2019 QCCQ 2863, 2019 QCCQ 2863

Levi Litigation Services Inc. c. Khanna 2019 QCCQ 2863 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-703130-171 DATE: April 8, 2019 ______________________________________________________________________ BY THE HONOURABLE JEFFREY EDWARDS, J.C.Q. ______________________________________________________________________ LEVI LITIGATION SERVICES INC. Plaintiff v.

NEERA KHANNA Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiff is a professional accounting firm represented by Philip Levi who is suing Defendant for unpaid fees of $4,030.44, plus interest and legal costs. [ 2 ] Plaintiff was retained by Defendant on the recommendation of Defendant’s attorney for services of forensic accounting and litigation support for judicial applications to Court regarding a litigious matter with respect to the administration of Defendant’s mother’s estate ( Estate ).

In particular, the mandate given to Plaintiff was to analyse various accounting and expense documents regarding the administration of the Estate by Defendant’s brothers. After such analysis, Plaintiff was to assist Defendant’s attorney in the drafting and compilation of exhibits to support Defendant’s judicial applications to the Court. [ 3 ] A Mandate Agreement was signed between Plaintiff and Defendant [1] .

At the time, Defendant gave Plaintiff a retainer of $17,246.25 ($15,000 plus $2,246.25 (GST and QST)) [2] . [ 4 ] Defendant’s attorney prepared two (2) judicial applications: one for the replacement of the liquidator of the Estate, the other seeking relief on the basis of an oppression remedy. [ 5 ] Plaintiff worked on the matter from June 7 to July 25, 2017 and prepared various schedules and tables and supporting documents for the two judicial applications.

Each judicial application was approximately thirty-five (35) pages in length and included approximately two hundred (200) exhibits. [ 6 ] According to Defendant’s testimony, the Estate’s value was approximately $9,000,000. After the forensic analysis by Plaintiff was completed, there were approximately $3,500,000 in accounting discrepancies and approximately $800,000 in questionable expenses. [ 7 ] Defendant paid $19,812.00 to Plaintiff as services were provided, as appears from the cheques filed into evidence [3] .

[ 8 ] On August 2, 2017, there was an agreement in principle for a further payment by two (2) post-dated cheques to be dated August 15 and September 10, 2017 [4] . However, Plaintiff insisted upon immediate receipt of the post-dated cheques. Defendant did not send the post-dated cheques within the Plaintiff’s deadline. Plaintiff then understood that the sending of the post-dated cheques was put off by Defendant. [ 9 ] On August 9, 2017, Plaintiff terminated by notice the Mandate Agreement with Defendant.

He testified that the next day, on August 10, 2017, he was contacted by a new accountant to continue the mandate. [ 10 ] It is clear that Plaintiff and Defendant were not getting along at that point. In particular, Defendant wanted to slow down the significant billing of Plaintiff and was not comfortable with Plaintiff’s insistence and perceived inflexibility on immediate payment of his invoices. Defendant felt that Plaintiff’s charges were out of control.

Defendant states that she also wanted to get a general picture of the amounts in issue in the Estate file and was not satisfied with Plaintiff’s answers. [ 11 ] Subject to the Court’s comments set forth below, there is no contestation or complaint about the quality of the services rendered by Plaintiff. [ 12 ] When Plaintiff terminated the mandate, he applied the remaining retainer amount held by him in trust of $17,246.25 to the outstanding invoice of $18,344.84 [5] , leaving a balance owing of $1,098.59, taxes included. [ 13 ] Plaintiff also invoiced for services not yet billed at that time, totalling $2,931.86, taxes included. [ 14 ] Plaintiff is asking for payment of the total of these two amounts, being $4,030.44, plus interest and legal costs. [ 15 ] According to the evidence of Defendant, the judicial applications in the Estate matter were filed into Court on October 1, 2017.

In December 2018, the case was settled. [ 16 ] In the Court’s view, Defendant’s grounds of defence are unfounded, except in one respect. [ 17 ] Defendant submits that she never received a written report from Plaintiff for the services rendered. However, it is clear from the evidence and the Mandate Agreement that the services requested and rendered were not to prepare a report, but for forensic accounting analysis and preparation of tables, schedules and documents in support of the two judicial applications.

