2014 QCCQ 12294, 2014 QCCQ 12294

Bourgault c. Heafey 2014 QCCQ 12294 COURT OF QUÉBEC Small Claims CANADA PROVINCE OF QUÉBEC DISTRICT OF GATINEAU LOCALITY OF GATINEAU Civil Division No. 550-32-021261-133 DATE: December 19, 2014 ______________________________________________________________________ PRESENT: THE HONOURABLE JEAN FAULLEM J.C.Q. ______________________________________________________________________ NORMAN BOURGAULT Plaintiff v.

RUTH HEAFEY Defendant ______________________________________________________________________ JUDGMENT JF 1075 ______________________________________________________________________ [ 1 ] Norman Bourgault is claiming $7000 in damages from Mtre. Ruth Heafey, notary, as a result of false representations and professional errors that Mtre. Heafey is alleged to have made in preparing two mortgage deeds. I- ISSUE [ 2 ] Did Mr. Bourgault prove that Mtre. Heafey failed in her professional obligations, thereby causing him damages?

II- CONTEXT [ 3 ] On July 19, 2012, my colleague Gatien Fournier J.C.Q. rendered a single decision in two cases bearing numbers 550-22- 012201-107 and 550-22-012203-103, allowing in part Mr. Bourgault’s claims against real estate broker Marcel Lamoureux and the Fonds d'assurance responsabilité professionnelle of the Association des courtiers et agents immobiliers du Québec (FARCIQ). [ 4 ] In those two cases, Mr. Bourgault mainly criticized Mr.

Lamoureux for having made erroneous and misleading representations to him in the framework of the mandate that led to the extending of a $30 000 loan to Louise MacMaster and her son Richard Knapp. That was the same $30 000 loan as alleged in the present case. The loan was guaranteed by two junior real estate mortgages prepared and published by Mtre. Heafey. [ 5 ] Following the death of Ms. MacMaster, Mr. Knapp, both personally and as his mother’s heir, stopped repaying Mr. Bourgault’s loan and the loan of another creditor holding a senior mortgage on the same immovables.

It appears that the senior creditor, Nathalie Heafey, exercised the mortgage recourse allowed her by law. For his part, Mr. Bourgault was not able to recover the $30 000 debt owed him. Note that Mr. Bourgault did not try, in no way, to exercise his own mortgage recourse. [ 6 ] Fournier J. wholly dismissed Mr.

Bourgault’s claim related to the $30 000 loan, although he granted him some damages for a second loan, which is not involved in the case at bar. [ 7 ] The facts that led to the extending of the $30 000 loan are very clearly summarized by Fournier J., particularly in paragraphs 15 to 46 and 52 to 66 of his judgment, to which the Court refers to serve as if they were cited in full. [ 8 ] Mr. Bourgault decided not to appeal the Fournier J.’s judgment. Rather, he decided to institute this legal proceeding in order to claim from Mtre.

Heafey the damages to which he is allegedly entitled further to the taking possession, by the first mortgage creditor, of the mortgaged immovables, more particularly the immovable located at […]. [ 9 ] In a separate fourth case, bearing number 550-32-021201-139, Mr. Bourgault also instituted a legal proceeding before the Small Claims Division of the Court of Québec, against the company Multi-Prêts, for faults it allegedly committed in his regard in the

same circumstances as those raised in the case at bar, as well as in the two cases heard by Fournier J. More specifically, in the Multi- Prêts case, Mr. Bourgault alleged that Multi-Prêts was liable toward him for the acts of its representative Marcel Lamoureux, who was the defendant in the cases heard by Fournier J. I have dismissed this claim on December 1 st , 2014. III- CONTENTIONS OF THE PARTIES [ 10 ] In the case at bar, Mr.

Bourgault alleged, in support of his claim, that notary Heafey did not act independently or in accordance with the ethical rules of the profession of notary, particularly for the following reasons: [ 11 ] Firstly, Mtre. Heafey allegedly failed to inform him that the actual value of the immovable located at […] was not $64 000, but $35 000. [ 12 ] Secondly, further to the death of Louise MacMaster, Mtre. Heafey allegedly represented to him that Mr. Knapp was only his mother’s heir.

She allegedly failed to advise him that Richard Knapp was also co-owner of the immovable located at […], which, in his opinion, constituted a failure pursuant to the $30 000 loan deed. [ 13 ] Thirdly, Mtre. Heafey allegedly hid from him her family ties with Nathalie Heafey, who held the senior mortgage on the immovables involved in the present case. [ 14 ] Fourthly, Mtre. Heafey allegedly recommended strongly that he acquire the rights of the senior mortgage creditor, i.e. her niece Nathalie Heafey, for the sole purpose of benefitting her niece. [ 15 ] Mtre. Heafey vigorously contested all Mr.

Bourgault’s claims and, in a cross demand, she claimed from him $7000 in damages for abuse of right and abuse of process. IV- ANALYSIS AND CONCLUSIONS OF THE PRINCIPAL CLAIM [ 16 ] The two deeds prepared and published by Mtre. Heafey under numbers 14043051 and 14043052 are notarial deeds establishing the $30 000 junior mortgage loan extended to Ms. MacMaster and Mr. Knapp by Mr. Bourgault. A.

