Moral damages for troubles and inconveniences granted to a legal person

SUBJECT

Moral damages for troubles and inconveniences granted to a legal person in the context of a landlord-tenant relationship.

INTRODUCTION

It is not uncommon for courts to grant moral damages to a legal person for defamation.

However, courts do not grant damages to a legal person to compensate for the troubles and inconvenience, except to compensate for the supplementary remuneration paid to its employees  in the course of litigation (see Services de taxi Nord-Est (1978) inc. (Taxis Moderne) c. Dor, 2009 QCCQ 1040 (CanLII), paragraph 29).

But what if the actions of the offending party are sufficiently serious?

In 9004-2243 Québec inc. c. Centre sportif St-Eustache inc. et Jean-Guy Mathers, the Honourable Robert Mongeon condemns Defendants to pay Plaintiff, a legal person, moral damages in the amount of $35 000,00 for troubles and inconveniences.

I– FACTS

In 1994, Plaintiff, 9004-2243 Québec Inc., owned by the Farsa brothers, rented premises in the Centre Sportif St-Eustache Inc., for the operation of the restaurant “Casa Farsa”. At that time, the Centre Sportif St-Eustache Inc. was owned by two shareholders, Mr. Guy Bélisle and Mr. Sylvain Descoteaux. The rented premises were located in a prime location at the front of the building.

The term was five years, with two renewal options for additional five-year periods, until April 30th, 2009.

In 1998, Centre Sportif St-Eustache Inc. became the property of Groupe Mathers, whose majority shareholder is Defendant Mr. Jean-Guy Mathers.

Once the Centre Sportif St-Eustache Inc. became the property of Groupe Mathers, the relationship between Plaintiff and Defendants deteriorated, due to illicit means used by Mr. Jean-Guy Mathers and his employees towards the Farsa brothers, more precisely:

  • threats and intimidation;
  • arson which suggest that it was orchestrated by Mr. Jean-Guy Mathers and his employees;
  • multiple acts aimed at harming or preventing the operation of the restaurant; and
  • numerous lawsuits filed by Defendants against Plaintiff and the Farsa brothers between 1999 and 2004 in order to exhaust the latter financially and thus put an end to the commercial activities of Plaintiff.

In fact, Centre Sportif St-Eustache Inc. and its chief executive, Mr. Jean-Guy Mathers, had the unofficial target of taking control of the premises rented by Plaintiff to install their own restaurant.

II– ALLEGED DAMAGES BY PLAINTIFF

For all of Defendants’ actions, Plaintiff allegedly suffered the following damages:

DAMAGESAMOUNT
Loss of goodwill$100,000.00
Loss of profits$181,578.00
Leasehold improvements$136,106.53
Troubles, inconvenience and loss of enjoyment$100,000.00
Professional fees$166,000.00
Punitive damages$250,000.00
TOTAL$933,684.53

III–TROUBLES, INCONVENIENCE AND LOSS OF ENJOYMENT

From the outset, the Honourable Robert Mongeon says that it is necessary to distinguish the troubles and inconveniences suffered by Plaintiff from those suffered by its representatives, the Farsa brothers, because they are not parties to the claim in court despite that they were also the victims of the illicit means used by Defendants.

Also, the Honourable Robert Mongeon argues that although courts are generally unwilling to compensate legal persons for vague moral damages such as “troubles and inconveniences”, a legal person can still be compensated.

In this particular case, Defendants have filed numerous lawsuits against Plaintiff, thus exhausting it financially and imposing it constant pressure to be sued.

In addition, Plaintiff suffered the illegal, criminal and deliberate acts of Defendants, thus losing its restaurant, its income and its ability to pay the salaries of its shareholders. As the Honourable Robert Mongeon says, Plaintiff was totally deprived of its ‘’raison d’être’’.

All in all, Plaintiff was deprived of its rights under the lease and could not enjoy the rented premises peacefully.

According to the Honourable Robert Mongeon, the harm suffered by Plaintiff goes beyond the compensation Plaintiff will receive in respect of its loss of profits, loss of movable property and leasehold improvements and the reimbursement of professional fees.

In the end, the Honourable Robert Mongeon grant Plaintiff moral damages in the amount of $35,000.00 for the troubles and inconveniences, in addition to the other damages.

IV– AUTHOR’S COMMENT

Troubles and inconveniences are by definition the constant pressure to be taken to court, stress, insomnia, etc.

These troubles and inconveniences are emotions and difficulties that are felt by real human beings, not by fictitious entities such as legal persons.

It is not the legal persons who suffer from troubles and inconveniences, but rather their representatives.

Therefore, we do not see how legal persons can be compensated for troubles and inconveniences that they have not really suffered.

We believe that the representatives of the legal persons must be parties to the legal proceedings if damages are to be granted for troubles and inconveniences.

Let’s see what the Quebec Court of Appeal will say about this decision, since it has been appealed.