2021 QCCA 1426, 2021 QCCA 1426

Unofficial English Translation of the Judgment of the Court El Baroudi c. Di Perno 2021 QCCA 1426 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No.: 500-09-028542-199 ( 500-17-092985-160 , 500-17-092909-162) MINUTES OF HEARING DATE: September 24, 2021 CORAM: THE HONOURABLE GENEVIÈVE MARCOTTE, J.A. MARIE-JOSÉE HOGUE, J.A. PETER KALICHMAN, J.A. APPELLANTS / INCIDENTAL RESPONDENTS COUNSEL Kenza El Baroudi Groupe baroudi kenzA inc.

Mtre DANIELLE FERRON Mtre FADY TOBAN LANGLOIS LAWYERS Absent RESPONDENTS / INCIDENTAL APPELLANTS COUNSEL Mark di perno Nicholas di perno sportsinsurance.com inc. assure-moi.com inc. 7963734 canada inc. Mtre DOMINIQUE LAVIN Mtre CATHERINE RAMSAY-PIÉRARD ( Yulex, Avocats et Stratèges ) Absent On appeal from a judgment rendered on July 25, 2019, by the Superior Court, District of Montreal (the Honourable Michèle Monast) NATURE OF APPEAL: Labour – obligation of employee – dismissal – serious reasons – notice – damages – incidental appeal Court Clerk: René Gutknecht Courtroom: Antonio-Lamer HEARING

9:34 a.m. Start of hearing. Resumption of hearing from September 21, 2021. The parties were dispensed from being present at court. BY THE COURT: Judgment – see page 3.

End of the hearing. (signed) René Gutknecht, Court Clerk JUDGMENT [ 1 ] The appellant, Kenza El Baroudi (“El Baroudi”) appeals from a judgment rendered on July 25, 2019, by the Superior Court, dismissing her proceeding against the respondents and granting their proceeding against her and her accounting business, appellant Groupe Baroudi Kenza inc. (“GBK”), for the reimbursement of amounts illegally taken. [ 2 ] In that judgment, the judge acknowledged that the respondents had received $40,000 worth of accounting services from GBK, which she deducted from the amount to be reimbursed by the appellants and dismissed the respondents’ other claims for compensatory and punitive damages. [ 3 ] The respondents also obtained leave to appeal from that judgment by means of an incidental appeal. [1] Their appeal concerns only the dismissal of the claim for $50,000 arising from the appellant’s professional misconduct, which forced them to hire the services of a tax specialist, Ms.

Smirès, to redo and complete her work. [ 4 ] The background of the case is as follows. The appellant El Baroudi, who was hired as vice-president of finance and Chief Financial Officer for the respondent companies in November 2014, argued that she was dismissed without cause 13 months after being hired. She claimed payment from the respondents for unpaid salary pursuant to a second employment contract she alleged was concluded in May 2015 (which doubled her remuneration).

She also claimed severance pay, compensatory damages for injury to her reputation and the abusive resiliation of her contract, punitive damages, and the reimbursement of her attorney fees. [ 5 ] The respondent companies each sued El Baroudi and GBK for the reimbursement of amounts taken without authorization from the respondents’ bank accounts, by relying on the terms of a second employment contract and an agreement for accounting services that the respondents denied entering into. [ 6 ] After a trial that lasted seven days, four of which were devoted to the appellant’s testimony, the trial judge concluded that her dismissal was justified and that she was not entitled to severance pay, compensatory or punitive damages, or the reimbursement of her attorney fees. [ 7 ] According to the judge, the appellant El Baroudi was dismissed for serious reasons, that is, her incompetence, a breach of her duty of loyalty, and dishonesty.

Among other things, she mismanaged the companies, lacked organization and judgment, and was unable to identify priorities. [ 8 ] The judge also concluded that the parties had never entered into a second employment contract: it was a forgery or a document signed as a result of fraud committed by the appellant El Baroudi. Furthermore, the parties never agreed on the provision of accounting services by GBK.

However, she determined, based on the principle of unjust enrichment, that the respondents had received $40,000 worth of services from GBK and that this amount would be deducted from the $290,387.62 the appellants had to reimburse them. She therefore ordered the appellants to pay the respondents $250,387.62. [ 9 ] In her grounds for appeal, the appellant El Baroudi questions the trial judge’s assessment of the evidence as a whole. She argues that a distorting lens incited the judge to reject her [ translation ] “long and laborious” testimony and to wrongly accept only that of the respondents’ representatives.

