2016 QCCQ 1928, 2016 QCCQ 1928

Zoldan c. Deshmukh 2016 QCCQ 1928 COURT OF QUEBEC Small Claims Division CANADA PROVINCE OF QUEBEC DISTRICT OF MONTREAL Civil Division No: 500-32-145653-152 DATE: February 3, 2016 ______________________________________________________________________ PRESIDED BY THE HONOURABLE DAVID L. CAMERON, J.C.Q. ______________________________________________________________________ ANDRE ZOLDAN […] Montréal, Qc […] Plaintiff v.

NIKHIL DESHMUKH […] Verdun, Qc […] -et- MAN JULA JOHN […] Verdun, Qc […] Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] The Plaintiff, Andre Zoldan, sues the Defendant Nikhil Deshmukh on a Promissory Note dated October 24, 2008 in an initial amount of $ 5,000 (P-6).

He asserts in his testimony however that he advanced a total of $ 5,700. [ 2 ] He admits receipt of payments totalling $1,050 and adds a total of $ 15,744 of interest for a total of $ 20,395. [ 3 ] His claim, as originally stated, compounded less interest and amounted to only $10,360. [ 4 ] At the hearing, he amended his claim to the Court’s maximum which is $ 15,000. [ 5 ] Mr Zoldan also sues Mr Deshmukh’s mother, the co-Defendant Man Jula John, alleging that she entered into a suretyship agreement with him in January 2013 at which time she also made a partial payment of $ 100 toward the loan. [ 6 ] Both Defendants contest the claim on the basis that it is prescribed.

They do not admit that a payment was made in January 2013 and the last payment would have been made in 2009, therefore more than three years before the institution of the Demand on January 28, 2015. [ 7 ] They also deny that interest is owed on the debt, the only fee for the loan being $ 1,000 in virtue of the stipulated repayment of $ 6,000 in the form of twelve monthly payments of $ 500 each commencing February 1, 2009. [ 8 ] Mrs John denies having given an oral promise to guarantee the loan and she denies the alleged payment of $ 100. ISSUES

[ 9 ] The Court must decide: 1) Is the claim prescribed? 2) Can interest be claimed on the loan? 3) Is the Defendant Manjula John a surety for what is the outstanding balance in capital and interest. [ 10 ] The note itself states that “The lender has lent” to Nikhil Deshmukh an amount of $ 5,000 with a stipulated repayment of the sum of $ 6,000. [ 11 ] By computation, this constitutes a 20% premium but there is no expression in so many words that it is interest nor any mention of an annual interest rate expressed as a percentage. [ 12 ] In addition to the note itself, the Defendant Deshmukh acknowledged his indebtedness by making several partial payments which are detailed in several manuscript documents, which are the basis of the Plaintiff’s compilation of his exhibit P-4 entitled “Loan Calculation”.

It is a sort of a statement of account. [ 13 ] The payments stated on this document are the only ones admitted by Mr Deshmukh. They are indicated as being made on August 14, 2009. They amount to $ 950. The payments were in fact made on various dates, as can be seen from some manuscript documents submitted to the Court and one cheque (P-5).

This manuscript documentation would also tend to show there were in fact advances totalling $5,700 and there does not seem to be much serious debate on this point. [ 14 ] The real issue in the case is the defence of prescription which would obviously apply because the total debt expressed as $ 6,000 was due and could have given rise to a lawsuit for the whole amount of the note on January 2, 2010. [ 15 ] Exhibit P-5, a cheque dated August 14, 2009 indicates “first payment towards personal loan” and this date is also seen on the manuscript document.

No date is indicated for other payments totalling $ 6,050. [ 16 ] Even if a payment had been made on January 22, 2013 by Mrs John, which is not very plausible, this would not have the effect of reviving the claim, which had already been prescribed as of January 2, 2013, unless it could be shown that Mr Deshmukh agreed to the payment and agreed to renounce prescription. [ 17 ] It is extremely difficult for Mr Zoldan to make this proof.

Firstly, he is faced with the prohibition on testimony to establish a juridical act where the amount in issue in the case is more than $ 1,500. [ 18 ] He has nothing coming close to a commencement of proof because Mr Deshmukh simply denies having had any interaction with him after the payments in August 2009. [ 19 ] Mrs John denies having made the payment and relates to the Court that the conversation that she was having with Mr Zoldan in January 2013 had to do with other completely unrelated business matters and that when she wrote him “also would you like to hold on till June, you will not regret I assure you”, she was referring to her hope that Mr Zoldan would remain active with her in certain investment matters in which the two had been collaborating on (P-8). [ 20 ] When Mr Zoldan writes to her on January 13, 2013 (P-8) about his request that she undertake to guaranty the loan made back in October 2008, he actually states that she has refused to put her verbal commitment in writing.

He alleges that, in a meeting on January 10, 2013: “[…] you have repeatedly said that you were committed to pay the debt of your son NiKil Deshmukh, but that you are unwilling to formalize that commitment in writing. You stated that your verbal promise should be sufficient […]”. [ 21 ] These allegations are not sufficient to establish a commencement of proof, because they do not emanate from Mrs John.

They are actually self-serving statements made by Mr Zoldan. [ 22 ] The fact that she did not respond to them doesn’t establish their truth. [ 23 ] Therefore, in the absence of any admissible evidence, the payment is not proved and there is nothing in the file that can establish an interruption of prescription that was acquired through the passage of more than three years from the last partial payment until the date when the Demand was instituted. [ 24 ] This is sufficient to dispose of the matter and it is not necessary for the Court to deliberate further on the question of the exact amount of the loan, nor on the question of interest. [ 25 ] The parties may, however, be interested in knowing that the Court would have found that there was no agreement as to interest in the Promissory Note.

A written agreement as to interest must clearly state that interest is payable. Any rate in excess to the legal rate of 5% per year must be expressed as an annual rate. [ 26 ] It is not up to the debtor to derive a percentage by calculating the mathematical impact of a fee or a modality of payment that provides for payment back of a sum greater than the sum borrowed. The Interest Act (R.S.C. 1985, c.

I-15) is very clear on this point and, short of a judicial admission or some other form of proof of an agreement on the part of the Defendant for an annual interest rate, the claim for interest simply can not be maintained. FOR THESE REASONS, THE COURT: DISMISSES the Plaintiff action;

CONDEMNS the Plaintiff to pay the Defendants’ costs for the judicial stamp in the amount of $ 190. __________________________________ DAVID L. CAMERON, J.C.Q. Date of hearing: January 26, 2016