2014 QCCQ 3600, 2014 QCCQ 3600

Burlacu c. Lafrenière 2014 QCCQ 3600 COURT OF QUÉBEC Small Claims CANADA PROVINCE OF QUÉBEC DISTRICT OF GATINEAU LOCALITY OF GATINEAU Civil Division No. 550-32-020991-136 DATE: April 25, 2014 ______________________________________________________________________ PRESENT: THE HONOURABLE JEAN FAULLEM J.C.Q. ______________________________________________________________________ ALEXANDRU IOAN BURLACU Defendant v.

JEAN LAFRENIÈRE and 2752-2598 QUÉBEC INC. and LAURENT LABRIE Plaintiffs ______________________________________________________________________ JF 1075 JUDGMENT ______________________________________________________________________ [ 1 ] On May 4, 2010, Alexandru Ioan Burlacu purchased from 2752-2598 Québec inc., doing business under the name Les Entreprises Laurent Labrie (hereinafter “ Entreprises Labrie ”), a condominium located in the Place de la Cité housing complex in Gatineau. [ 2 ] Mr.

Burlacu alleged that the deed of sale he signed on May 4, 2010 granted him only an imperfect right to use a parking space, whereas the promise to purchase accepted by Entreprises Labrie granted him exclusive ownership of a parking space. [ 3 ] Mr. Burlacu is claiming solidarily from Entreprises Labrie, its director and shareholder Laurent Labrie, and Mtre. Jean Lafrenière, the notary executing the sale, $7000 in damages for the following reasons: 1. The loss of the right of ownership of the parking space; 2. The increase in his condominium fees; 3. Stress, trouble and inconvenience. [ 4 ] Mr.

Burlacu explained his claim in detail in a handwritten document, Exhibit P-11, accompanying his claim. [ 5 ] In defence, Entreprises Labrie and Mr. Laurent Labrie personally alleged that the preliminary contract dated April 5, 2010 granted a right to use a parking space, not a right of ownership of it. [ 6 ] In his separate defence, notary Lafrenière alleged that he fulfilled his mandate in accordance with the provisions of the preliminary contract, and his professional obligations. He added that he explained to Mr. Burlacu each of the clauses of the deed of sale. I.

Questions in dispute [ 7 ] The questions in dispute are as follows:

A. Can Mr. Burlacu claim from the defendants the increase in condominium fees that he must pay the Syndicat des copropriétaires? B. Does the preliminary contract for purchase of the condominium grant Mr. Burlacu a right of ownership or of use of a parking space? C. If so, are the defendants liable for the damages alleged by Mr. Burlacu? D. What is the value of the damages to which Mr. Burlacu is entitled? II- Context and analysis A — Increase in the condominium fees [ 8 ] In paragraph 18 of his explanatory document, Exhibit P-11, Mr.

Burlacu indicated that, as co-owner and director of the Syndicat de copropriétaires Place de la Cité–1 (hereinafter the “ Syndicat ”), he is entitled to claim his share of the expenses incurred by the Syndicat because of the acts and decisions of the defendants. [ 9 ] Before being able to determine whether the defendants must pay Mr. Burlacu his share of the expenses incurred by the Syndicat, the Court must first rule on the question of M. Burlacu’s legal interest in claiming directly from the defendants the expenses of the Syndicat alleged in paragraphs 18

a) and

b) of Exhibit P-11. [ 10 ]

Article 55 of the Code of Civil Procedure (C.C.P.) prescribes that a person who asks the Court to rule on the existence of a legal situation must have a sufficient legal interest therein. [ 11 ] The right to obtain compensation for the damage alleged in paragraphs 18

a) and

b) of Exhibit P-11 belongs solely to the Syndicat, in accordance with

article 1081 of the Civil Code of Québec (C.C.Q.), which reads as follows: 1081. The syndicate may institute any action on the grounds of latent defects, faulty design or construction defects of the immovable or defects in the ground. In a case where the faults or defects affect the private portions, the syndicate may not proceed until it has obtained the authorization of the co-owners of those portions.

