2022 QCCQ 8826, 2022 QCCQ 8826

Roxbury Capital c. Yu 2022 QCCQ 8826 COURT OF QUÉBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-274275-224 DATE: November 25, 2022 ______________________________________________________________________ BEFORE THE HONOURABLE DOMINIQUE GIBBENS, J.C.Q. ______________________________________________________________________ ROXBURY CAPITAL s.E.C. Plaintiff v.

ZHANG YU Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ OVERVIEW [ 1 ] Plaintiff Roxbury Capital S.E.C. (“ Roxbury ”) owns a multi-dwelling building in downtown Montreal. Defendant Zhang Yu occupies a dwelling in said building. [ 2 ] Roxbury seeks the homologation of a transaction agreement entered into with Ms. Yu on March 8, 2022 (the “ Transaction ”). [1] The Transaction terminates the lease that previously bound the parties with effect as of July 10, 2022, by which date Ms.

Yu undertook to leave the dwelling in consideration of a lump-sump payment of $10,000, free rent until her departure and the reimbursement of her moving expenses. [ 3 ] Ms. Yu did not vacate the dwelling on July 10, 2022. [ 4 ] On September 13, 2022, Roxbury filed an original application seeking the homologation of the Transaction. Roxbury subsequently agreed to allow Ms. Yu to remain in the dwelling rent-free until October 15, 2022 and to reimburse certain rent collected from her by mistake. Although Roxbury paid the agreed amounts, Ms.

Yu did not vacate the dwelling on October 15, 2022. [ 5 ] On October 24, 2022, Roxbury filed an Amended Application for Homologation of a Transaction (the “ Amended Application ”) setting out the terms of the amended Transaction and Ms. Yu’s failure to vacate the premises on October 15, 2022. [ 6 ] Ms. Yu contests the Amended Application on the grounds that she did not validly consent to the Transaction.

More particularly, she claims that she entered into the Transaction on the basis of the false representations of Roxbury’s representatives. [ 7 ] The Court must decide whether the Transaction should be homologated or whether it is null for lack of consent. [ 8 ] For the reasons more fully set out below, the Court grants the Amended Application and homologates the Transaction. ANALYSIS

a) The role of the Court on an application for homologation [ 9 ] Roxbury’s Amended Application is governed by

article 528 of the Code of Civil Procedure (“ C.C.P. ”), which reads: 528. Homologation is approval by a court of a juridical act in the nature of a decision or of an agreement. It gives the homologated act the same force and effect as a judgment of the court. The homologating court only examines the legality of the act; it cannot rule on its advisability or merits unless a specific provision empowers it to do so . [Emphasis added] [ 10 ] As clearly set out in

article 528 C.C.P., the role of the Court on an application to homologate a transaction agreement is strictly to examine the legality of the agreement, except if a specific provision empowers a review of its advisability or merits. No such provision exists here. [ 11 ] The examination of the legality of a transaction entails that the Court: (

a) determine whether the agreement is a transaction within the meaning of

article 2631 of the Civil Code of Québec (“ C.C.Q. ”); (

b) verify that the agreement is not subject to a cause of nullity; and (

c) ensure that the agreement is not against public order. [2] [ 12 ] Only the first two elements are at issue in the instant case, as nothing suggests that the Transaction is against public order.

b) Is the Transaction a transaction within the meaning of

article 2631 C.C.Q. ? [ 13 ]

Article 2631 C.C.Q. states that: 2631. Transaction is a contract by which the parties prevent a future contestation , put an end to a lawsuit or settle difficulties arising in the execution of a judgment, by way of mutual concessions or reservations . A transaction is indivisible as to its subject. [Emphasis] [ 14 ] Here, the review of the Transaction and the evidence regarding the circumstances leading to its conclusion convince the Court that it contains the essential components of a transaction. [ 15 ] The Court accepts the testimony of Mr. David Mimoune and Mr.

Avi Elkeslassy of Roxbury that the Transaction was entered into after they advised Ms. Yu of Roxbury’s intention to carry out major work in the building and that the reason for reaching a settlement was to prevent any dispute with Ms. Yu arising out the of said work and any legal proceedings. [ 16 ] It is also clear that mutual concessions were made by the parties: Ms.

Yu accepted to terminate the lease and leave the premises at the end of its term on July 10, 2022, while Roxbury agreed to pay her a compensation of $10,000, in addition to free rent until her departure ($615/month) and the reimbursement of her moving expenses.

c) Is the Transaction null for lack of consent? [ 17 ] A transaction agreement is subject to the same causes of annulment as contracts in general, except that annulment for an error of law is specifically excluded. [3] [ 18 ] Under the general rules, the consent of the parties to a contract must be “ free and enlightened ”. [4] If a person’s consent is vitiated by “ error, fear or lesion ”, [5] that person may obtain the annulment of the contract. [6] [ 19 ] Ms. Yu claims that her consent was vitiated by false representations made to her by Mr. Mimoune and Mr. Elkeslassy.

This ground of contestation brings into play the rules applicable to error induced by fraud. [7] [ 20 ] There is fraud where a person voluntarily provokes an error in the mind of another to bring that other person to enter into a contract or to agree to certain terms. [8] [ 21 ] To obtain the annulment of a contract for fraud, the victim must prove the existence of the error, the fact that it was a key element in his or her decision to contract, the fact that the fraud was provoked by the other party and the intent to deceive. [9] [ 22 ] To succeed, Ms.