Value of the immovable located at […] [ 17 ] As a preliminary, the Court cites below paragraphs 89, 90 and 91 of Fournier J.’s judgment: [TRANSLATION] [89] Bourgault contended in regard to Loan #2 that Lamoureux did not inform him that the assessment of Immovable #1 in the amount of $64 000 was conditional on renovation work being done.

The assessment report was in French, he said he does not understand French and he added that Lamoureux did not properly translate for him what he transmitted to him. [90] At that point, Bourgault had a fair amount of experience in the area of private loans guaranteed by real estate mortgages. In fact, this was not the parties’ first business relationship in that regard. Bourgault had already granted a number of loans through the intermediary of Lamoureux , regarding which he had sustained no losses. Lamoureux was aware that Bourgault did not understand French and he testified that they communicated in English.

In fact, a January 21, 2008 email was filed in which Bourgault asked Lamoureux to translate a text written in French. [91] The Court does not subscribe to Bourgault ’s theory. Rather, the Court is of the opinion that Lamoureux knew full well that Immovable #1 required renovations and that its value before the renovations was not $64 000, but rather $43 000. For Bourgault to agree to grant a loan of $30 000 to the debtor, he required that she give him an additional guarantee, in the form of Immovable #2 .

Bourgault therefore knew that, before the renovations, Immovable #1 did not have sufficient value to guarantee a first mortgage in the amount of $20 000 and his loan in the amount of $30 000, guaranteed by a junior mortgage. [ 18 ] For the reasons given earlier in my preliminary decision of June 11, 2014 rendered in file 550-32-021201-139, I cannot proceed with another analysis of the case that was conducted by Fournier J. What is more, in light of the evidence adduced in this case, I am in agreement with the conclusion of Fournier J. stated in paragraph 91 of his judgment. [ 19 ] Therefore, Mr.

Bourgault cannot criticize Mtre. Heafey for misleading him about the market value of […]. [ 20 ] In fact, the evidence showed that Mtre. Heafey did not have exhibits P-3 (Mortgage

Summary) or P-4 (Mortgage Application) in her possession when she prepared the mortgage deeds. [ 21 ] Moreover, even if she had had exhibits P-3 and P-4, it was not up to the notary to assess the financial risk associated with the loan extended by Mr. Bourgault to Ms. MacMaster and her son. [ 22 ] Fournier J.’s judgment shows that Mr. Bourgault relied on the representations of broker Lamoureux to assess his financial risk and did not take the trouble to have the said immovables assessed himself. [ 23 ] Mtre. Heafey had no legal obligation toward Mr.

Bourgault in terms of the market value of the said immovables. [ 24 ] What is more, the purchase price of that immovable is information that Mr. Bourgault could demand from the person to whom he was preparing to lend $30 000, namely, Ms. MacMaster. B. Status of Richard Knapp

[ 25 ] As regards to the role played by Mr. Knapp in the case, the mortgage loan deeds prepared by Mtre. Heafey, which Mr. Bourgault signed, indicated clearly that Mr. Knapp was an integral part of the transaction as co-debtor of his mother’s obligations, as well as co-owner of […]. [ 26 ] The two mortgage loan deeds prepared by Mtre. Heafey were written in English and they were read to Mr. Bourgault before he signed them. It is therefore unlikely that Mr. Bourgault did not realize that Mr. Knapp was his debtor and that he was co-owner of […]. C.

Having acted for Nathalie Heafey [ 27 ] The 2007 deed of sale, Exhibit P-7, between, on the one hand, Louise MacMaster and Richard Knapp, and on the other, Nathalie Heafey, entered into in 2007, and the index of immovables, Exhibit P-32, show that Nathalie Heafey held a senior mortgage on the property located at […]. [ 28 ] Mr. Bourgault was aware of the existence of that mortgage when he agreed to lend the sum of $30 000. [ 29 ] Mr. Bourgault alleged that Mtre. Heafey hid from him her family ties with Nathalie Heafey. [ 30 ] Mtre.

Heafey said she never hid her family ties with her niece. [ 31 ] Even if those family ties were never disclosed to Mr. Bourgault, the latter had to prouve, preponderantly, in accordance with articles 2803 and 2804 of the Civil Code of Québec (C.C.Q.), that this omission caused him harm. [ 32 ] Where the problem lies, according to Mr. Bourgault, is that, on August 5, 2011, Nathalie Heafey assigned, for $1 and other considerations, all her rights to the immovable located at […] to notary Heafey. A little later, on August 18, 2011, Mtre.

Heafey sold the property for $30 000. [ 33 ] Nothing demonstrates that the assignment of rights in 2011 between Mtre. Heafey and her niece caused Mr. Bourgault any harm. By that time, Nathalie Heafey had already regained ownership of the property through taking in payment. Note that Nathalie Heafey became the owner of that immovable on June 23, 2010, when she published the judgment of forced surrender and taking in payment that she obtained after legally exercising her mortgage recourse, with Mr. Bourgault’s knowledge. [ 34 ] Mr.

