Executive Summary: Key Legal and Evidentiary Issues

• Dispute centered on the interpretation of a brokerage service agreement between the parties.

• Plaintiff claimed improper withholding of commissions, administrative fees, and a termination penalty.

• Key legal ambiguity involved the missing renewal clause (3.3), leading to conflicting interpretations of notice requirements.

• Tribunal confirmed the validity of a 30-day pre-renewal notice requirement based on consistent past agreements.

• Defendant overcharged administrative fees by miscounting transferred contracts, partially admitting the error.

• Plaintiff failed to prove breach of contractual obligations or improper services by the defendant.

Facts and background of the dispute

Daniel Richard Courtier Inc., led by Mr. Daniel Richard, filed a claim against 9303-3421 Québec Inc., operated by Ms. Chantal Roy under the Via Capitale Sélection franchise. Mr. Richard had been working as a real estate broker under successive service contracts with the defendant’s company since 2017. In 2022, after incorporating his business, a new brokerage agreement was signed on February 14, 2022, with retroactive effect to December 1, 2021.

The agreement contained several terms, including commission structures and termination clauses. As the contract neared its two-year end date on December 1, 2023, Mr. Richard considered continuing with the agency or purchasing it. After failed negotiations, he signed with another agency on November 16, 2023, with a transfer date of November 30. He informed Ms. Roy on November 17, less than 30 days before the contract's expiry.

Ms. Roy argued that Mr. Richard failed to respect a 30-day prior notice requirement and applied termination penalties of $5,000, administrative and service fees of $1,620, and a $150 fee per contract for 24 contracts, totaling $11,001.70, which she deducted from amounts otherwise payable to him. Mr. Richard contested these deductions, particularly the fees for administrative services he claimed were not provided, and claimed the number of transferred contracts was inflated.

Analysis of the agreement and legal interpretation

A central issue was the validity of the 30-day notice requirement. The written contract appeared to lack a complete clause (3.3) on renewal, resulting in ambiguity. However, the court found that the intention of the parties, based on past agreements and testimony, clearly included a 30-day notice clause. The court ruled that the agreement was substantively the same as earlier ones, which included the notice term, and that Mr. Richard knew or ought to have known of this.

The email Mr. Richard sent on November 1, 2023, expressing his interest in continuing under new terms, was not deemed a formal non-renewal notice. The actual termination notice came on November 17, well after the 30-day deadline. Consequently, the contract automatically renewed for another term, and Mr. Richard was found to have terminated it early. The court held that this triggered the agreed-upon termination fees.

Evaluation of fees and contractual performance

Mr. Richard also disputed the $150-per-contract administrative fee, arguing that the services associated with those fees—particularly client communications during the transition—were not performed. However, the court found that Mr. Richard himself voluntarily handled the client notifications and acknowledged this in correspondence. He had concerns about proper handling and chose to take charge of the process, effectively waiving the right to complain about it later.

Despite this, Ms. Roy admitted an error in calculating the number of affected contracts—billing for 24 instead of the actual 20. As a result, the court ordered the refund of $600 for the 4 excess contracts. Mr. Richard’s broader claims were otherwise dismissed due to insufficient proof of contractual breach or improper conduct by the defendant.

Outcome of the decision

The Court partially upheld Mr. Richard’s claim. It ordered 9303-3421 Québec Inc. to reimburse $600, representing overcharged administrative fees, along with legal interest and a $364 reimbursement for court filing fees. The remainder of Mr. Richard’s $11,001.70 claim was dismissed. The decision confirms the enforceability of implied contract terms based on past practice and emphasizes the burden of proof in alleging contractual breaches.