr. Jaunky a used television when he contracted to buy a new television. Furthermore, the evidence is that the television was not an authorized product of Samsung, as Price Buster represented it to be. [ 16 ] Finally, the acts of selling a used television under the false representation that it was new and an authorized product of the manufacturer, along with the sale of a product with the serial number falsified and the authentic number erased, constitute a civil fraud (Articles 1401, 1407 and 1457 C.C.Q.). [ 17 ] Mr.

Jaunky requests the resolution (cancellation) and nullity of the sale and the refund of the purchase price. Mr. Jaunky offers to return the defective and non authorized television. [ 18 ] In light of the proof, these recourses are well founded in fact and in law (Articles 1590 C.C.Q.,

Article 270 CPA). Personal Liability of Mr. Rachid Saht [ 19 ] Mr. Jaunky also requests that Mr. Rachid Saht be held personally liable for the refund of the purchase price. [ 20 ] According to the proof, there are two reasons why this request is well founded.

[ 21 ] First, the sale of the television appears to be fraudulent. [ 22 ] The television sold was not new and was sold as being new. Mr. Jaunky states that he never would have purchased a television at that price if he had been told that it was used and second hand. [ 23 ] Nothing on the sale invoice indicates that the television was second hand. Mr.

Jaunkin testified also that there was nothing on the packaging of the product that indicated it was second hand either. [ 24 ] It also appears that the television sold was not only used but it was modified in that the true serial number was erased to hide its true origins, whatever they were. [ 25 ] As a professional, Mr. Rachid Saht, owner, manager and officer of Price Buster, must have known about these facts but did not disclose them to Mr. Jaunky. Based upon the evidence, the Court concludes that Mr. Rachid Saht was aware of the facts and intentionally deceived Mr.

Jaunky. [ 26 ] This fraudulent conduct on the part of Mr. Rachid Saht constitutes a fault under Articles 1401, 1407 and 1457 C.C.Q. rendering him liable for the damages suffered by Mr. Jaunky, namely the amount of the purchase price paid for a product without value. [ 27 ] With regard to the corporate existence of Price Buster, it cannot constitute a shield for Mr. Rachid Saht. The Court is authorized to lift the corporate veil when it is invoked to cover fraud, in accordance with

Article 317 C.C.Q. [ 28 ] Second, Price Buster did not have a corporate existence at the time of the sale. [ 29 ] Mr. Jaunky mentioned in his testimony that, according to the Quebec Corporate Registry (Exhibit P-6), Price Buster is no longer in existence. In fact, the Quebec Corporate Registry print out indicates that the corporate entity for which the name of Electronic- Pro Price Buster was registered, namely 9214-6083 Quebec Inc., has not been in existence since a voluntary dissolution, dating back to August 20, 2010 . [ 30 ] Therefore, even before the sale of the television to Mr.

Jaunky, the corporate entity behind Price Buster was not in existence. But Mr. Saht used that purported entity to sell the television. The Court concludes that Mr. Rachid Saht could not have been unaware of this voluntary dissolution. This is further proof of civil fraud on the part of Mr. Rachid Saht with regard to Mr. Jaunky, rendering Mr. Saht personally liable for Mr.

Jaunky’s damages. [ 31 ] Furthermore, the jurisprudence has established that when an individual purports to contract as a representative of a corporate entity or moral person that does not in fact exist or has been struck (or radiated) from the corporate registry, he or she engages the patrimony of that individual and is therefore personally responsible for such transaction.

Depending on the circumstances, the liability may be extracontractual (Article 1457 C.C.Q.) or contractual (Article 1458 C.C.Q.) [1] . [ 32 ] In 2960-4063 Quebec inc. c. 9034-4706 Quebec inc., B.E. 2001BE-201 (C.Q.) , Barbe, J., stated at pages 6, 7 and 8: « La preuve établit que l’intimée 9034-4706 Québec inc. fut radiée le 8 mai 1999 et que cette radiation fut levée le 27 septembre 1999. La preuve établit que Yvon Poirier a laissé croire le 25 juin que 9034-4706 Québec inc. n’était pas dissoute. Est-ce que cela entraîne sa responsabilité personnelle?

… Qu'arrive-t-il si une personne signe un contrat au nom d'une compagnie en qualité de représentant de celle-ci, mais que cette compagnien'existe pas? Évidemment, à partir du moment où une compagnie cesse d'exister, personne ne peut en principe agir pour elle, car il n'y aplus de mandant pour donner un tel mandat. En l'absence de mandat la personne qui signe assume une responsabilité personnelle enversle tiers contractant sur une base extracontractuelle (art. 1457 C.C.Q.) puisque l'intimé Yvon Poirier connaissait ou aurait dû connaître ladisparition de la compagnie » [33] In Investissement Ponari Mondial Inc. c.

Mordehay, 2007 QCCA 892, the Court, (Dalphond, Hilton, Vézina, JJ.) held atparagraph 2: « La personne qui signe un contrat se lie personnellement. Si elle déclare signer pour une autre, encore faut-il qu’elle ait le pouvoir de lefaire, sinon on revient à la première règle, elle est liée personnellement » [34] In Bélanger c. Lacaille, (QC CA), J.E. 99-954 (C.A.), Mailhot, J., for the majority, stated at paragraph 13: « Au moment de la signature des pièces, la compagnie à numéro avait été dissoute, pour défaut d'avoir présenté les rapports annuelsrequis par la loi.

En agissant au nom d'une compagnie inexistante, Bélanger a engagé sa responsabilité personnelle. » [35] Accordingly, the claim to hold Mr. Rachid Saht personally responsible for damages of $2,070, equivalent to the full purchaseprice, is well founded in fact and in law.

FOR THESE REASONS, THE COURT: GRANTS the present Motion; TAKES ACT of the offer of Horil Jaunky to remit to 9214-6083 Quebec inc. the Samsung television LED 7000 referred to in theinvoice, Exhibit P-5; RESOLVES and DECLARES null and void the contract of sale of the Samsung television LED 7000, referred to in the invoice, ExhibitP-5; CONDEMNS solidarily 9214-6083 Quebec Inc. and Mr. Rachid Saht to pay Horil Jaunky the amount of $2,070, plus legal interest at 5%per year, plus the additional indemnity provided at

Article 1619 of the Civil Code of Quebec since the date of the demand letter, namelySeptember 19, 2014 (Exhibit P-2); WITH JUDICIAL COSTS of $106 in favour of Mr. Horil Jaunky. __________________________________ Jeffrey Edwards, J.C.Q. Date of hearing: April 20, 2015