2020 QCCQ 7725, 2020 QCCQ 7725

Scrimshire c. McCarthy 2020 QCCQ 7725 COUR DU QUÉBEC « Division des petites créances » CANADA PROVINCE DE QUÉBEC DISTRICT DE LONGUEUIL « Chambre civile » N° : 505-22-028509-190 DATE : 27 novembre 2020 ______________________________________________________________________ SOUS LA PRÉSIDENCE DE L’HONORABLE DANIEL LÉVESQUE, J.C.Q. ______________________________________________________________________ RENATE SCRIMSHIRE

Partie demanderesse c. CAROLYN McCARTHY

Partie défenderesse ______________________________________________________________________ JUGEMENT ______________________________________________________________________ [ 1 ] In the absence of defendant and on the basis of the proof and arguments presented by plaintiff the court must decide whether the amount claimed by her as reimbursement of a loan if owing and determine if as a result of defendant alledged insolvency she should be deprived of the benefit of the term initially agreed by the parties. [ 2 ] Defendant is absent at the time of the trial.

The reason for defense stated in the protocol of the parties does not raise any clearly identified issue and is limited to a general statement claiming that plaintiff procedure is abusive. [ 3 ] On October 5th, 2016, Plaintiff and Defendant entered into a loan agreement pursuant to which Plaintiff granted to Defendant a loan in the amount of $20,000, bearing interest at a rate of 4% per annum, repayable no later than October 5 th , 2028. [ 4 ] Under the loan agreement, Exhibit P-1, Defendant undertook to make payments as follows:

a) from October 1st, 2017 to September 30th, 2021, an amount of $800.00 per year representing the interest only due per annum;

b) from October 1st, 2021 to October 5th, 2028, an amount of $273.38 per month. [ 5 ] Plaintiff states in her testimony that she has received the interest payment in due time for the first year of the contract and then only an amount of 100,00$ for the year 2018, and that no further payement were received. Plaintiff acknowledges that defendant forwarded partial eletronic payment forming an amount of 400$ were proferred but declined plaintiff requesting full payment of the amount 800$ owing at the time. [ 6 ] She states that according to the payments

schedule provided for in the contract in additionn to the of capital of 20 000$ an amount of 700$ for the year ending octobre 1st 2018, as well as two annual payment of interest for the tw years ending in octobre 2019 and 2020 ar owing for a total of 22 300$ [ 7 ] In text messages in October 2018, the Defendant indicates her inability or refusal to honor payement then owing and indicates: “You will be paid when I can pay you » [ 8 ] She further states on January 18th, 2019, « I don't have that money, and you're going to have to get in line behind a long list of creditors to ever see a red cent » and that she is in her words «in dire financial straits ». [ 9 ] Plaintiff contends that the court should see and declare that, under

section 1514 of Code civil du Québec , that defendant must be deprived of the benefit of the term as she has become insolvent since the term had been granted to her. [ 10 ] The reason for such a remedy are described as follows: « Lorsque le débiteur devient insolvable, il est à craindre que le créancier ne soit jamais payé s'il est obligé d'attendre l'arrivée du terme pour réclamer son dû. C'est pourquoi le Code prévoit la déchéance du terme lorsque le créancier fait la preuve que le débiteur est insolvable (art. 1514 , al. 1 C.c.Q.)47, ce qui se définit comme étant l'état de celui qui ne peut payer ce qu'il doit [1] »

« […] Si un terme est accordé au débiteur par le contrat, c'est bien parce que le créancier a confiance qu'à l'échéance, la dette sera acquittée. Que cette confiance vienne à disparaître, on peut comprendre que le terme ne se justifie plus et qu'il puisse prendre fin prématurément. Tel sera le cas si, par son comportement ou sa situation financière devenue précaire, le débiteur met en péril le recouvrement éventuel de la créance.

Sans constituer une sanction à proprement parler, la déchéance du bénéfice du terme ouvre la voie aux recours du créancier insatisfait, bien qu'elle n'équivaille pas nécessairement à une demeure. […] Comme son échéance normale, en principe, la déchéance du terme « emporte [...] exigibilité immédiate de la créance [2] » [ 11 ] In communication with plaintiff Defendant recognizes her inability to pay not only the obligation arising from the loan but also generally the amounts owing to a substantial list of creditors. [ 12 ] Her insolvency also appears from various measures undertaken by some of her creditor againts her property and ultimately from the loss of her residence as a result of execution of a mortgage.

This result follows from a series of events that may be summarized as follows

a) a prior notice of sale for non-payment of property taxes, registered by the City of Brossard on May 8, 2019 under number 24 574 817.

b) a prior notice of exercise of a hypothecary recourse, registered by the Royal Bank of Canada on June 3, 2019 under number 24 641 101.

c) a notice of legal hypothec of a syndicate of co-owners, registered by the Syndicat des copropriétaires 7140-7150 de Lanivet on September 23, 2019 under number 24 913 403.

d) a notice of sale under judicial authority, registered by the Royal Bank of Canada on June 11, 2020 under number 25 449 023.

e) a notice of legal hypothec resulting from a judgment, registered by the Royal Bank of Canada on July 3, 2020 under number 25 510 915

f) The sale « sous contrôle de justice » of defendant property on July 10th 2020 as indicated in the registre as of July 10th 2020.

g) The issuance by this court of a judgement condemning defendant to pay an amount of 16 631,09$ in capital to Royal Bank of Canada. [ 13 ] These event form a consistent, substantial and precise presumption of defendant insolvency that has not been susbtantially contested nor otherwise explained. [ 14 ] This justifies that defendant be deprived from the benefit of the term and that she be condemned to pay the capital owing and the periodic interest payement agreed and unpaid. For these reasons [ 15 ] Condemns defendant to pay to plaintiff an amount of 22 300$ plus interest from October 2nd 2020 and the rate of 4% per annum as well as legal cost as undestood in

section 339 of the Code de procédure civile. __________________________________ DANIEL LÉVESQUE, J.C.Q.