Executive Summary: Key Legal and Evidentiary Issues

• Scope of a liquidator’s authority and capacity to grant a brokerage mandate where an immovable has been bequeathed in indivision to multiple legatees.
• Real estate broker’s duty of prudence, diligence and verification regarding the seller’s legal capacity to sign a brokerage contract and sell the property.
• Weight given to contemporaneous email exchanges showing the broker’s knowledge of a serious dispute and explicit objections to the brokerage mandate.
• Impact of an OACIQ finding of a deontological breach on establishing civil fault by a real estate broker.
• Causation between the wrongful listing of the property and the moral/psychological inconvenience suffered by a co-legatee, distinguished from disputes with the liquidator.
• Limits on recovery of lawyers’ fees as damages in the absence of abuse of process or exceptional circumstances.

Factual background

Pierre Doyon died on 10 December 2017, leaving a will under which his son, Michel Doyon, and four other individuals became co-legatees of the bare ownership (nue-propriété) of a residential building. His surviving spouse, Stéphanie Chartrand, received a right of use over the same property and was also appointed liquidator of the succession. As liquidator and beneficiary of a right of use, Ms. Chartrand later agreed with the legatees in principle to sell the immovable. However, by June 2019 a serious dispute arose over the terms of the sale and, crucially, over which real estate broker would receive the brokerage mandate.

Dispute over the brokerage mandate

Lawyers acting for the different parties exchanged multiple emails as the disagreement escalated. Counsel for Michel Doyon clearly warned Ms. Chartrand’s lawyer that she could not, acting alone, grant a brokerage contract and therefore could not legally give such a mandate to broker Jacinthe Labonté. He reiterated this position directly to Ms. Labonté in an email dated 26 June 2019, advising her that Ms. Chartrand had no authority to grant a brokerage mandate on behalf of the succession or for the legatees and signalling that the capacity of the liquidator to act was contested. Despite these explicit warnings, on 11 July 2019 Michel Doyon’s partner, Jennifer David, discovered that the property was being advertised for sale on the Royal LePage website, with Ms. Labonté identified as the listing broker. This prompted further correspondence from the Doyon side, including a detailed email from their lawyer to the owner of the brokerage agency, insisting that no consent had been given to a mandate in favour of Ms. Labonté and requesting that the listing be removed.

Conduct of the real estate broker

Emails circulated among counsel and the agency did not immediately resolve the impasse. The listing remained online until 18 July 2019, when it was finally withdrawn only after Michel Doyon filed a formal complaint with the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ) and the regulator intervened directly with Ms. Labonté. In contesting the Small Claims action, Ms. Labonté argued that she relied in good faith on the legal opinion of Ms. Chartrand’s lawyer that the liquidator had “saisine” of the property and full authority to sign the brokerage contract. She claimed to have made the usual verifications, pointed out that no property visits took place, and emphasised that the property had been publicly listed for only eight days before being removed. On this basis, she argued that she had committed no fault and that any alleged prejudice was not causally linked to her conduct.

Legal analysis and findings

The Court characterised the claim as one in extra-contractual civil liability under article 1457 of the Civil Code of Québec. It reiterated that a person must respect the applicable rules of conduct, drawn from the circumstances, usages or law, so as not to cause prejudice to others, and is liable for damage caused by a failure to meet this standard. The Court also referred to article 62 of the Regulation on the conditions of exercise of brokerage operations and broker deontology, which requires real estate brokers to act with prudence, diligence and competence. Assessing the evidence, the judge concluded that Ms. Labonté knew—or ought to have known—that a serious dispute existed about Ms. Chartrand’s legal capacity to grant a brokerage mandate and to sell the property. The Court rejected as implausible Ms. Labonté’s claim that she had not received the 26 June 2019 email from the Doyon lawyer, particularly given that she had received a later email from the same sender at the same address and that broker Perry Wong had warned her that “this was not an easy file,” a warning consistent with his having been copied on the 26 June message. The Court also noted that Ms. Labonté’s reaction following the 12 July 2019 email showed little concern: she aligned herself with Ms. Chartrand’s lawyer’s position and did not voluntarily remove the listing until after the OACIQ became involved. In the judge’s view, deciding to sign a brokerage contract with the liquidator and to place the property on the market in this contested context was imprudent and wrongful. The liquidator’s disputed capacity to sell and to grant a mandate was plainly a live issue, and there was nothing before the broker to suggest that the challenge was frivolous or dilatory. According to the Court, prudence and restraint should have prevailed. Although no expert evidence was adduced on the standard of care for a normally prudent real estate broker, the Court relied heavily on the OACIQ’s own conclusion that Ms. Labonté had breached her deontological obligations by failing to ensure the liquidator’s legal capacity to sign a brokerage contract for a property bequeathed by particular legacy. For the judge, this regulatory finding was sufficient to establish that the professional standard of conduct had been violated in the civil liability sense and that Ms. Labonté had committed a civil fault.

Assessment of damages

The Court then turned to causation and the scope of recoverable damages. It held that the wrongful listing of the property, without the consent of a co-legatee in indivision and in the midst of a serious conflict with the liquidator, caused Michel Doyon real inconvenience and legitimate anxiety that went beyond the ordinary annoyances of life. The distress associated with seeing the property publicly marketed in these circumstances was compensable as moral (non-pecuniary) damage. However, the judge drew a clear line between the prejudice attributable to the broker’s fault and that attributable to the underlying dispute between Mr. Doyon and the liquidator over the sale terms and the liquidator’s decision to proceed despite warnings from his lawyer. On that basis, the Court evaluated compensatory damages for inconvenience and moral prejudice at 2,000 dollars. By contrast, it refused to award reimbursement of the 2,906.57 dollars in legal fees Mr. Doyon claimed for his lawyer’s work. The judge found, first, that a significant portion of the professional services related to the broader conflict with the liquidator rather than specifically to the wrongful listing; only about five hours appeared linked to steps taken to remove the online advertisement. Second, the Court applied settled Quebec law on recovery of legal fees as damages, emphasising that, as a general rule and absent exceptional circumstances, only abuse of process in the conduct of litigation may justify such an award. Alleged “abuse” at the pre-litigation stage—on the substance of the dispute—does not ordinarily permit a party to shift its legal fees to the other side because there is no adequate causal nexus between the fault (abusive conduct before proceedings begin) and the damage (lawyers’ fees). The evidence did not reveal exceptional circumstances that would justify departing from this rule, so the claim for legal fees was dismissed.

Outcome and monetary consequences

In the result, the Court partially granted Michel Doyon’s Small Claims action. It held that real estate broker Jacinthe Labonté had breached her professional duties and committed a civil fault by accepting and acting on a brokerage mandate from a liquidator whose legal capacity to sell and to grant such a mandate was seriously contested, and by failing to respond appropriately to clear objections and warnings from a co-legatee’s counsel. For the moral prejudice and inconvenience directly caused by this wrongful listing, the Court condemned Ms. Labonté to pay Mr. Doyon 2,000 dollars in compensatory damages, plus legal interest at the statutory rate together with the additional indemnity under article 1619 C.c.Q., starting from the date of service of the action (25 May 2022), as well as 201 dollars in court costs. The total quantified monetary amount ordered in favour of the successful party, inclusive of damages and fixed judicial costs but excluding interest and the additional indemnity whose exact value cannot be determined from the judgment, is therefore 2,201 dollars in favour of Mr. Doyon.