Executive Summary: Key Legal and Evidentiary Issues

• Commercial landlord–tenant dispute over end-of-lease obligations for rent, electricity (Hydro) and school taxes, including whether Subway remained liable once the lease expired and the premises were returned.
• Failure by Québec inc. to provide reliable, probative accounting records and allocation of Hydro, rent and tax charges under the lease, leading to dismissal of its monetary claim for lack of proof.
• Procedural irregularities involving a forced intervention and reconventional claims, with Subway’s reconventional proceeding against Anjana Patel rejected outright for procedural defects.
• Patel’s claim for loss of enjoyment due to water leaks found barred because no timely denunciation or prior mise en demeure was sent to Québec inc., as required by arts. 1590 and 1595 C.c.Q.
• Harassment and discriminatory treatment by Québec inc.’s representatives toward Patel, including racist remarks and an incident involving hot coffee, established as civil faults under arts. 6, 7, 10, 1375 and 1457 C.c.Q. and art. 10 of the Quebec Charter.
• Overall allocation of responsibility resulting in Subway successfully resisting Québec inc.’s claim, while Patel partially succeeds against Québec inc. and obtains an award of 5,000 $ plus interest, additional indemnity and costs.

Facts of the case

The dispute arose from a long-standing commercial leasing relationship involving premises located at 120 boulevard Henri-Bourassa Ouest in Montréal. In 1998, a commercial lease was entered into between the original landlords, Herbert Braley and Jacques Cotton, and Subway Franchise Restaurants of Canada ULC for the operation of a Subway restaurant. The building subsequently changed hands: the landlords sold the property to Camil Deluca in 2007, and in 2008 the lease between Deluca and Subway was renewed. In January 2018, 9365-3327 Québec inc. acquired the building, thereby stepping into the role of landlord.
Over the years, tensions developed between Québec inc., Subway and an operator, Anjana Patel, regarding payment of rent, electricity (Hydro) costs and municipal school taxes. The relationship deteriorated into a series of formal demands and email exchanges about alleged arrears. Québec inc. eventually commenced a small-claims action in March 2024 in the Cour du Québec, Division des petites créances, against Subway for 6,101.77 $, claiming “frais d’Hydro, loyer et taxe scolaire à la fin du bail”.
Subway contested the claim and argued that the commercial lease on which Québec inc. relied had expired on 31 July 2023 and that it had returned the premises to Québec inc. at that time. Subway also asserted that it had never been properly notified of the sale of the building to Québec inc., and raised defences of absence of legal connection and prescription. The judge later found that, as a matter of fact, Subway did know that Québec inc. was the owner and was aware of its monetary claims, based on prior demand letters and email correspondence in 2020 and 2023.
Against this background, Subway sought the forced intervention of Anjana Patel, who was involved in the operation of the Subway restaurant at the premises. Patel responded by denying liability and, in turn, filed a reconventional claim against Québec inc. for damages. Although there were procedural irregularities in the way Patel’s pleading was brought, a prior case-management judge allowed her claim to remain joined with the main proceeding rather than be severed.

Claims and positions of the parties

Québec inc.’s primary claim was a monetary demand against Subway for unpaid Hydro charges, rent and school tax allegedly owed at the end of the commercial lease. The landlord asserted that Subway remained responsible for these charges under the lease and sought recovery of 6,101.77 $, later clarified in the judgment as a claimed amount of 5,101.77 $ for which it bore the evidentiary burden.
Subway’s position was that the lease had come to an end on 31 July 2023 and that the premises had been surrendered as of that date, thereby terminating its obligations. It further challenged the existence of a proper legal relationship between itself and Québec inc. for the claimed period, and invoked prescription, while also disputing the quantum and basis of the amounts claimed. Subway maintained that it had not been validly notified of Québec inc.’s ownership or of any outstanding liabilities in accordance with the lease.
Anjana Patel’s reconventional claim targeted Québec inc., not Subway. She alleged that she had suffered significant loss of enjoyment of the premises due to several water leaks, claiming 5,000 $ on this head of damages, and a further 5,000 $ for harassment. Her position was that Québec inc., through its representatives, failed in its obligations as landlord to ensure peaceful enjoyment of the premises and that their conduct toward her amounted to unlawful harassment and discrimination.

Evidence and factual findings

In support of its claim for Hydro charges, rent and school taxes, Québec inc. filed what the judge described as “domestic papers” and a bundle of Hydro-Québec invoices. It did not submit proper accounting records capable of linking specific amounts to Subway in a manner consistent with the lease terms. The court found that the documents produced lacked reliable probative value and did not allow the court to verify the accuracy or allocation of the amounts claimed. The judge emphasized that it is not the role of the court to reconstruct or perform the claimant’s accounting work.
Email correspondence showed that Québec inc. was, at times, attempting to recoup electricity costs on the basis of what it perceived as equitable sharing rather than strictly on the terms of the lease. In a February 2022 email, the representative of Québec inc. effectively admitted that the allocation demanded was grounded in equity, not in the contract. The court took this as an indication that Québec inc. was not always relying on clear contractual obligations when pressing for payment.
On Patel’s side, the court heard testimony from Anjana Patel and a supporting witness, Divya Patel, whom the judge found credible. Patel also filed audiovisual evidence, showing conditions at the premises. She alleged recurrent water infiltration in 2018, 2020 and particularly in 2022, claiming that these leaks substantially interfered with her ability to operate the business and enjoy the premises. However, she admitted that she had never formally denounced the water-leak problems to Québec inc. in 2022, nor had she sent a written demand letter (mise en demeure) regarding those specific issues. Any claims relating to earlier incidents in 2018 and 2020 were in any event subject to prescription.
The judge also examined extensive evidence relating to Patel’s harassment claim. The court found that representatives of Québec inc., including its president, secretary and manager, had on several occasions treated Patel with contempt and discrimination, using vulgar and racist language, yelling at her, and even throwing hot coffee at her. Police were called at least once, although Patel ultimately chose not to pursue a criminal complaint. Notwithstanding her decision not to press charges, the civil evidence convinced the court, on a balance of probabilities, that Québec inc.’s representatives had engaged in repeated, wrongful conduct toward her.