Yu must therefore prove, on a balance of probabilities, [10] that false representations were made with the intent to deceive her and that said representations were a key element of her decision to enter into the Transaction. To meet this burden, the evidence offered must be clear and convincing [11] and the alleged facts must not only be possible, but probable. [12] [ 23 ] Ms. Yu accuses Mr. Mimoune and Mr.

Elkeslassy of falsely representing that Roxbury intended to demolish the building, that she had no choice but to leave her dwelling permanently and that if she refused to do so, Roxbury would file proceedings before the Administrative Housing Tribunal and have her evicted. She also claims that Mr. Elkeslassy pressured her into signing the Transaction without giving her a chance to think things through or get advice as to her rights. [ 24 ] The Court cannot accept Ms. Yu’s testimony and arguments for the following reasons. [ 25 ] Ms. Yu’s testimony regarding what Mr. Mimoune and/or Mr.

Elkeslassy told her prior to the execution of the Transaction was vague and confused and the Court did not find it credible. [ 26 ] The Court prefers the testimony of Mr. Mimoune and Mr. Elkeslassy, whose version of the facts appears more probable than that of Ms. Yu. Mr. Mimoune and Mr. Elkeslassy categorically deny that they misled Mr. Yu in any way. The Court accepts their testimony that they initially met with Ms.

Yu (as they did with other tenants of the building) to discuss the major renovation work that Roxbury intended to carry out in the building and its impact on the tenants, more particularly those who were working from home, as Ms. Yu. They discussed different options open to Ms. Yu, including the possibility of her finding temporary accommodation during the renovations, while proposing to avoid any potential future dispute by agreeing to terminate the lease in consideration of compensation to Ms. Yu. [ 27 ] Moreover, the audio recording of the initial meeting with Mr. Mimoune and Mr. Elkeslassy that Ms.

Yu was authorized to play at the hearing does not corroborate her version of the facts. On the contrary, it corroborates Mr. Mimoune and Mr. Elkeslassy’s testimony in that you hear them discuss with her the option of finding temporary accommodation. It is true that they express their opinion that an agreement to end the lease is the preferable option, but this is not a false representation which can vitiate consent. [ 28 ] Ms.

Yu’s submission that she was pressured into executing the Transaction without the possibility of thinking it through or getting advice as to her rights is also difficult to believe considering the evidence. Indeed, the Court accepts Mr. Elkeslassy’s testimony that the terms of the agreement between the parties were negotiated over several back-and-forth exchanges, during which Ms. Yu came back with increasing demands regarding the compensation that she was prepared to accept to terminate the lease. Not only did Ms.

Yu have ample time to get advice, but she admitted that she spoke to a representative of the Administrative Housing Tribunal prior to entering into the Transaction. [ 29 ] Ms. Yu’s submission that she was mislead is also difficult to reconcile with her conduct after the Transaction was entered into.

She accepted payment of all amounts due to her pursuant to the Transaction without raising any issue as to its validity. She received $7,000 from the lump sum payment of $10,000 in March 2022. As to the remaining $3,000, which was payable only once she provided her new address, she convinced Mr. Elkeslassy sometime during the summer of 2022 to pay it to her in advance because she needed the money to cover medical expenses for her cat, all the while raising no issue as to the validity of the Transaction. [ 30 ] The Court concludes, on those facts, that Ms.

Yu validly agreed to the Transaction and that she simply changed her mind afterwards. In fact, Ms. Yu impliedly admitted this during her testimony when she stated that after being told by others that she could possibly have obtained a higher amount of compensation, she contacted Mr. Elkeslassy and asked that they “cancel” the Transaction. Ms. Yu must be held to the obligations that she contracted thereunder. [13] [ 31 ] The Court will therefore homologate the Transaction as requested.

d) Provisional execution notwithstanding appeal [ 32 ] Roxbury asks the Court to order the provisional execution of the judgment notwithstanding appeal on the basis only of the “circumstances” and “urgency”. [14] [ 33 ] Provisional execution notwithstanding appeal can be ordered where bringing an appeal is likely to cause serious and irreparable prejudice to one of the parties. [15] In the absence of any evidence of such prejudice, the Court will not order the provisional execution of the judgment. [ 34 ] On a final note, Roxbury asks that the Court order Ms.

Yu to vacate the dwelling within 5 days of the judgment and to authorize her eviction by way of forced execution should she fail to do so. [ 35 ] The Court has the power to grant conclusions to facilitate the execution of a transaction. [16] In the Transaction, Ms. Yu undertook to vacate the dwelling on October 15, 2022 and did not do so. Under the circumstances, and taking into account the delay to appeal, the Court will order Ms. Yu to do so within 30 days from service of the judgment.

FOR THESE REASONS, THE COURT: GRANTS the Amended application for the homologation of a transaction ; HOMOLOGATES the transaction entered into between Plaintiff and the Respondent on March 8, 2022 and amended on September 14, 2022 and on October 9, 2022; ORDERS Respondent to vacate the dwelling located at [...] within thirty (30) days from the date of service of the present judgment; ACKNOWLEDGES Plaintiff’s undertaking to pay for the moving costs of Defendant as provided for in the Transaction; WITH LEGAL COSTS . __________________________________ DOMINIQUE GIBBENS, J.C.Q.

Date of hearing: November 2, 2022 Me Serge Laflamme Laflamme Nadeau, Avocats, Attorneys Attorney for Plaintiff Zhang Yu For herself