2015 QCCQ 13256, 2015 QCCQ 13256

Hasanie c.

Shah 2015 QCCQ 13256 COURT OF QUEBEC CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-22-211912-145 DATE: December 4, 2015 ______________________________________________________________________ IN THE PRESENCE OF THE HONOURABLE DOMINIQUE GIBBENS, J.C.Q. ______________________________________________________________________ ali abbas hasanie Plaintiff v. ali afzal shah Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Plaintiff claims from Defendant an amount of $53,175, reduced at trial to $42,394.19, as remuneration for an alleged verbal contract pursuant to which Defendant mandated Plaintiff to act on his behalf in relation to an insurance claim following a fire that seriously damaged his home. [ 2 ] Defendant admits the existence of the contract, but claims that he never agreed to remunerate Plaintiff, who was to act gratuitously. [ 3 ] At the onset of the trial, Defendant objected to Plaintiff’s testimony to prove the terms and conditions of the contract.

The Court allowed Plaintiff’s testimony, as well as Defendant’s rebuttal testimony, under reserve of the objection. For the reasons set out below, the Court has concluded that this evidence is admissible. FACTUAL CONTEXT [ 4 ] Since approximately 2004, Plaintiff has been providing accounting and general business advice on a consulting basis.

He also provided management and financial consulting services through a partnership doing business under the name of Hassanie & Associates. [1] [ 5 ] Prior to that, Plaintiff acquired approximately 25 years of cumulative experience as corporate controller and VP, Administration at the Provigo Group and at Thomas & Betts.

His responsibilities there included insurance matters and he handled many insurance claims on behalf of these companies. [ 6 ] On December 13, 2011, a fire occurred at Defendant’s home, causing serious damage. [ 7 ] At that time, Plaintiff and Defendant had known each other for more than 30 years. They were members of the same religious community and attended the same mosque, but although they saw each other frequently, they were not close friends.

Plaintiff was also providing general business and accounting advice to Defendant’s son and nephews. [ 8 ] Plaintiff and Defendant were both attending a community gathering on the evening of the fire. That evening, Plaintiff spoke briefly to Defendant and his son and offered to act on Defendant’s behalf to negotiate the insurance claim that would inevitably arise from the fire.

He believed Defendant would be interested to hire him because he had gone through major heart surgery just months earlier. [ 9 ] The next day, on December 14, 2011, Plaintiff met with Defendant to further discuss his offer. [ 10 ] The parties’ conflicting accounts of what was discussed and agreed during this meeting are at the heart of the dispute. [ 11 ] On the one hand, Plaintiff claims that after discussing the nature of his proposed role, namely to assess the damage to the property, prepare the claim(

s) to be filed with Defendant’s insurer, TD Insurance, and negotiate with TD Insurance and the investigators and claims adjusters involved to maximize the indemnity, he explained to Defendant that his requested fee was 10% of any amount that would be approved by the insurance company as an indemnity. He also explained that the fee would only be payable once the insurance process had been completed.

He claims that this financial condition was clear and that Defendant accepted it when he retained him to act on his behalf. [ 12 ] On the other hand, Defendant claims that Plaintiff offered his services without asking for any remuneration. He explains that this was because Plaintiff had no experience handling insurance claims and that accompanying Defendant through the process represented an opportunity for him to gain experience. Defendant claims that a fee was never discussed and that he never agreed to remunerate Plaintiff.

[ 13 ] Although the issue of remuneration is vigorously contested, it is clear from the evidence that Plaintiff was retained during this meeting to handle the insurance claim on behalf of Defendant. In fact, Defendant and his wife, Mrs.

Kalzeem Shah, signed a written authorization allowing Plaintiff to represent them vis-à-vis the insurance company, which reads as follows: “We the undersign [sic] hereby attorise [sic] Ali Abbas Hussanie of Hussanie & Associates to handle the insurance claim on our behave [sic] for our property located on [sic] […] , Laval, Quebec, […] .” [2] [ 14 ] Plaintiff explains that over the next several months, he worked actively on the insurance claim.

He met frequently with Defendant and other family members, visited the home several times, had numerous meetings and telephone conversations with various contractors to establish the estimated costs of repairs and reconstruction of the home, prepared the claims for damage to the home and its contents, reviewed proposed estimates and negotiated with TD Insurance and its representatives.