Legal framework and issues

The court approached Québec inc.’s monetary claim as a standard civil claim for contractual debts under a commercial lease. Québec inc., as claimant, bore the burden of proving both the existence of Subway’s obligation under the lease and the precise quantum of the alleged arrears for Hydro, rent and school taxes. That obligation included producing coherent financial records and demonstrating that its claims were grounded in the “terms and conditions of the lease”, not merely in internal calculations or perceived fairness.
In relation to Patel’s claim for loss of enjoyment, the court applied the Civil Code of Québec’s provisions on obligations in default. Under arts. 1590 and 1595 C.c.Q., a creditor seeking damages for non-performance of an obligation generally must first place the debtor in default via a mise en demeure, allowing a reasonable delay to remedy the breach, unless an exception applies. The judge noted that Patel had not formally denounced the water infiltration in 2022 to Québec inc. or issued any prior notice before claiming damages, and that claims grounded in earlier episodes were prescribed. This lack of prior notice was fatal to her claim for damages for loss of peaceful enjoyment.
For the harassment claim, the court invoked the broader civil-liability framework. The conduct of Québec inc.’s representatives was assessed under arts. 6, 7, 10, 1375 and 1457 C.c.Q., which together impose duties of good faith, prohibit abusive and discriminatory behaviour and set out the general conditions of extra-contractual civil liability. In addition, art. 10 of the Quebec Charter of human rights and freedoms prohibits discrimination, and the racist and degrading language and behaviour attributed to Québec inc.’s representatives was found to conflict with this protected standard. The court concluded that Québec inc., through its representatives, had committed wrongful acts that caused Patel significant moral and personal prejudice.
On the procedural side, the case involved multiple irregularities. Subway brought a reconventional claim against Patel, but the court ultimately rejected that claim outright on procedural grounds and explicitly stated that it had no basis. Conversely, Patel’s reconventional plea against Québec inc., though imperfect in form, was allowed to remain joined to the main file by a prior case-management decision. The judge in this final judgment respected that management ruling and proceeded to adjudicate the merits of Patel’s claims.

Decision and outcome

The court first addressed Québec inc.’s primary claim against Subway. Because Québec inc. had failed to discharge its burden of proof regarding the specific amount of 5,101.77 $, particularly by not furnishing adequate accounting records or clear evidence tying the various Hydro, rent and school tax charges to Subway under the lease, the court rejected the action in its entirety. The judge stressed that vague domestic papers and an undifferentiated stack of utility bills could not substitute for proper, probative calculation and allocation of sums owed in accordance with the lease. As a result, the main claim against Subway was dismissed, with an award of costs in Subway’s favour.
Turning to Subway’s reconventional claim against Patel, the court found that the proceeding suffered from fundamental procedural defects. It therefore dismissed that reconventional demand outright and declared that it had “no reason to exist”, leaving Patel with no liability toward Subway and no reduction of her own rights arising from that claim.
The court then considered Patel’s reconventional claim against Québec inc. For the component seeking damages for loss of peaceful enjoyment due to water leaks, the judge accepted that the evidence showed genuine problems and found Patel and her supporting witness credible. However, Patel’s failure to denounce the 2022 infiltration problem to Québec inc. or to send a prior formal notice meant that the legal conditions for claiming damages under arts. 1590 and 1595 C.c.Q. were not met. Combined with prescription for earlier incidents, this led the court to deny the portion of her claim relating to loss of enjoyment.
The harassment component of Patel’s reconventional claim was treated differently. Here, the court found that Québec inc.’s representatives had repeatedly engaged in contemptuous, discriminatory and abusive conduct, including racist language and an incident involving hot coffee being thrown at her. This behaviour was held to be reprehensible and contrary to the Civil Code provisions on good faith and civil liability, as well as to art. 10 of the Quebec Charter. The court recognized that Patel had suffered substantial moral damages, as well as significant inconvenience and distress, directly and immediately caused by this conduct.
In exercising its discretion, the court assessed Patel’s damages for harassment at 5,000 $. It ordered 9365-3327 Québec inc. to pay this amount to Patel, together with interest at the legal rate and the additional indemnity provided by art. 1619 C.c.Q. from the date of service of her claim, plus costs. Because the judgment does not specify the exact monetary value of the interest, the additional indemnity or taxed court costs, those components of the award cannot be quantified precisely from the decision alone. Subway, for its part, successfully resisted Québec inc.’s claim and was granted its own costs on the dismissal of that action, but it received no damages. The net successful party in terms of a positive monetary award is therefore Anjana Patel, who obtained 5,000 $ in damages against Québec inc., in addition to unquantified interest, statutory indemnity and costs, while Québec inc.’s entire claim against Subway was dismissed and Subway’s reconventional claim against Patel was rejected.