2015 QCCQ 4089, 2015 QCCQ 4089

Kem-a-Trix (lubricants) inc. c. Werner 2015 QCCQ 4089 COURT OF QUEBEC “Small claims Division” CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL No: 500-32-137957-132 500-32-138265-139 DATE: May 20, 2015. ______________________________________________________________________ BY THE HONOURABLE ARMANDO AZNAR, J.C.Q. ______________________________________________________________________ 500-32-137957-132 KEM-A-TRIX (lubricants) Inc. Plaintiff v. JOSEPH WERNER Defendant ______________________________________________________________________ 500-32-138265-139 GROUPE D’INVESTISSEMENT JOSEPH MONGOMERY ET WERNER INC.

Plaintiff v. MR.

NORMAN KATZ AND MABEL PENTON KATZ Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] In the file bearing number 500-32-137957-132, Plaintiff, Kim-a-Trix Lubricants Inc., claims from Defendant Werner the sum of $ 6,000.00 regarding an unpaid loan that was made to said Defendant on July 24, 2006. [ 2 ] In Defence to the action instituted against him, Defendant Werner pleads that Plaintiff’s action is prescribed having been instituted more than three (3) years after the money was to be repaid. [ 3 ] In the file bearing 500-32-138265-139, Plaintiff, Groupe d’investissement Joseph Mongomery et Werner Inc. (Werner), claims from Defendants Norman Katz and Mabel Panton Katz a sum of the $ 7,000.00 representing unpaid interest regarding a short term loan of $ 46,000.00 that was granted to Defendants by Plaintiff on March 27, 2007. [ 4 ] Defendants Katz and Penton contest Plaintiff’s action on the basis that no interest was to be charged to them in regard to the loan which, as a matter of fact, was fully repaid by the end of 2010. [ 5 ] Defendants Katz and Penton also filed a counter-claim in the amount of $ 2,000.00 against Plaintiff Werner for having instituted a frivolous action.

At the hearing which took place on May 11, 2015, the cross-demand was discontinued. [ 6 ] Both files have been joined for proof and hearing and the present judgment will decide the merits of each claim. [ 7 ] The evidence adduced at trial through the testimony of Mr. Katz and the testimony of Mr. Werner has established that the Plaintiff, Kim-a-Trix (lubricants) Inc., did lend an amount of $ 6,000.00 to Defendant Werner on July 24, 2006. [ 8 ] Plaintiff’s action in recovery of the loan was instituted on April 8, 2013.

This being so, the Court refers to articles 2898 and 2925 of the Civil code of Quebec which stipulates the following : “ 2898. Acknowledgement of a right, as well as renunciation of the benefit of a period of the time elapsed, interrupts prescription. 2925. An action to enforce a personal right or movable real right is prescribed by three years, if the prescriptive period is not otherwise determined.”

[ 9 ] In the present case, in view of the testimonies of Joseph Werner and Norman Katz and after consideration of the documentary evidence filed by them, the Court concludes that the action instituted by Kim-a-Trix (lubricants) Inc. against Defendant Werner is prescribed as it was instituted more than three (3) years after the date of exigibility of the loan. [ 10 ] Furthermore, the evidence has not revealed that prescription was interrupted. More particularly, Mr.

Katz did not establish that there existed, on the part of Defendant Werner, an unequivocal acknowledgment of a right or renunciation of the benefit of a period of time elapsed which would have interrupted prescription regarding his claim. [ 11 ] In view of the preceding, the action instituted by Kim-a-Trix (lubricants) Inc. against Defendant Werner is dismissed, without costs in view of the particular circumstances of the present case and more particularly in view of the long term business relationship existing between the parties. [ 12 ] In the file bearing number 500-32-138265-139, Plaintiff Werner has filed, in support of the action, a note dated March 27, 2007 signed by Joseph Werner and Norman Katz in which the latter acknowledges having received a short term loan in the amount of $ 46,000.00.

