2021 QCCQ 8590, 2021 QCCQ 8590

Lapointe c. Fondation Place Coco (Little Red Playhouse (Jardin d'enfants la Petite Maisonnette Rouge) 2021 QCCQ 8590 COURT OF QUÉBEC Small Claims Division CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTREAL TOWN OF MONTREAL Civil Division No: 500-32-708667-193 DATE: August 25, 2021 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ Lydia LAPOINTE Plaintiff v.

LA FONDATION PLACE COCO operating under the name THE LITTLE RED PLAYHOUSE (JARDIN D’ENFANTS LA PETITE MAISONNETTE ROUGE) Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ Parties and issues [ 1 ] The Plaintiff, Lynda Lapointe, the mother of a pre-school child, sues the Defendant, La Fondation Place Coco, which she designates in the proceedings as JARDIN D’ENFANTS LA PETITE MAISONNETTE ROUGE, claiming reimbursement of fees because of the resiliation of the contract for services to be rendered to the child in a programme he was enrolled in for the school year 2018-2019. [ 2 ] The Defendant brings a counter claim for $ 1,600. [ 3 ] The child was enrolled in a programme offered under the name “Little Red Playhouse” referred to in the registration form as “Morning Preschool September 2017 to June 2018”.

Obviously the form used was not updated, as there is no doubt that the programme was for the 2018-2019 school year. (D-1, signed August 18, 2018) [ 4 ] Mrs. Lapointe’s work commitments changed in mid-February 2019 requiring her to place her child in a full-day programme in a regular daycare centre. The child ceased attending the Little Red Playhouse on or about February 14, 2019. [ 5 ] Mrs.

Lapointe claims reimbursement of $ 1,700, based on the notion that she pre-paid for certain services which should be restituted on a pro-rata basis and that any costs for resiliation of the contract should be limited to $ 50, because of certain provisions of the Consumer Protection Act. (D-3, letter of demand of March 18, 2019) [ 6 ] The Foundation defends on the basis of stipulations set out in the registration form under the heading “CANCELLATION AND REFUND POLICIES FOR THE PRESCHOOL”. (D-1).

This document provides for a 50% reimbursement of installment #4 of $ 1,250. [ 7 ] The position initially taken by the Defendant was complex due to the fact that the Plaintiff had paid for other goods and services as well, which were not included in the programme tuition costs, such as lunches and social skills training as well as a non- refundable registration and supply fee.

In an email dated March 26, 2019 The Founder and Director, Sharon McCarry, showed a calculation based on a programme cost of $ 5,000, of which $ 3,230 in value had been received at the time of resiliation. [ 8 ] Her calculations give a balance of $ 1,055 after deductions from a total payment of $ 5,275 of which she offered to reimburse 25%, since no notice of cancellation was given. She offered a cheque for $263.75. [ 9 ] The Defendant’s administrator, Morgan Pudwell had given Mrs. Lapointe a different calculation in his email dated February 27, 2019. He had taken the position that because of a delayed payment

schedule agreed to, she had in fact underpaid by an amount $ 750, which she still owed, even taking into consideration a resiliation on February 18, 2019 ( the Monday after the last day of services). [ 10 ] In an email dated March 21, Sharon McCarry had claimed that she owed $ 885, but she offered a reimbursement of $ 125. She revised these numbers in an email message dated March 28, 2019, making a similar offer constituting a compromise from her earlier position. [ 11 ] In the defense and counter claim, yet another position is taken, a debt of $ 1,000 and a claim of legal fees of $ 600, for a total of $ 1,600.

The debt is based on a statement of account showing two unpaid amounts of $ 500 each billed Jan 3 and January 30 2019 respectively.

[ 12 ] The Foundation also makes an issue of the tax credit received by the parents, which is not germane to the problem: if, in the final analysis the parents have claimed too much tax credit in light of the resiliation, they have the responsibility of correcting the matter with the Revenue authorities. Analysis [ 13 ] It is no easy matter to understand the status of accounts between the parties. This is apparent from the various amounts claimed by the Foundation and the different attempts it made at settling for small balances.