Where the defendant sets up the failure to act with diligence against an action based on a latent defect, such diligence is appraised in respect of the syndicate or of a co-owner from the day of the election of a new board of directors, after the promoter loses control of the syndicate. [ 12 ] Furthermore, under

article 1067 of the C.C.Q. , Mr. Burlacu must seek recourse from his Syndicat, where appropriate. [ 13 ] The evidence shows that all the work for which bills were filed in the record was performed at the request of the Syndicat. [1] [ 14 ] Moreover, Mr. Burlacu filed no document from the Syndicat in order to establish the amount of his share of the expenses paid by the Syndicat.

The Court was also not informed of the Syndicat’s intentions regarding a possible claim for expenses against the defendants, or of the breakdown of the expenses among the co-owners. [ 15 ] Therefore, the Court cannot allow that part of Mr. Burlacu’s claim, since the claim should be made by the Syndicat. B — Right of ownership of the parking space [ 16 ] One thing is certain, the deed of sale that Mr.

Burlacu signed on May 4, 2010 does not grant him any exclusive right of ownership to a parking space. [ 17 ] The co-ownership declaration signed on March 31, 2010 and published on April 7, 2010 indicates that the Syndicat has a right- of-way and parking servitude on a portion of the land. Note that its publication date and number are not identified in the document. [2] [ 18 ] The right-of-way and parking servitude was published on April 8, 2010. [ 19 ] Note that Mr. Burlacu signed the preliminary sales document on April 5, 2010, and it was accepted by Entreprises Labrie on that date.

At that point, neither the co-ownership declaration nor the right-of-way and parking servitude had been published. [ 20 ] Mr. Burlacu made sure that the following words were added to clause 2.1 of the preliminary contract: [TRANSLATION] “1 parking space included”. [ 21 ] The same indication is found in the descriptive sheet of the co-ownership units prepared by Entreprises Labrie. [3] [ 22 ] Simply from reading those words, the Court cannot determine whether they mean that the parking space mentioned grants the purchaser a right of use or a right of ownership of the parking space. Both

interpretations are possible. [ 23 ] According to

article 1425 of the C.C.Q., in interpreting a contract, the Court must seek the parties’ common intention, rather than focus on the literal meaning of the terms used. [ 24 ] In addition,

article 1432 of the C.C.Q. provides that a contract is interpreted in favour of the person who contracted the obligation, i.e. Mr. Burlacu in this case. [ 25 ] Mr. Burlacu said he discussed with the representative of Entreprises Labrie his intention to become the owner of the parking

space. For him, the addition to the contract of the words [TRANSLATION] “1 parking space included” means that he was granted a right of ownership of the parking space. [ 26 ] Mr. Burlacu added that, at that point, Entreprises Labrie did not give him a copy of the co-ownership declaration, which would be published only two days after the preliminary contract was signed. [ 27 ] The representative of Entreprises Labrie who negotiated the sale of the condominium unit with Mr.

Burlacu did not testify at the trial. [ 28 ] In addition, notary Lafrenière affirmed that, on May 4, 2010, he read the deed of sale in full and gave Mr. Burlacu some examples in order to explain the different parts of the deed. He could not recall whether he specifically discussed the question of the parking space or that of the nature of the associated rights. However, he did recall that he mentioned to him that all the clauses in the preliminary contract were reproduced in the sales contract. [ 29 ] In these circumstances, the Court concludes that the preliminary contract granted Mr.

