2013 QCCQ 3801, 2013 QCCQ 3801

Landmark Financial Group Inc. c. Fitzsimons 2013 QCCQ 3801 JG2338 COURT OF QUEBEC « Small Claims Division» CANADA PROVINCE OF QUEBEC DISTRICT OF BEAUHARNOIS LOCALITY OF VAUDREUIL-DORION « Civil Division » N° : 760-32-014948-121 DATE : March 25, 2013 ______________________________________________________________________ IN THE PRESENCE OF : THE HONOURABLE CÉLINE GERVAIS, J.C.Q ______________________________________________________________________ LANDMARK FINANCIAL GROUP INC. Plaintiff c.

CAROLYN FITZSIMONS FRANK BRENDEL Defendants ______________________________________________________________________ JUDGMENT ______________________________________________________________________ [ 1 ] Landmark Financial Group inc. (Landmark) claims from Carolyn Fitzsimons and Frank Brendel an amount of 2 089,01 $, representing the penalty provided for in an exclusive mandate to obtain an hypothecary loan. THE FACTS : [ 2 ] Mrs. Fitzsimons and Mr. Brendel were on the way to buy their first house, and needed a loan. Mr. Brendel had dealt previously with Mr. Sean Chouram at the National Bank.

A meeting was organized with Mr. Chouram and Raef Tatari, a young broker on October 22, 2011. [ 3 ] A document bearing the title " Exclusive Mandate " is signed on October 25, 2011, as well as an Hypothecary Loan Commitment with First National. This document provides details about an hypothecary loan in the amount of $212 800, at a rate of 3,39%. A cheque specimen is given by Mrs. Fitzsimons, and a Pre-authorized debit plan agreement is also signed. [ 4 ] On October 25, 2011, she also sends by email some documents (letters of employment, pay slips, Notice of Assessment, RRSP and bank statements).

One missing document is sent by email on October 27, 2011, also by Mrs. Fitzsimons. [ 5 ] An email is sent to her on October 28, 2011 at 17:07 by Ryan, from Landmark, saying: " I have sent two emails to your Hotmail as well as Frank's. Please check them as I have sent you the final approval!. Again, congratulations and we will keep in touch next week ." This final approval seems to be Exhibit P-2, a memo from First National to Landmark indicating that " the above hypothecary loan is scheduled to close on Monday, December 12, 2011, please be advised that all underwriting conditions have been met.

" [ 6 ] In her testimony, Mrs. Fitzsimons does not recognize having received this document. Mr. Chouram prentends at the hearing it was sent to the real estate broker, but has no proof of it. [ 7 ] As Mrs. Fitzsimons did not receive any further document from First National, she did not thought she was bound with them, and found a better mortgage deal with Bank of Montreal. [ 8 ] Mr. Brendel and Mrs. Fitzsimons signed the deed of sale for their new home on December 13, 2011. The mortgage was signed with the Bank of Montreal on December 9, 2011. [ 9 ] Mr. Brendel and Mrs.

Fitzsimons' notary testified at the hearing and said she received a phone call from Mr. Chouram the day

before the deed of sale. He asked her to hold the funds for Landmark's commission, which she refused to do. [ 10 ] On December 13, 2011, a letter is sent to Mr. Brendel and Mrs. Fitzsimons by Landmark (signed by Hicham Chouram) stating that " it is unfortunate that we could not provide you with the service you required. Please bear in mind, however, that your financial needs are always our priority. If ever you need our help or advice, we are but a phone call away [1] . " [ 11 ] Eight days later, a letter of demand is sent to Mrs. Fitzsimons and Mr. Brendel on December 21, 2011 with an invoice, by bailiff.

Landmark claims its brokerage fee, representing 0.75% of the loan, plus taxes, for a total amount of $1 871.87. In their Demand, they also claim $217 for bailiff fees.

ANALYSIS AND DECISION : [ 12 ] Landmark's Demand is based on the following clause, in the exclusive mandate: It is understood and agreed that in the event where the Loan requested by the Mandator in accordance wth the present Mandate is obtained and is subsequently refused, ignored or revoked by the Mandator, the latter shall pay to the Mandatory, as liquidated damages, the Brokerage Fees in addition to an amount equivalent to .75% of the total amount of the approved Loan if it is the case. [ 13 ] Mr. Brendel and Mrs. Fitzsimons deny owing any money to Landmark.

They plead that the documents they signed were not explained to them, and that they were led to believe no fees would be charged. They say the documents are misleading, and that the OAIQ's number of the broker, Raef Tatari, does not appear on the contract, which renders it null and void. [ 14 ] They refer to the fact that the contract indicates: Brokerage Fees: 0.0 .

As no formal documents were received from First National and they did not heard from Landmark until the month of December, they were comforted in their idea that they did no go further than the pre-approval step with First National. [ 15 ] According to Mrs. Fitzsimons, the mandate was not signed at Landmark's office and no signed copy was returned to them. [ 16 ] The Regulation respecting forms and contract that was in force at the time the mandate was signed provides, at

section 6, that a licence holder must, before having a contract, a transaction proposal or a form that he or she has completed signed, allow the parties to take cognizance of its terms and conditions and, before the signing, provide all the explanations and answers to questions that the parties may ask . [2] [ 17 ] Mrs. Fitzsimons and Mr. Brendel swear in their testimony that no explanations were provided to them before they signed the document regarding the penalty clause. Mr.

Chouram, as he signs over 300 contracts per year, could not remember exactly what was said. [ 18 ] It should be noted that, according to Exhibit D-4, Mrs. Fitzsimons and Mr. Brendel had already signed on October 21, 2011, a mandate with Multi-Prêts hypothèques. Had they been aware of the penalty they were facing if they did not signed the hypothecary loan found by Landmark, it is almost certain that they would have reacted to that news. They would have divulged their business relation with Multi-Prêt or revise their decision to sign with Landmark with such a condition in the contract. [ 19 ] Should Mrz.

Fitzsimons and Mr. Brendel have noted the penalty clause in the exclusive mandate ? The copies filed in the Court file show a document with small prints [3] . After the information regarding both parties and the details about the requested mortgage loan, a first paragraph is entitled "Description of the mandate". This paragraph has 24 lines, and the penalty clause is in the middle of it. In the first half, one sentence is printed in capital letters, and bold caracters.

It is the clause regarding the instructions that the mandator is giving to the acting notary to withold from the proceed of the loan Landmark's commission, and to pay it directly to them. [ 20 ] It is not surprising that Mrs. Fitzsimons and Mr. Brendel did not realize they were signing a document with a penalty clause, if no explanation were given to them and if their attention was not brought to the particular wording of it. The consequence of this lack of information is that Mrs. Fitzsimons and Mr. Brendel could not give an informed consent to the contract.

In fact, there was simply no agreement between the parties as relates to the penalty clause. FOR THE ABOVEMENTIONED REASONS, THE COURT : DISMISSES Plaintiff's action; WITHOUT costs . __________________________________ CÉLINE GERVAIS, J.C.Q.