Executive Summary: Key Legal and Evidentiary Issues

• Central issue is whether the client’s decision to bypass the mortgage broker and deal directly with the lender constitutes a civil fault engaging contractual or extra-contractual liability.
• The plaintiff bore the burden under article 2803 C.c.Q. to prove that the defendant’s conduct directly caused the alleged financial loss and failed to discharge this burden.
• Evidence showed that the notary never received the required mortgage documents from the lender or its agent, breaking the causal chain between the defendant’s conduct and the failed brokered transaction.
• Contradictions emerged between the broker’s litigation position and his prior written communication blaming the notary, undermining the credibility and factual foundation of the claim.
• The court found no provision in the brokerage contract making the client liable for the broker’s remuneration, which is customarily paid by the lender upon execution of the hypothecary act.
• Responsibility for any delay or failure in the mortgage renewal process was attributed to other interveners (notary and/or lender), not to the defendant client.

Facts of the case

This case arises out of a dispute between a mortgage brokerage firm, A&H Signature Services financiers/Vision Hypothèque, and its client, Paula Alecu, regarding the renewal of a hypothecary loan and the broker’s claim for compensation when the transaction it had arranged did not close as expected. The matter was heard before the Cour du Québec, Civil Chamber, Small Claims Division, under file number 500-32-165177-249, and decided on 27 November 2025 by the Honourable Alain Breault, J.C.Q.

On 5 April 2023, a contract of mortgage brokerage was entered into between the brokerage firm and Ms. Alecu. Under this contract, the broker, through its sole employee, shareholder and director, Lyes Bettahar, undertook to find a new hypothecary loan for Ms. Alecu that would meet the criteria set out in the brokerage agreement. The intended outcome was a renewal or refinancing of her existing hypothecary loan with conditions advantageous in light of prevailing market rates.

In the ordinary course of such transactions, the broker’s fees and costs are paid by the lender, not by the borrower. The evidence in this case confirmed that the remuneration of the brokerage firm was to be borne by the lender once the hypothecary act was signed before a notary, which is treated as standard practice in that industry. Nothing in the written brokerage contract indicated that Ms. Alecu would, in any circumstances, be personally responsible for paying the broker’s compensation.

Despite this, the brokerage firm eventually sued its client before the Small Claims Division, claiming 1 604,76 $. It alleged that because the contemplated hypothecary renewal was not notarized through the broker’s process, it suffered professional and financial prejudice and a loss of time, and that this prejudice was attributable to the defendant’s conduct. The plaintiff’s theory was that Ms. Alecu improperly interrupted the process by refusing to follow through with the initial plan and instead dealing directly with the lender, thereby depriving the broker of its anticipated remuneration.

The events leading to the breakdown of the brokered transaction unfolded in June and July 2023. According to the evidence, a notary’s office contacted Ms. Alecu and requested that she attend on 27 June 2023 to sign the hypothecary act. When she arrived, she was met by a notary who explained she was replacing the initially designated notary and informed Ms. Alecu that a key document was missing: the hypothecary statement (relevé hypothécaire).

Faced with this obstacle, Ms. Alecu immediately telephoned Mr. Bettahar to ask that the missing document be forwarded to the notary. As the document could not be transmitted immediately, she left the office with the understanding that the broker would later ensure that the hypothecary statement was provided and that the transaction could then be finalized.

In the days that followed, having received no updates, Ms. Alecu contacted her bank directly to obtain the hypothecary statement herself. Once she secured it, she sent the document to the brokerage firm on or about 27 or 28 June 2023. Her expectation was that, with this missing piece supplied, the broker and the notarial office would quickly move to complete the renewal, particularly because her existing hypothecary contract was set to expire on 13 July 2023.

However, she received no further communication confirming a new signing date, the finalization of the renewal or any progress in the file. Shortly before the 13 July maturity date, she checked her hypothecary account and saw that she would be required to pay a higher amount than what she had previously been paying, even though no new hypothecary contract had yet been signed. This situation, coupled with the prolonged silence from the intermediaries, caused her to lose confidence in the brokerage firm’s handling of the matter.

On 12 July 2023, the day before the hypothecary term came to an end, Ms. Alecu sent an email to Mr. Bettahar stating that she was no longer in a position to wait and that she had decided to seek “another solution.” She then proceeded to contact her bank directly, which ultimately renewed her hypothecary loan at the same rate that had initially been negotiated through the broker. The intended economic result for her, in terms of interest rate, was thus preserved, but the renewal was completed outside the broker’s process.

Following these events, the brokerage firm sent a demand letter dated 15 September 2023. In it, the plaintiff alleged that, under the mortgage brokerage contract and the hypothecary commitments signed by Ms. Alecu, she had failed to follow through on her engagements to continue the process of the hypothecary transfer. The firm claimed that this interruption in the process caused professional and financial prejudice and wasted the time of all the intervenors who had worked to bring the transfer of the loan to a successful conclusion. It warned that if the attached invoice—representing the alleged damages of 1 604,76 $—was not paid, it would resort to legal action before the Small Claims Court.

The plaintiff then commenced the present action, essentially grounding its claim on the notion that the defendant’s decision to bypass the broker and deal directly with the lender was wrongful and constituted the direct cause of the broker’s alleged loss.