Burlacu exclusive ownership of a parking space. C- The defendants’ liability [ 30 ] Since the same alleged facts and legal principles do not apply to the liability of all of the defendants, the Court will discuss each defendant individually. i. Entreprises Labrie [ 31 ] The liability of Entreprises Labrie toward Mr. Burlacu stems from the application of

article 1458 of the C.C.Q., which prescribes that every person has a duty to honour his or her contractual undertakings. [ 32 ] Given the Court’s conclusion in the preceding section, Entreprises Labrie is liable for the damage to caused Mr. Burlacu as a direct result of the fact that the deed of sale did not grant him exclusive ownership of the parking space. ii. Laurent Labrie personally [ 33 ] Mr. Labrie’s written contestation, submitted jointly with that of Entreprises Labrie, does not raise a distinct ground of defence from that of Entreprises Labrie. [ 34 ] Mr. Labrie was not present at the trial. [ 35 ] Mr. Labrie is a director and a shareholder of Entreprises Labrie. [ 36 ]

Article 977 C.C.P. provides for the following: 977. The judge instructs the parties summarily as to the applicable rules of evidence and the procedure that appears appropriate. On the invitation of the judge, the parties state their allegations and call their witnesses. The judge examines the parties and the witnesses and gives them equitable and impartial assistance so as to render effective the substantive law and ensure that it is carried out . [Emphasis added.] [ 37 ]

Article 309 of the C.C.Q. stipulates that legal persons, like Entreprises Labrie, have a legal personality distinct from that of their directors and shareholders.

Barring exceptions, the undertakings of legal persons bind only themselves. [ 38 ] However, it is acknowledged that a majority shareholder and director of a company can incur personal liability pursuant to the provisions of the C.C.Q. [ 39 ] In a text cited many times by the courts, particularly the Court of Appeal in Groupe immobilier Gazaille inc. [4] and more recently in Pincourt (Ville de) , [5] Professor Martel teaches the following: «La responsabilité personnelle d'un individu qui est actionnaire majoritaire et administrateur d'une compagnie peut être retenue dans les circonstances suivantes : Il s’est porté caution d'une obligation contractuelle de la compagnie; Il a lui-même commis une faute entraînant sa responsabilité extracontractuelle, par exemple en faisant de fausses représentations ou en remettant des documents falsifiés;»

Il a activement participé à une faute extracontractuelle de la compagnie (ce qui se présume s'il est administrateur unique) ; Il a utilisé la compagnie qu'il contrôle comme écran, comme paravent pour tenter de camoufler le fait qu'il a commis une fraude ou un abus de droit ou qu'il a contrevenu à une règle intéressant l'ordre public; en d'autres termes, l'acte apparemment légitime de la compagnie revêt, parce que c'est lui qui la contrôle et bénéficie de cet acte, un caractère frauduleux, abusif ou contraire à l'ordre public. »

L'article 317 ne s'applique que dans le dernier de ces cas. Le premier est régi par les articles 2333 et suivants, le deuxième par l'article

1457, et le troisième par les articles 1457 et 1526. Quand on regarde de près, on constate que sur la cinquantaine de prétendus cas de " levée du voile corporatif " répertoriés depuis le début de 1994, une infime minorité se range dans la dernière catégorie et mérite vraiment cette appellation. [6] [ 40 ] For the reasons explained below, the evidence submitted in this case does not make it possible for the Court to conclude that Mr. Labrie is personally liable. [ 41 ] Firstly, Mr. Labrie did not stand surety for the obligations of Entreprises Labrie. [ 42 ] Secondly, Mr. Labrie did not negotiate directly with Mr.

Burlacu. He made no false representation to him and did not give him falsified documents. Thus, Mr. Labrie committed no fault that could incur his personal liability. [ 43 ] Thirdly, since the alleged fault of Entreprises Labrie is contractual in nature, Mr. Labrie did not participate in an extracontractual fault of the company. [ 44 ] Lastly, in the same way, Mr. Labrie cannot be reproached for using the company to conceal fraud or abuse of a right. Furthermore, no rule involving public order was violated. [ 45 ] Accordingly, Mr. Burlacu’s claim regarding Mr. Labrie is dismissed. However, Mr.

