2019 QCCA 790, 2019 QCCA 790

Schmerer c. Silver 2019 QCCA 790 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-026706-176; 500-09-026727-172 (540-17-005183-115; 540-17-008228-131) MINUTES OF THE HEARING DATE: May 2, 2019 CORAM: THE HONOURABLE NICHOLAS KASIRER , J.A. JOCELYN F. RANCOURT , J.A. STEPHEN W. HAMILTON , J.A. N o : 500-09-026706-176 (540-17-005183-115; 540-17-008228-131) APPELLANT COUNSEL SHARON SCHMERER Mtre MICHAEL N. BERGMAN ( Bergman & Associé

s) RESPONDENTS COUNSEL JEFFREY SILVER Mtre JEAN EL MASRI ( El Masri Avocat Inc. ) GIUSEPPE RUSSOTTI Absent CARMELO STEFANO RUSSOTTI JOHANNE SERPONE, LE GROUPE SERPONE SYNDIC DE FAILLITE INC., acting as trustee in bankruptcy for 9085-8598 Québec Inc. Absent and not represented IMPLEADED PARTIES

SÉCUR FINANCE INVESTISSEMENT 500 S.E.C. REGISTRE DES DROITS PERSONNELS ET RÉELS MOBILIERS Absent and not represented N o : 500-09-026727-172 (540-17-008228-131) APPELLANT COUNSEL JEFFREY SILVER Mtre JEAN EL MASRI ( El Masri Avocat Inc. ) RESPONDENT COUNSEL SHARON SCHMERER Mtre MICHAEL N. BERGMAN ( Bergman & Associé

s) IMPLEADED PARTIES COUNSEL SERGE ROBINETTE Mtre PASCALE CARON (Absent) (Donati Maisonneuve s.e.n.c.r.l.) GIUSEPPE RUSSOTTI Absent SÉCUR FINANCE INC. SIFABEN HYPOTHÈQUE S.E.C. Mtre NATHALIE CHARRON (Absent) ( Hébert Miller Avocats s.e.n.c.r.

l) CARMELO STEFANO RUSSOTTI JOHANNE SERPONE, LE GROUPE SERPONE SYNDIC DE FAILLITE INC., acting as trustee in bankruptcy for 9085-8598 Québec Inc. SÉCUR FINANCE INVESTISSEMENT 500 S.E.C. REGISTRE DES DROITS PERSONNELS ET RÉELS MOBILIERS Absent and not represented

500-09-026706-179 On appeal from a judgment rendered on February 27, 2017 by the Honourable Justice Serge Gaudet of the Superior Court, District of Laval. 500-09-026727-172 On appeal from a judgment rendered on February 27, 2017 by the Honourable Justice Serge Gaudet of the Superior Court, District of Laval. NATURE OF THE APPEAL : 500-09-026706-176 : Professional Liability – Accountant – Fault – Inaccurate representation. 500-09-026727-172 : Professional Liability – Accountant – Fault – Inaccurate representation. Bergman & Associés Clerk: Mai Nguyen. Courtroom: Pierre-Basile-Mignault.

HEARING 1 :59 Commencement of the hearing. Both files 500-09-026706-176 and 500-09-026727-172 are jointly heard. The attendance of Mtre Caron and Charron was not expected for today’s hearing. Submissions by Mtre Bergman. 2 :07 Exchanges between the Court and Mtre Bergman. 2 :42 Submissions by Mtre El Masri. 2 :43 Exchanges between the Court and Mtre El Masri. 3 :33 Rebuttal by Mtre Bergman.

3 :35 Recess of the hearing. 3 :52 Resumption of the hearing. 3:53 BY THE COURT: Judgment – see page 5. 3:57 Conclusion of the hearing. Mai Nguyen Clerk BY THE COURT JUDGMENT [ 1 ] Respectfully stated, the trial judge erred in finding the appellant Schmerer liable, in part, for her own losses relying on the doctrine of inexcusable error (paragr. [187] and [188] of the judgement).

While articles 1400 and 1401 C.c.Q . were relevant to the appellant Schmerer’s failure to take proper cautionary measures in her contractual relationships with Sécur Finance and Sifaben Hypothèque S.E.C., the respondent Silver was a third-party to those contracts. [ 2 ] The judge found, as a matter of fact, that the respondent Silver committed a fraud against the appellant Schmerer that induced her to mistakenly sign the financing agreements (see e.g., paragr. [157] and [181]). Mr. Silver was her accountant and, as such, he had contractual and reglementary duties to act loyally and honestly towards his client.

The judge found, quite rightly, that he violated those obligations (paragr. [178]). See, generally, Jean-Louis Baudouin, Patrice Deslauriers and Benoît Moore, La responsabilité civile, vol. 2 : Responsabilité professionnelle, 8 th ed. (Cowansville : Ed. Yvon Blais, 2014) n ⁰ 2-182 and 2-189. [ 3 ] The appellant Schmerer’s errors, in the particular circumstances of this case, cannot be raised as a defence by the accountant, acting as a fraudster to his personal advantage, to reduce his liability towards his client who fell prey to his trickery. As the judge found, appellant Schmerer’s errors were caused by Mr.

Silver as a result of the fraud (paragr. [171]). The judge found that the accountant Silver, mindful of his client’s vulnerability and of her trust in his counsel, purposefully manipulated Ms. Schmerer to his own advantage in violation of his professional duty to her.

It was mistaken – again, respectfully stated – for the judge to reduce that contractual liability using principles of inexcusable error, or as a matter of extracontractual liability (see art. 1458 C.c.Q . ). [ 4 ] No reviewable error, however, has been shown in the judge’s discretionary decision not to award extrajudicial fees pursuant to the applicable jurisprudence, either as an abuse of procedure or as abuse more broadly considered. [ 5 ] Given the limited character of the joint records of appeal, the Court is unable to conclude, as a matter of fact and contrary to the judge’s finding, that the respondent Russotti committed a fraud.

FOR THE FOREGOING REASONS, THE COURT: [ 6 ] ALLOWS the appeal of Sharon Schmerer (500-09-026706-176), in part, for the sole purpose of replacing paragraphs [209] and [210], as follows: [209] CONDAMNE le défendeur Jeffrey Silver à payer à la demanderesse Sharon Schmerer la somme de 250 000 $, plus 100% des intérêts que Sharon Schmerer doit verser à Sécur Finance inc. dans le dossier n ⁰ 540-17-005183-115, selon le jugement du 28 février 2012, tel que modifié par le présent jugement; [210] CONDAMNE également le défendeur Jeffrey Silver à payer la somme de 15 000 $ à la demanderesse Sharon Schmerer, avec intérêts et indemnité additionnelle, à compter de l’assignation dans le dossier n ⁰ 540-17-008228-131. [ 7 ] DISMISSES Jeffrey Silver’s appeal in the file 500-09-026727-172; [ 8 ] THE WHOLE , with legal costs in both appeals against the respondent Silver.

NICHOLAS KASIRER, J.A.

JOCELYN F. RANCOURT, J .A. STEPHEN W. HAMILTON, J.A.