Bourgault’s loss is therefore the result of his decision not to exercise his own mortgage recourse before Nathalie Heafey took possession of the property. [ 35 ] Mtre. Pierre Leduc, who represented Mr. Bourgault at the time that Nathalie Heafey exercised her mortgage recourse, confirmed that Mr. Bourgault was advised of the existence of a 60-day notice served by Nathalie Heafey. [ 36 ] For his own reasons, which were, however, beyond Mtre. Heafey’s control, Mr. Bourgault waived exercising his own mortgage recourse. [ 37 ] Hence, when Mtre. Heafey became the owner of the immovable in 2011, Mr.

Bourgault no longer had any right or interest in it. [ 38 ] Accordingly, Bourgault was unable to demonstrate that the family ties between Nathalie Heafey and Mtre. Heafey caused him harm. [ 39 ] Moreover, note that

section 41 of the Notarial Act [1] stipulates the following: No notary may execute

an act if the notary or the notary's spouse is or represents one of the parties to the act. [ 40 ] Therefore, simply registering her niece’s mortgage is not illegal in and of itself, and does not constitute a derogatory act on Mtre. Heafey’s part. D. Taking charge of the senior mortgage [ 41 ] The emails exchanged between Mr. Bourgault and Mtre. Heafey about the issue of taking charge of Nathalie Heafey’s senior mortgage by Mr. Bourgault testify only to a transmission of information of a legal nature to Mr. Bourgault by Mtre. Heafey. Mtre. Heafey simply informed him of his rights as a mortgage creditor.

That information was, in fact, consistent with the law and of the same nature as the information he received from his own attorney, Mtre. Pierre Leduc. [ 42 ] Once again, Mtre. Heafey in no way infringed an ethical rule in regard to Mr. Bourgault when she simply reminded him of his rights as a mortgage creditor holding a junior guarantee on the immovables involved. E. Prescription of Mr. Bourgault’s recourse [ 43 ] Lastly, the record and Mr.

Bougault’s own testimony showed that he had been in possession of all information dealing with the elements constituting his recourse since at least the time of the exchange of emails with Mtre. Heafey in October 2009. [ 44 ] Mr. Bourgault’s testimony also confirmed that, as of that period, he took cognizance of the whole cause of action in regard to notary Heafey. [ 45 ]

Article 2925 of the Civil Code of Québec stipulates that an action to enforce a personal right is prescribed by three years [ 46 ] The present recourse was instituted by Mr. Bourgault on July 22, 2013, more than three years after the start of the calculation of the prescriptive period.

[ 47 ] Therefore, Mr. Bourgault’s recourse against Mtre. Heafey was prescribed at the time it was instituted. V. MTRE. HEAFEY’S CROSS DEMAND [ 48 ] As mentioned at the beginning of this judgment, before he sued Mtre. Heafey, Mr. Bourgault had instituted two other legal recourses in order to obtain damages for the loss he sustained in relation to the $30 000 loan extended to Ms. MacMaster. [ 49 ] Dissatisfied with the judgment rendered by Fournier J., Mr.

Bourgault decided to institute two other legal recourses instead of appealing from that judgment, in order to obtain damages in respect of which he was unable to establish his rights before the trial judge. [ 50 ] But, as Fournier J. concluded, and I share his opinion, the impossibility for Mr. Bourgault to recover all or at least part of the principal of the $30 000 loan stems directly from his decision not to exercise his mortgage recourse. Thus, Mr. Bourgault is the architect of his own loss. Furthermore, for all the other reasons mentioned in this judgment, Mr.

Bourgault is unable to prove any fault whatsoever by notary Heafey in his regard. [ 51 ] In these circumstances, Mr. Bourgault’s conduct testifies to foolhardiness that approaches quarrelsome conduct, which is tantamount to abuse of right. [ 52 ] The many legal recourses instituted against the various parties mentioned earlier, in order to recover his $30 000 loan, whereas the primary solution depended on the exercise of his own mortgage recourse, constitutes an abuse of right and abuse of process for which Mr. Bourgault must be held liable toward Mtre. Heafey in this case. [ 53 ] However, Mtre.

Heafey did not establish preponderantly that the abuse of right by Mr. Bourgault harmed her reputation. [ 54 ] But there is no doubt that the present proceeding caused Mtre. Heafey trouble and inconvenience, for which she is entitled to obtain damages.

The Court assesses at $500 the value of the moral damage sustained. [ 55 ] THEREFORE, THE COURT: [ 56 ] DISMISSES the legal claim of Norman Bourgault against Ruth Heafey; [ 57 ] ORDERS Norman Bourgault to pay Ruth Heafey the court costs of the contestation, set at $156; [ 58 ] ALLOWS Ruth Heafey’s cross demand in part; [ 59 ] ORDERS Norman Bourgault to pay Ruth Heafey $500 in damages for abuse of right, with interest at the legal rate, plus the additional indemnity provided for in

article 1619 of the Civil Code of Québec , as of the date of this judgment, with che court costs set at $81. __________________________________ JEAN FAULLEM J.C.Q. Date of hearing: June 16, 2014