Labrie is not entitled to obtain court costs, since he did not attend the hearing and did not file a separate contestation from that of Entreprises Labrie. iii. Notary Lafrenière [ 46 ] Sections 10 and 11 of the Notaries Act [7] state the following: 10. A notary is a public officer and takes

part in the administration of justice. A notary is also a legal adviser. The mission of a notary , in his or her capacity as a public officer, is to execute acts which the parties wish or are required to endow with the authenticity attaching to acts of public authority, to provide such acts with a fixed date, and to keep all acts executed en minute in his or her notarial records and issue copies of or extracts from them. 11.

In his or her role as a public officer, a notary is duty-bound to act impartially and to advise all parties to an act which the parties wish or are required to endow with authenticity. [ 47 ] Mr.

Burlacu first alleged that notary Lafrenière did not adequately reproduce in the May 4, 2010 deed of sale his right of ownership of the parking space recognized in the preliminary contract. [ 48 ] It is acknowledged that a notary must reproduce in a deed of sale the wishes expressed by the parties. [8] [ 49 ] In the case at bar, notary Lafrenière had to draw up the deed of sale in accordance with the documents he had in his possession.

But both the co-ownership declaration of March 31, 2010 and the right-of-way and parking servitude of April 6, 2010 confirm that the parking spaces are vested in the Syndicat by means of a conventional servitude. Those documents were not in Mr. Bulacu’s possession at the time that the deed of sale was signed. [ 50 ] It was only after hearing the parties and in interpreting their intentions that the Court concluded that Entreprises Labrie sold Mr. Burlacu a parking space. The notary did not have that power of

interpretation. [ 51 ] Therefore, the Court concludes that notary Lafrenière committed no errors in preparing his May 4, 2010 deed of sale. Furthermore, note that all the subsequent corrective deeds prepared by notary Lafrenière, at the request of the Syndicat, confirm the existence of a servitude for all the condominiums’ parking spaces. [ 52 ] Secondly, Mr. Burlacu reproaches notary Lafrenière for not telling him that the deed of purchase that he was about to sign would make him lose the rights he held under the preliminary sales contract. Mr.

Burlacu thus claimed that notary Lafrenière did not respect his duty to advise him. [ 53 ] Professor Patrice Deslauriers has written the following about a notary’s duty to advise: « Le devoir de conseil est défini comme une "obligation à la fois morale et légale qui incombe au notaire d'éclairer les parties, suivant leurs besoins respectifs et les circonstances particulières de chaque cas, sur la nature et les conséquences juridiques parfois même économiques de leurs pactes et conventions, ainsi que sur les formalités requises pour assurer leur validité et leur efficacité».

Il s'agit d'une obligation de moyen qui se veut un devoir de renseignement, d'information, de recommandation et de protection. Cette obligation peut être solidaire et d'autant plus importante lorsque le notaire est au courant de certains problèmes. (…) Par contre, si le droit paraît incertain il ne sera pas fait grief au notaire d'une faute que dans le cas ou il aura adopté "une ligne de conduite que n'aurait pas adoptée un notaire raisonnable, diligent et prudent".

À cet égard, même si la position adoptée par le notaire se voyait renversée ultérieurement par les tribunaux, le notaire ne sera pas inquiété d'avoir choisi une position, si cette dernière était raisonnable. » [9]

[ 54 ] Notary Lafrenière read and explained the deed of sale that Mr. Burlacu was about to sign. As mentioned earlier, notary Lafrenière could not, from all the deeds and information he possessed, conclude that Mr. Burlacu held a right of ownership to the parking space, despite the terms of the preliminary contract. [ 55 ] Notary Lafrenière cannot be held liable for the error of the representative of Entreprises Labrie in regard to Mr. Burlacu. [ 56 ] Before concluding this section, the Court will rule on the part of the claim for trouble and inconvenience sustained by Mr. Burlacu in regard to the notary. Mr.