He was also involved in the settlement of the temporary relocation of Defendant’s family. [ 15 ] All in all, Plaintiff claims that he worked a total of 348 hours on Defendant’s insurance claim. [3] [ 16 ] Defendant claims this is seriously exaggerated and that Plaintiff’s involvement was limited to between 5 and 10 hours of work consisting of sending a few emails and holding a few 15-minute meetings. [ 17 ] Over the course of 2012, Defendant received from TD Insurance a total indemnity of $397,366.11 detailed as follows: ➢ Clothing and immediate necessities $10,000.00 ➢ Rent for relocation of the family $21,000.00 ➢ Debris removal $1,926.32 ➢ Contents of home $189,500.00 ➢ Actual cash value of damages $173,641.32 ➢ Other $1,298.47 TOTAL: $397,366.11 [4] [ 18 ] On October 3, 2012, Plaintiff issued an invoice of $42,394.19 for his services relating to the insurance claim. [5] This represents 10% of the total indemnity allegedly approved by TD Insurance.

Defendant refused to pay this fee, denying that he had agreed to it. [ 19 ] On September 16, 2013, Plaintiff demanded payment of the outstanding amount of $42,394.19 within five days, failing which he would institute legal proceedings and claim fees on an hourly basis. [6] [ 20 ] On May 6, 2014, Plaintiff filed suit against Defendant. Although he originally claimed $53,175, representing fees calculated on an hourly basis and expenses, [7] he reduced the amount to $42,394.19 at trial. [ 21 ] On June 17, 2014, Defendant presented to the Court a

summary of his grounds of defence to the action, stating the following: “The Plaintiff had only a limited mandate and not a complete mandate; there was no agreement on fees; The invoice presented does not reflect the hours and work and is excessive.” [8] questions in issue [ 22 ] These facts and the position of the parties call for the resolution of the following questions:

a) Is Plaintiff’s testimony admissible to prove the terms and conditions of the verbal contract between the parties?

b) Has Plaintiff met the burden of proving that Defendant agreed to a 10% fee or to any other remuneration?

c) Is Plaintiff entitled to the amount claimed? ANALYSIS

a) Is Plaintiff’s testimony admissible to prove the terms and conditions of the verbal contract between the parties? [ 23 ] Defendant objects to the admissibility of Plaintiff’s testimony on the basis of articles 2862 and 2865 of the Civil Code of Québec (« C.C.Q. »), which read as follows: 2862. Proof of a juridical act may not be made, between the parties, by testimony where the value in dispute exceeds $1,500.

However, in the absence of proof in writing and regardless of the value in dispute, proof may be made by testimony of any juridical act where there is a commencement of proof ; proof may also be made by testimony, against a person, of a juridical act executed by him in the ordinary course of business of an enterprise. 2865.

A commencement of proof may arise from an admission or writing of the adverse party , his testimony or the production of real evidence that gives an indication that the alleged fact may have occurred . [Our emphasis] [ 24 ] Plaintiff submits that testimonial evidence is allowed here because Defendant made a judicial admission as to the existence of the contract and that this admission, together with the written authorization signed by Defendant and his wife allowing Plaintiff to act on their behalf vis-à-vis the insurance company, [9] constitute a commencement of proof.

[25] Defendant responds that neither his admission as to the existence of the contract, nor the written authorization, constitute a validcommencement of proof because they do not render probable the fact that the oral evidence is intended to prove, namely that the contractwas an onerous contract. [26] Respectfully, the Court disagrees with Defendant’s reasoning for the following reasons. [27] It is important to note that Plaintiff’s testimony is not offered to prove the existence of a contract but, rather, to establish theterms and conditions of that contract.

Notably, it is offered as proof that Defendant agreed to the alleged fee of 10%. As to the existenceof the contract, Defendant made a judicial admission (reproduced above at paragraph 22) and, consequently, Plaintiff was not required toprove it.

Defendant’s contestation – and the need for the testimonial evidence offered by Plaintiff – concerns the terms and conditions ofthe contract and, more particularly, whether it was gratuitous or not. [28] This distinction is important, because our Courts have recognized that where the existence of a contract is admitted and thecontestation is limited to its contents, testimonial evidence is admissible to prove such contents. [29] The current state of the law on this issue is well summarized by Professor Léo Ducharme in his treatise entitled Précis de lapreuve,[10] in the context of a discussion on the effects of certain admissions and when they can give rise to testimonial evidence: “1024.