Legal principles and evidentiary burden

The decision turned heavily on the allocation and discharge of the burden of proof under article 2803 of the Civil Code of Québec, which states that a party seeking to assert a right must prove the facts that support its claim, while a party alleging that a right is null, modified or extinguished must prove the underlying facts of that allegation. The court also referred to established commentary on the evidentiary burden in civil matters, notably from Jean-Claude Royer, Catherine Piché and Léo Ducharme, emphasizing that if proof is insufficient or contradictory on an essential fact, the party who bears the burden of persuasion on that fact loses.

Applied to this case, the plaintiff, as claimant, had to demonstrate not only the existence of its alleged right to remuneration but also that the defendant’s actions were the factual and legal cause of the failure of the brokered transaction and the plaintiff’s consequent loss. It was not enough to show that some process had been initiated; the court required convincing proof that the defendant’s conduct, rather than the acts or omissions of others, was at the origin of the failure to close the transaction through the broker.

The legal framework also required the court to consider whether any contractual clause or established practice could impose liability on the defendant. The evidence on this point was clear: the brokerage contract did not stipulate that the client would be personally responsible for the broker’s fees, and industry practice was that the lender pays the broker when the hypothecary act is signed. Thus, any claim against the client for the broker’s professional compensation had to rest on proof of a separate civil fault causing damage, not on an express payment obligation in the contract.

Analysis of the causes of the failed transaction

After hearing the parties and assessing the evidence, the court concluded that the plaintiff had not met its evidentiary burden. The proof did not establish that Ms. Alecu’s actions were the direct or even indirect cause of the failure of the brokered renewal process. Instead, the judge found that the notary responsible for executing the renewal never received the documents required from the lender or from First National Financial (the entity that had designated the notary to act in the file). Without those documents, the notary could not complete the hypothecary act on the expected date.

This factual finding shifted the focus away from the defendant and onto other intervenors, particularly the notary and potentially the lender or its agent. The court noted that the notary called to testify, although working in the same office that had contacted Ms. Alecu, had no recollection of the defendant or her file and had located no documents or file opening record related to the mandate. That absence of documentation emphasized the lack of a clear, traceable notarial process leading to a scheduled and then aborted signing.

The court also examined the plaintiff’s own written communications. In a message dated 13 July 2023, Mr. Bettahar wrote to Ms. Alecu stating that the delay in the transaction was not caused by the lender MCAP or First National Financial, but rather by the original notary, who had not contacted her in time and had not properly explained the subrogation process and its implications. This communication, reproduced in the judgment, was inconsistent with the plaintiff’s litigation stance that Ms. Alecu’s decision to move ahead on her own was the problematic and causative act.

The judge considered this inconsistency significant. If, in real time, the broker blamed the notary for the delay and for failing to communicate properly with the client, it weakened the later position that the defendant’s conduct was the source of the prejudice. The court treated this contemporaneous acknowledgment as undermining the plaintiff’s attempt to shift responsibility onto Ms. Alecu in the lawsuit.

Absence of client fault and misdirected claim

The judge ultimately found that, in the circumstances, Ms. Alecu had acted reasonably. She responded to the notary’s request for a missing document by promptly involving the broker, then by obtaining the hypothecary statement herself and sending it to the brokerage firm. When, despite an imminent maturity date, she received no confirmation that the renewal would be finalized and saw that she was facing higher payments without any signed new contract, she was justified in concluding that she could no longer rely on the broker and in seeking another solution directly with her bank.

The court held that there was no civil fault in the defendant’s decision to contact her bank directly and complete the renewal with the same interest rate as initially negotiated. On the contrary, confronted with silence and an approaching deadline, she took prudent steps to protect her financial position. Any errors, omissions or delays that had impeded the timely conclusion of the transaction did not lie with her but rather with the notary and/or the payer of the broker’s fees.

In this context, the judge observed that if the brokerage firm believed it was entitled to a remuneration despite the failed transaction, it should have directed its claim against the party truly at fault or against the party that customarily pays its fees—the unidentified original notary who failed to act, or the institutional entities (the lender and its agent) that normally compensate the broker upon completion of the hypothecary act. The firm chose instead to pursue the client, notwithstanding the absence of any contractual clause making her liable for its remuneration and the lack of evidence that her conduct was wrongful or causative of any loss.

Consequently, the court characterized the action as factually and legally unfounded. The plaintiff’s allegations that the client had broken her commitments and caused professional and financial prejudice were not supported by credible evidence once all the factual context and the broker’s own prior statements were taken into account.

Outcome of the case

Having reviewed the evidence and the applicable legal principles, the court dismissed the brokerage firm’s claim in its entirety. The plaintiff failed to establish that the defendant had any contractual obligation to pay the broker’s remuneration, failed to prove a civil fault on her part and failed to demonstrate a causal link between her conduct and any alleged loss. The action was therefore rejected as ill-founded.

As for costs, the Court ordered that the plaintiff pay court costs in favour of the defendant in the amount of 115 $. A&H Signature Services financiers/Vision Hypothèque thus recovered nothing on its claim of 1 604,76 $, while the successful party, Ms. Paula Alecu, obtained an award of 115 $ in judicial costs in her favour as the total amount ordered by the court.