Burlacu claimed damages for pain and suffering as a result of the notary’s refusal to discuss the matter with him. [ 57 ] Firstly, notary Lafrenière participated actively in the preparation and writing of the corrective documents in order to clearly specify the Syndicat’s rights as regards the right-of-way and parking servitude. [ 58 ] However, after the corrective deeds were produced, the notary refused to continue to communicate with Mr. Burlacu.

The notary admitted that fact in his January 10, 2013 letter to the Chambre des notaires du Québec in response to the Syndicat’s complaint about him. [ 59 ] However, the Court must also dismiss that part of Mr. Burlacu’s claim regarding notary Lafrenière since the claim should have been made by the Syndicat. [ 60 ] In the framework of his discussions and negotiations with the notary, Mr. Burlacu acted as representative of the Syndicat. [ 61 ] The letters that Mr.

Burlacu sent the assistant syndic of the Chambre des notaires on September 30, 2012 and February 18, 2013 clearly indicate that he was acting as secretary of the Syndicat. [ 62 ] The legal opinion that Mr. Burlacu requested from Mtre. Dubreuil was also requested by the Syndicat. [ 63 ] As mentioned in the first

section of the judgment, recourse for damages stemming from the acts of notary Lafrenière on behalf of the Syndicat should be sought by the Syndicat, not by Mr. Burlacu. [ 64 ] Accordingly, the Court dismisses Mr. Burlacu’s recourse regarding notary Lafrenière with court costs set at $156 representing, the amount of the law stamp paid for by notary Lafrenière for his contestation. D- Value of the damages to which Mr. Bulacu is entitled from Entreprises Labrie [ 65 ] Mr.

Burlacu submitted no evaluation of the reduction in the value of his condominium as a result of the loss of the right of ownership of the parking space. [ 66 ] A deed of sale entered into between the Syndicat and one of the co-owners of the immovable on March 28, 2013 shows that the right of use of such a parking space has a certain monetary value. The Syndicat bought back the right of use of parking space No. 13, which was, however, in dispute, for $3250. [ 67 ] Mr.

Burlacu holds exclusive use of a parking space. [ 68 ] Although the Court suspects that the value of a parking space held as an exclusive owner may be greater than that held pursuant to a servitude, it cannot determine the difference on its own initiative. [ 69 ] Since it cannot establish the market value of a right of ownership of the parking space, the Court cannot grant compensation in that regard. [ 70 ] It is up to a person who wishes to defend a right to demonstrate, by preponderant evidence, the elements in support of that right, in accordance with articles 2803 and 2804 of the C.C.Q. [ 71 ] Despite everything, Mr.

Burlacu is entitled to moral damages as a result of the steps he took with Entreprises Labrie and other intervening parties in order to have his right of exclusive ownership of the parking space recognized. [ 72 ] Mr. Burlacu amply testified about the inconveniences he has experienced in that regard. [ 73 ] Hence given the foregoing, the Court believes that a comprehensive compensation of $1500 is adequate as moral damages resulting from the impossibility for Mr.

Burlacu to become the owner of the parking space because he was not properly informed of his rights, both when the preliminary contract was signed and when the sales contract was signed, and the refusal of the representatives of Entreprises Labrie to discuss his various claims with him. [ 74 ] THEREFORE, THE COURT: [ 75 ] ALLOWS the claim in part; [ 76 ] ORDERS 2752-2598 Québec inc. to pay Alexandru Ioan Burlacu $1500 at the legal rate, plus the additional indemnity provided for in

article 1619 of the Civil Code of Québec as of February 19, 2013; [ 77 ] ORDERS 2752-2598 Québec inc. to pay Alexandru Ioan Burlacu court costs of $167; [ 78 ] DISMISSES the claim in regard to the defendant Laurent Labrie, without costs; [ 79 ] DISMISSES the claim in regard to Jean Lafrenière;

[ 80 ] ORDERS Alexandru Ioan Burlacu to pay Jean Lafrenière court costs set at $156. __________________________________ JEAN FAULLEM J.C.Q. Date of hearing: January 27, 2014