Qu’en est-il maintenant en ce qui concerne l’aveu qualifié? Il existe un cas où l’aveu qualifié même indivisible équivaut à uncommencement de preuve : c’est lorsqu’une personne poursuivie en exécution d’un contrat admet le contrat en question, mais prétendqu’il avait un contenu différent. Cette règle a été posée par la Cour suprême dans l’affaire Campbell c. Fraser Young [(1902) (SCC), 32 R.C.S. 547].

Dans cette affaire, l’appelant, en qualité de mandataire, avait administré des biens d’une succession etprétendait que les intimés s’étaient engagés à lui payer la somme de 750 $ par année, ainsi qu’un certain pourcentage des revenus perçusà

titre de commission. Les intimés, tout en reconnaissant qu’ils s’étaient entendus sur une certaine rémunération, plaidaient que lestermes de cette entente étaient différents de ceux évoqués par l’appelant. Il s’agissait donc de savoir si l’appelant pouvait prouver partémoins l’entente en question. Devant les tribunaux inférieurs, on avait jugé cette preuve irrecevable en invoquant l’absence d’uncommencement de preuve par écrit et le principe de l’indivisibilité de l’aveu. La Cour suprême a jugé que lorsqu’un contrat est admis etque la contestation porte uniquement sur son contenu, la preuve testimoniale est recevable sans que la

partie ait à justifier d’uncommencement de preuve par écrit. Cette cour est également d’avis que le problème de l’indivisibilité de l’aveu ne se posait pas enl’espèce. 1025. Pour en arriver à cette double conclusion, il fallait nécessairement que pour la Cour suprême, l’aveu qualifié des défendeurs eûten tant que tel, c’est-à-dire en tant qu’aveu indivisible, la valeur d’un commencement de preuve par écrit. Cette interprétation nous paraîtpleinement justifiée.

En effet, lorsqu’il y a accord entre les parties sur la nature même du contrat intervenu entre elle et que leurdésaccord porte exclusivement sur l’étendue de leurs obligations réciproques, le contrat tel qu’allégué acquiert dès lors un caractère devraisemblance et il en résulte un commencement de preuve donnant ouverture la preuve testimoniale. 1026. Depuis l’arrêt de la Cour suprême dans l’affaire Campbell c.

Fraser Young [citation omise], il semble bien établi en jurisprudenceque lorsque le défendeur reconnaît l’existence du contrat que le demandeur allègue contre lui, mais non ses modalités, il en résulte uncommencement de preuve permettant au demandeur de prouver par témoignage ces modalités. Il en est notamment ainsi lorsque lacontestation porte sur l’un des faits suivants : la rémunération convenue […], la durée de la convention […] ou l’étendue d’une desobligations mises à la charge d’une

partie […].” [Our emphasis] [30] Although the decisions referred to by Professor Ducharme dealt with

article 1233 of the Civil Code Lower Canada,[11] theCourt sees no reason to make a distinction regarding the legal principles they establish. [31] Contrary to what Professor Ducharme suggests in paragraph 1025 cited above, however, the Supreme Court did not consider inCampbell that the admission as to the existence of the contract constituted a commencement of proof. Rather, it considered that nocommencement of proof was required to allow for the testimonial evidence at issue: “It is not a commencement of proof of a contract that is in question. There is as full a proof of it as can be.

Or rather, the appellant hadnot to prove it, since it is admitted, pleaded by the respondents themselves. But, would argue the respondents, we admitted a contract for$200, not one for $500.

That is so, but when once a contract is admitted, no commencement of proof in writing is required for theadmissibility of oral evidence on the amount of the consideration thereof. ”[12] [Our emphasis] [32] Applying these principles to the facts of this case, the Court concludes that given Defendant’s admission as to the existence ofthe contract, a commencement of proof was not needed to allow Plaintiff’s testimony on the terms and conditions of said contract. [33] Moreover, even if a commencement of proof was considered necessary, the Court is of the opinion that the written authorizationsigned by Defendant and his wife,[13] combined with Defendant’s admission as to the existence of the contract, do render the existenceof the alleged contract (a mixed contract of mandate and services with a 10% remuneration) probable and thus constitute acommencement of proof within the meaning of

article 2865 C.C.Q.