She moreover refers to the documentary evidence and the testimony of third parties to support her position and compensate the weakness of her own testimony. [ 10 ] It is important, however, to repeat the reasons that led the judge to set aside the testimony of the appellant El Baroudi and instead accept that of Mark Di Perno to understand why she did so. [ translation ] [204] In this case, Baroudi testified before the Court for about four days. Her testimony was laborious. Her version of the facts was

contradicted on many points by the other witnesses . [205] The Court has come to the conclusion that she was not a credible witness and that her version of the facts concerning the existence of a new agreement and various other important elements was not reliable . [206] Many questions remained unanswered .

Her testimony was vague and imprecise on the nature of her task, the work she had to accomplish, the irregularities she noted in the accounting management of the company when she started working, the means she was supposed to take to correct them, the scope of the work that she performed, the information that she gave the other officers about the income and expenses of the company, the circumstances that led to the signing of document P-5A, the date on which this new agreement took effect, the reasons why she had to be paid by Sportsinsurance in the United States, in U.S. currency, even though she was not living there, and so on. [207] On several occasions, she was unable to offer clear answers to the questions she was asked or she simply chose not to answer them by changing the subject or by repeating what she felt was important to tell the Court . [208] Most, if not all , of her assertions about her rights and obligations towards the defendants and the defendants’ towards her, are based on preconceived ideas, opinions, or impressions rather than facts that have been proved . [209] The contradictions that exist between her testimony and those of the other witnesses are many .

They are not limited to the existence of a second contract.

They also concern several other subjects including : - The circumstances that led to the signing of contract P-4 and the reasons why contract P-5A was signed; - The date on which her job began and the work that was expected of her; - The state of the accounting when she began the job and the work she performed to remedy certain irregularities; - The approval of withdrawals made from the bank account of the company and its affiliates to pay her annual salary of US$220,000; - The existence of agreements concerning the provision of services, accounting and administration, by GBK and the invoicing of her overtime; and, - The circumstances of her dismissal. [210] She spoke at length about her knowledge and experience, the complexity of the task that she had to accomplish, the fact that she had been given “carte blanche” to redress the accounting, the quality of the work she performed and the many hours she worked, but in the end, she was unable to clearly explain the reasons why: - She was unable to prepare a budget or provide the directors with the monthly statements that would have informed them about the company’s operating income and expenses, including the withdrawals that she was making and the advances she was taking to pay GBK for several months; - the various versions of the preliminary financial statements that she prepared do not include the amounts she was paying herself as salary and other benefits; - the GBK invoices for the provision of accounting services and for Baroudi’s overtime were not disclosed or approved before being paid; and, - she could state that the financial position of Sportsinsurance and its affiliates was healthy when her job ended in January 2016, even though the financial statements of these companies still had not been prepared. [211] For all these reasons, the Court concludes that her testimony is not reliable and must be set aside . [212] The testimony of Mark Di Perno was not free of contradictions, but he testified with confidence and appeared sincere and reliable.

His testimony was convincing. He answered the questions he was asked frankly. His answers were clear and specific and his explanations were plausible.

He did not hesitate to admit that he should have been more vigilant and that in some respects, he had been negligent . [213] His assertions on the poor quality of Baroudi’s work were corroborated by the documentary evidence that was adduced in the record and by Smires’s testimony. [214] The Court is convinced that Mark Di Perno is telling the truth when he claims that he did not enter into any agreement with Baroudi to increase her annual salary to US$220,000 in January 2015 and that he did not sign contract P-5A in April-May 2015 . [215] It follows, logically, that contract P-5A is a forgery or that it was signed mistakenly as a result of fraud committed by Baroudi.

This last hypothesis appears more probable given the expert’s conclusions that the signature appearing on the last pages of the document is that of Mark Di Perno . [Emphasis added]

[ 11 ] Later in the judgment, the judge also emphasized the appellant El Baroudi’s failure to disclose GBK’s invoices to the respondent Sportinsurance and obtain the respondents’ prior approval before being paid. [ 12 ] In her arguments, the appellant El Baroudi asks the Court to ignore the weakness of her testimony by referring to various testimony or documents that should have, in her view, resulted in the rejection of respondent Mark Di Perno’s testimony, whereas the judge deemed it imperfect but credible and sincere. [ 13 ] In fact, even if we do not take into account the testimony of Mr.