The note indicates that an interest of “5 % prime bank rate” is to be charged to the debtor.

This is most probably indicative of an annual interest rate. [ 13 ] Notwithstanding the terms of the note, Defendant Katz denies that the loan included the payment of interest. [ 14 ] The evidence adduced at trial has revealed that Defendant Katz made payments to Plaintiff from March 2007 until December 2010 at which time, the capital of the loan was repaid in full. [ 15 ] It is only by letter dated October 3, 2012 that Plaintiff Werner mentioned, in writing, for the first time, that the interest on the $ 46,000.00 loan had not been paid. [ 16 ] Furthermore, it is only after the institution of the proceedings against Joseph Werner by Kim-a-Trix (lubricants) Inc. in April 2013 that Plaintiff Werner decided to institute proceedings against Mr.

Katz claiming payment of the unpaid interest. [ 17 ] In support of its claim, Plaintiff Werner filed a

schedule of payment (Exhibit REW-2) indicating the interest owed by Defendant Katz on the basis of the payments made by him during the period of March 2007 to December 2010. [ 18 ] According to the testimony of Mr. Werner, the

schedule (Exhibit REW-2) was prepared by his accountant Marvin Green. [ 19 ] Furthermore, Mr. Werner filed the original of the loan note signed by Defendant Katz as well as the original of Temporary Deposit Books (Exhibit REW-1) indicating at which dates Defendant Katz made his payments in reimbursement of the $ 46,000.00 loan. [ 20 ] Considering the preceding, the Court refers to articles 2803 and 2804 of the Civil code of Quebec which provide the following : “2803. A person seeking to assert a right shall prove the facts on which his claim is based.

A person who claims that a right is null, has been modified or is extinguished shall prove the facts on which he bases his claim. 2804.

Evidence is sufficient if it renders the existence of a fact more probable than its non-existence, unless the law requires more convincing proof. [ 21 ] This being so, in view of the evidence adduced at trial, the Court concludes that Plaintiff Werner has established: a. that the loan made to Defendant Katz was repayable with interest at the rate of 5 % per annum; b. that the interest claimed by Plaintiff Werner is owed by Defendant Katz; c. that the action instituted by Plaintiff Werner is not prescribed. [ 22 ] Consequently, Plaintiff Werner’s action is maintained.

However, the additional indemnity provided for by

article 1619 of the Civil Code of Quebec will not be granted as the parties did agree to an interest of 5 % a year which rate is substantially higher than the one granted by banks in regard to deposits.

Furthermore, considering that Plaintiff Werner instituted its action on April 29, 2013 without having formally put Defendant Katz on notice to repay the amount owed, the interest on the judgment rendered will commence to run as of April 29, 2013. [ 23 ] Finally, as there is no evidence that Defendant, Mabel Penton Katz, is liable for the repayment of the loan, the action instituted against her by Plaintiff Werner is dismissed, without costs.

FOR THE FOREGOING REASONS, THE COURT: In the file bearing number 500-32-137957-132 : DISMISSES the action instituted by Plaintiff Kim-a-Trix (lubricants) Inc. against Joseph Werner, without costs. In the file bearing number 500-32-138265-139 : MAINTAINS the action instituted by Plaintiff, Groupe d’investissement Joseph Mongomery et Werner Inc., against Norman Katz; CONDEMNS Defendant Norman Katz to pay to Plaintiff, Groupe d’investissement Joseph Mongomery et Werner Inc., the sum of $ 7,000.00 with interest at the rate of 5 % per annum as of April 29, 2013, with costs in the amount of $ 167.00;

DISMISSES the action instituted by Plaintiff, Groupe d’investissement Joseph Mongomery et Werner Inc., against Mabel Penton Katz, without costs. __________________________________ ARMANDO AZNAR, J.C.Q. Date of hearing: February 2, 2015 and May 11, 2015.