b) Has Plaintiff met the burden of proving that Defendant agreed to a 10% fee or to any other remuneration? [34] The Court must now consider all of the evidence and determine whether Plaintiff has met his burden of proving, on a balance ofprobabilities,[14] that Defendant agreed to pay the alleged fee of 10% of the insurance indemnity. [35] The position of the parties in this respect is based almost entirely on their conflicting testimony regarding the December 14,2011 meeting. The Court must therefore consider the credibility of their testimony and determine which version of the facts is more

probable. [ 36 ] Plaintiff testified that after he explained to Defendant the nature of the services that he was offering, he specifically explained that the requested fee to handle the insurance claim was 10% of any amount that would be approved by TD Insurance as an indemnity, payable once the insurance claim was settled. [ 37 ] He stated that Defendant had no reaction when he explained the fee, but that he was fully aware of it when he decided to accept Plaintiff’s offer and retain him to act on his behalf and handle the claim, thereby implicitly agreeing to this financial condition. [ 38 ] Defendant, on the other hand, denies that there was any discussion about a fee during the December 14, 2011 meeting or at any other time.

He claims that Plaintiff offered his services without asking for any remuneration because he did not have any prior experience with insurance claims and, consequently, following Defendant through the insurance claim process was an opportunity for him to learn.

Defendant’s expectation was that Plaintiff would be working on the claim gratuitously. [ 39 ] After having considered all of the evidence, the Court prefers Plaintiff’s version for the following reasons. [ 40 ] Respectfully, the Court did not find Defendant’s testimony to be very credible or convincing and found it in certain respects highly improbable. [ 41 ] For instance, Defendant stated that Plaintiff offered his services gratuitously because he had no experience with insurance claims and it was an opportunity for him to learn something.

On cross-examination, he even stated that Plaintiff had told him more than twice that he had no experience at all with any insurance matters (whether commercial or residential). This seriously affects his credibility in light of Plaintiff’s uncontested 25 years of experience dealing with commercial insurance claims. Why would Plaintiff tell Defendant that he had no experience with insurance claims? [ 42 ] Defendant’s alleged expectation that Plaintiff would work gratuitously is not credible either. There was no reason for Plaintiff to be handling the insurance claim gratuitously.

The parties were admittedly not close friends. Defendant knew that Plaintiff was being remunerated for the accounting and management services he was providing to his son and nephews.

It is not credible that Plaintiff would have been prepared to handle the claim gratuitously or that Defendant believed that he was. [ 43 ] Moreover, even if Plaintiff had accepted to act gratuitously at the outset, it seems improbable that he would have continued to act on behalf of Defendant when he saw the amount of work and the time needed to negotiate with TD Insurance to finalize the claim. [ 44 ] Defendant’s credibility is also affected by his testimony regarding the claims process.

His statement that Plaintiff’s involvement was limited to 5 to 10 hours of work consisting of sending a few emails and holding a few 15-minute meetings is simply not credible. [ 45 ] By contrast, the Court found that Plaintiff’s testimony to be credible and detailed both about what was discussed during the December 14, 2011 meeting and about his involvement in the insurance claim process that followed.

Although it is surprising that Plaintiff did not insist upon having a written contract signed to confirm the terms and conditions of the retainer, the Court accepts Plaintiff’s explanation that this would have been unusual between members of the religious community. [ 46 ] The Court therefore prefers Plaintiff’s testimony to that of Defendant and concludes that the 10% fee was explained to Defendant during the meeting of December 14, 2011 and was implicitly accepted by him when he accepted Plaintiff’s offer and retained him to handle the insurance claim. [15]

c) If so, is Plaintiff entitled to the amount claimed? [ 47 ] Plaintiff claims a fee of $42,394.19, which represents 10% of the total indemnity allegedly approved by TD Insurance. [16] No conclusive evidence was offered, however, to support his assertion that the indemnity approved by TD Insurance amounts to $423,941.89. [ 48 ] Under the circumstances and given that the evidence shows that the indemnity paid to Defendant amounted to $397,366.11, [17] Plaintiff’s fee must be limited to 10% of the indemnity received, namely $39,736.61.

FOR THESE REASONS, THE COURT: GRANTS the action; CONDEMNS the defendant Ali Afzal Shah to pay to the Plaintiff Ali Abbas Hasanie $39,736.61, together with interest at the rate of 5% plus the additional indemnity provided in

article 1619 of the Civil Code of Québec from September 16, 2013; WITH COSTS . __________________________________ DOMINIQUE GIBBENS, J.C.Q.

Me Roger Vokey SHAFFER & ASSOCIATES Attorney for Plaintiff Me Franco Tamburro ALEPIN GAUTHIER Attorney for Defendant Date of hearing: May 15, 2015