Defendant and her attorney received all of these. [ 18 ] The reference in the Mandate Agreement to a written report is only applicable in the event that such report was requested and required for the ongoing litigation of the judicial applications and while the mandate was still in effect. [ 19 ] Defendant was fully aware that the time spent, services rendered and services invoiced only related to the preparation of documents to support the judicial applications and to the revision of the judicial applications.

Defendant cannot ask for a further document after the mandate had been terminated. [ 20 ] Similarly, the Mandate Agreement refers to the possibility of expert testimony to be given in Court by Plaintiff. Neither the written report nor expert testimony were requested or required during the term of the mandate.

[ 21 ] The ground of defence relating to a “full and final payment” reference on a cheque is not valid since the payment cheque does not relate to the invoices claimed in the present legal proceedings. [ 22 ] Defendant also submits and argues that for the services rendered, the amount charged and already paid, namely $37,058.34, is more than enough. [ 23 ] Plaintiff admits that some of the services rendered were not done in the most cost-effective manner. [ 24 ] On at least two (2) occasions, Plaintiff states that after working on draft documents and applications that he had received from Defendant’s attorney, and before sending his completed work, he received from the said attorney new drafts to review, thereby rendering all the work previously done in that respect wasted and without value. [ 25 ] Based upon the evidence, the Court considers that the total hours of charged time without value to Defendant was eight (8) hours.

Plaintiff and Defendant’s attorney had worked previously together. They should have worked better together to ensure that time was not wasted in this way and also not charged and invoiced to Defendant. Article 2100 (1) of the Civil Code of Quebec reads as follows: “The contractor and the provider of services are bound to act in the best interests of their client, with prudence and diligence.

Depending on the nature of the work to be carried out or the service to be supplied, they are also bound to act in accordance with usage and good practice and, where applicable, to ensure that the work carried out or service supplied is in conformity with the contract.” [ 26 ] The Court is of the view that Plaintiff’s invoiced services did not respect this obligation with respect to the hours without value to Defendant. [ 27 ] However, the Court is not of the view that Plaintiff should bear the entire responsibility for these lost hours.

He should assume responsibility for one half of them. [ 28 ] The Court will therefore reduce Plaintiff’s claim by one half of those eight (8) hours, namely four (4) hours. The reduction is calculated as follows: 4 x $425, totalling $1,700, plus taxes, being $1,954.58. [ 29 ] After reduction, the remaining amount owed by Defendant to Plaintiff is $2,075.86 ($4,030.44 - $1,954.58). Defendant’s Cross-Application [ 30 ] Defendant has taken a Cross-Application against Plaintiff claiming $15,000.

[ 31 ] Defendant claims that amount on two (2) related grounds: - $9,772.88 was paid by her, after the termination of the mandate, to a subsequent accountant for further accounting documentation in support of the judicial applications [6] ; - $5,227.00 represents lost time of Defendant over September, October and November 2017 to obtain and to gather documents that Plaintiff refused to provide her. [ 32 ] For the first item, there is no proof of a default or failure by Plaintiff to provide services to Defendant.

Plaintiff was not contractually mandated, during the term of the mandate, to carry out any more services than what he did in fact. That part of the claim is therefore not allowed. [ 33 ] Regarding alleged lost time, again there is no proof that Plaintiff was ever in default before or after the termination of the mandate to provide further documents to Defendant. Plaintiff had already provided everything requested to Defendant and her attorney. Accordingly, that part of the Cross-Application will also be dismissed. [ 34 ] The Mandate Agreement contains a clause for interest at 8% in favour of Plaintiff.

In lieu of other interest, the Court will apply that clause. FOR THESE REASONS, THE COURT: CONDEMNS Neera Khanna to pay Levi Litigation Services Inc. $2,075.86, with interest at 8% per year since August 9, 2017; CONDEMNS Neera Khanna to pay Levi Litigation Services Inc. $150 in legal costs (Court Stamp Fee); DISMISSES Neera Khanna’s Cross-Application, WITHOUT LEGAL COSTS . __________________________________ Jeffrey Edwards, J.C.Q. Philip Levi: Levi Litigation Services Inc. Neera Khanna: Self-represented Date of hearing: April 8, 2019