The statement of account documents found within the exhibits (P-2 and D-2A) are hard to reconcile, because they show revenue totalling $ 5,275, (based, it would appear, on an accrual up to January 30, 2019) but only $ 4,275 of payments in the corresponding period. [ 14 ] Taking as a given that the $ 5,000 fee was based on a ten-month programme, a pro-rata cost would be $ 500 per month. The payment

schedule that the Plaintiff chose, which was slightly modified, provided for two initial payments each for double that amount before the programme began, and six subsequent payments of $ 500 each. The entire year’s services would therefore be paid up by the end of March. On a pro-rata basis, a reimbursement would be substantial. The Foundation challenges a pro-rata reimbursement, because its registration form treats the earlier payments as totally or partially non-refundable. [ 15 ] Sharon McCarry mistakenly informed the Defendant in one of her emails that she had chosen to pay monthly for 10 months.

In fact, by the time the contract was resiliated, 5 1/2 months into the school year, the Plaintiff had paid, according to one of Mrs. McCarry’s calculations (March 28), $ 5,160 ($ 5,275 minus a balance of $ 115 owing from the previous year) including a fee of $ 660 for lunch and social skills and a non-refundable registration fee of $ 75.00 and a supplies fee (stated in some places but not in others in the registration form as non-refundable) of 40$.

This computes to $ 4,385 toward the 10-month total of $ 5,000. [ 16 ] There is however no trace of a balance of $ 115 owing from the previous year, nor that any amount received was imputed to that amount in the ledger. [ 17 ] The accounting record (D-2A) shows payments of $ 4,275. This statement fails to take into account properly one of the receipts issued to Mrs. Lapointe for cash payments, for an amount of $ 500, that of Jan 25, 2019. The amount of $ 500 appears as a “statement” (invoice) rather than a payment.

Correcting this, the leger would show payments totalling $ 4,775 and a balance owing of zero as of January 30, 2019. Decision [ 18 ] In the Court’s determination, the stipulation in the registration form of non-refundable payments is not effective and enforceable. The clauses are altogether too complex and difficult to understand and inconsistent with each other. For example, in Option C on page 6, the only amount that is “Non-refundable” is the payment made at registration. If read with clause 3.2, it is the registration fee that is not refundable, not the entire payment.

This same clause speaks of the supply fees as being non-refundable, but in Option C on page 6, the $ 40 supply fee is not mentioned as being non-refundable, nor is the second payment of $ 1,040. [ 19 ] The examples given in the registration form of the financial impacts of resiliation are based on other payment schedules than the one applicable to the Plaintiff. [ 20 ] The Plaintiff paid one initial payment of $ 2,230 rather that two payments totalling $ 2,145, which adds further confusion to the document. [ 21 ] In the face of this confusion, the Court finds that the documents do not clearly support the Defendant’s position that it is entitled to a disproportionate payment when the contract is resiliated by the client. [ 22 ] Also, the contract does not give a clear indication that the client has renounced her option to resiliate the contract.

Retention of a disproportionate amount of the total ten-month fee is punitive. This is an adhesion contract and the (not-so clearly) stipulated penalties are not justified. [ 23 ] The Court will apply the general principles of contract resilitation. This type of contract is a contract for services. It can be resiliated at the option of the client, without the need to show cause. Upon resiliation, the value of the services provided up to that point are owing.

In this case the client had paid more than the pro-rata value of the services and this should be refunded as in any contract for services where the progressive payments result in an overpayment. If the total package of services paid for on a ten-month basis is quantified globally, it is $ 5,000 for the general service, $ 40 for the supplies and $ 660 for lunches and social skills training throughout the contract. This amounts to $ 5,700 or $ 570 per month. The registration fee of $ 75 is a one-time payment for an initial service that is given at the beginning.

Therefor the amount owing for the services rendered up to the time of resiliation is $ 75.00 plus 5.5 times $ 570 ($ 3,135), a total of $ 3,210. [ 24 ] Payments billed and received in the period total $ 4,775. A reimbursement of $ 1,565 is in order. WHEREFORE, THE COURT: CONDEMNS the Defendant to pay the Plaintiff $ 1,565 with interest at the legal rate, and the additional indemnity provided at

article 1619 of the Civil Code of Quebec , calculated from March 18, 2019; DISMISSES the Defendant’s Cross-Claim; CONDEMNS the Defendant to pay the Plaintiff’s judicial costs of $ 103 for the “droits de greffe”;

__________________________________ David L. Cameron, J.C.Q. Date of hearing: May 3, 2021