Di Perno, the documents and other testimony to which the appellant refers do not establish that the parties had agreed on a second employment contract. [ 14 ] Furthermore, the judge took care to point out that the document P-5A, which the appellant presented as the second employment contract, appeared to have been cobbled together and included many irregularities.

It is important to point out in this respect that, according to the appellant’s version, the second contract was entered into in the spring of 2015 (April or May), even though the signatures are dated November 1, 2014, and the same document refers to two separate dates of coming into effect, that is, November 1 and 28, 2014, depending on the page consulted. [ 15 ] In this case, as no palpable and overriding error by the judge has been proved, her assessment of the testimony is owed deference.

Invoking the notion of the distorting lens does not change the high standard of review in such a situation. [2] [ 16 ] Furthermore, the appellant’s argument that the burden of proof allegedly shifts must be rejected as soon as the trial judge failed to recognize the authenticity of document P-5A.

Despite a handwriting expert report supporting her position, the appellant has failed to weaken the judge’s conclusion that there had been no agreement to double her remuneration. [ 17 ] That is also the case with regard to the judge’s conclusion that there was no verbal agreement on the provision of accounting services by GBK.

The appellant has also failed to show a palpable and overriding error by the judge who, despite this finding, still attributed a value of $40,000 to the accounting services rendered, which she charged to the respondents. [ 18 ] With regard to remunerating the appellant El Baroudi’s overtime, she could not, as a manager who was remunerated on an annual basis, claim the payment of overtime under the Act respecting labour standards , [3] unless she established that the salary she received was less than the minimum wage for each of the hours worked. [4] This was not proved here.

It is surprising, to say the least, that the appellant argues that she was entitled to a salary of US$220,000 (rather than $102,000 under her first employment contract) and, in the same breath, claims the payment of overtime. [ 19 ] With respect to the incidental appeal, the respondents allege that the judge forgot to address their claim in damages arising from the appellant’s professional misconduct, which forced them to incur fees of $50,000 to hire a tax specialist who redid and completed her work. [ 20 ] The judge’s analysis of the damages claimed by the respondents is succinct.

She refers only to the allegation relating to the appropriation of funds for which the respondents are already compensated through the order to reimburse. [ 21 ] Furthermore, according to the respondents, the amounts awarded do not take into account the injury arising from the appellant’s illegal retention of documents after her employment contract was resiliated or her failure to perform her work, which the judge noted, however, when she discussed the reasons for dismissal. [ 22 ] That is what led the respondents to state that in all likelihood she forgot to address this head of damages and that the Court could easily remedy that. [ 23 ] Yet, the leap from acknowledging that the appellant El Baroudi had not performed her tasks adequately, thereby justifying her dismissal, to concluding that El Baroudi committed a professional fault causing damage to the respondents, cannot be made based on the evidence.

Especially since the judge acknowledged that $40,000 worth of accounting services were in fact provided to the respondents and she charged them this amount, and the respondents acknowledged the merit of her conclusion in this respect. [ 24 ] Ultimately, the respondents have failed to show that Ms. Smirès’s fees correspond to the work the appellant failed to perform. It was not enough here to adduce, in bulk, without further explanation, the accountant Smirès’s invoices covering a variety of services rendered for them.

In the absence of evidence on a balance of probabilities that the appellant’s professional misconduct resulted in an injury, it is not up to the Court to substitute its own conclusion for that of the trial judge on this issue. FOR THE FOREGOING REASONS, THE COURT: [ 25 ] DISMISSES the principle appeal, with legal costs; [ 26 ] DISMISSES the incidental appeal, with legal costs. (signed) GENEVIÈVE MARCOTTE, J.A. (signed)

MARIE-JOSÉE HOGUE, J.A. (signed) PETER KALICHMAN, J.A. [ translation ] Employees concerned by this exclusion [in

section 54] therefore cannot claim an increase in salary for overtime under the ALS . They may, however, be entitled to it pursuant to their individual contract of employment or a collective agreement. It is worth noting, however, that unless the employee is not entitled to a minimum wage, he or she may require that all the hours worked be paid at the usual rate. If no hourly wage has been established, the number of hours worked should be multiplied by the minimum wage and the employee must receive at least that amount.