2017 QCCQ 339, 2017 QCCQ 339

Location Clairview c. Barbosa 2017 QCCQ 339 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division N°: 500-32-150033-159 DATE: January 26, 2017 ______________________________________________________________________ BY THE HONOURABLE VINCENZO PIAZZA, J.C.Q. ______________________________________________________________________ LOCATION CLAIRVIEW S.E.N.C. Plaintiff v.

HUGO BARBOSA AND LUIZA RATKOWSKA Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] What damages is Location Clairview s.e.n.c. (“Clairview”), a merchant, entitled to pursuant to the early rescission by the consumers, Mr. Barbosa and Ms. Ratkowska, of the lease of a motor vehicle? CONTEXT [ 2 ] On August 1 st , 2013, Mr. Barbosa and Ms. Ratkowska rented a Porsche Cayenne from Clairview, for a 48-month term, at a monthly rent of $595.00 [1] .

On March 17, 2015, they decided to return this vehicle to Clairview and terminate the lease [2] . [ 3 ] Clairview made some repairs to the vehicle, which cost $620.00 [3] , and on April 29, 2015, sold it to a third party, at the price of $23,400.00 [4] . [ 4 ] On May 11, 2015, Clairview invoiced Mr. Barbosa and Ms.

Ratkowska for its shortfall due to the early return of the vehicle [5] . [ 5 ] Clairview’s invoice, on which its claim herein is predicated, breaks down as follows: Balance of lease as of March 31, 2015 28 months x $595 $16,660.00 Residual $10,000.00 Total balance of lease owing $26,660.00 Repairs as per estimate $620.00 $27,280.00 Less sale price of vehicle ($23,400.00) $3,880.00 5% GST $194.00 9.975% PST $387.03 Shortfall on early return of vehicle $4,461.03 Less security deposit ($684.10) Total amount due $3,776.93 [ 6 ] Mr. Barbosa and Ms.

Ratkowska contest this method of calculation and plead that they owe nothing to Clairview. ANALYSIS [ 7 ] The relevant provisions of the Consumer Protection Act [6] read as follows: 150.17. The consumer may, during the leasing period and at his discretion, return the goods to the merchant. The contract is rescinded of right from the date of return of the goods, with the same consequences as a rescission under

section 150.15 . 150.15. If, following a notice of repossession, the voluntary return or forced repossession of the goods is effected, the contract is

rescinded of right from the date of such return. The merchant is not , in such a case, bound to return the amount of the payments due he has already received, and he cannot claim any damages other than those actually resulting, directly and immediately, from the rescission of the contract. The merchant is bound to minimize his damages. [Emphasis added by the Court.] [ 8 ] In the seminal case [7] on the

interpretation and application of these provisions, Mr.

Justice Rochon, writing for the Court of Appeal, outlined the method of calculation by a merchant of its damages resulting directly and immediately from the rescission of a lease where, as is the case here, the merchant opted to minimize its damages by selling the vehicle to a third party: [28] M'inspirant du plan d'argumentation de l'intervenant, j'exprime sous forme de formule la méthode de calcul qui découle de mon analyse : La totalité des versements périodiques 14 700,60$ ( + ) La valeur résiduelle indiquée au contrat + 16 674,00$ Sous-total : 31 374,60$ ( - ) Les montants de versements périodiques échus à la date de résiliation sans taxe (même si non perçus) - 5 308,55$ ( - ) Les frais de crédit non gagnés (calculés selon la méthode actuarielle) - 2 084,58$ ( - ) Le montant correspondant au montant le plus élevé entre le prix de revente ou la valeur résiduelle indiquée au contrat - 17 900,00$ Total : 6 081,47$ [ 9 ] Applying this method here, and even without considering the security deposit and the unearned credit fees ( “frais de crédit non gagnés” ), it appears that Clairview has not established that it has suffered any damages resulting directly and immediately from the rescission of the lease, within the meaning of the CPA: Total monthly instalments $28,560 ( + ) Residual value per the contract + $10,000 ( + ) Repairs (assuming they are due to the excessive usage of the car) + $620 Sub-total : $39,180 ( - ) Instalments accrued - $16 660 ( - ) Unearned credit fees (calculated in accordance with the actuarial method) - TBD ( - ) Sale price of vehicle - $23,400 Total : NEGATIVE

FOR THESE REASONS, THE COURT: DISMISSES the action; WITH COSTS in the amount of $127.00. __________________________________ VINCENZO PIAZZA, j.c.q. Date of hearing: January 24, 2017