Executive Summary: Key Legal and Evidentiary Issues

• Central dispute over whether the 18 September 2019 “Entente de rachat d’inventaire” created a vente à tempérament (sale with reservation of ownership) or a true consignation of MMI’s religious book inventory.
• Examination of the payment structure (fixed monthly sums totalling 61 855 $ over 60 months) and the clause reserving ownership to MMI “qui peut le reprendre en cas de défaut de paiement” to determine if MMI could claim the unpaid balance.
• Evaluation of the defendants’ argument that the COVID-19 pandemic and alleged unfair competition by MMI (client solicitation) should relieve them from payment or justify MMI’s obligation to retake the inventory.
• Consideration of the evidentiary record on a separate alleged agreement for 2 500 $ of store furniture and equipment, and the absence of written proof supporting that additional claim.
• Analysis of Jennie Charles’s role (registration of Librairie Kiraly Vie, participation in meetings, opening and signing on the business bank account) to decide if she is only a prête-nom or solidarily liable with Hubert Kibanda under article 1525 C.c.Q.
• Application of the civil burden of proof (articles 2803–2804 C.c.Q.) and contractual liability rules (article 1458 C.c.Q.), leading to a partial allowance of the claim and a solidary condemnation of both defendants for 57 989,30 $, plus interest and judicial costs.

Background and parties

Ministère Multilingue International (MMI) is a société sans but lucratif active in publishing, distributing and retailing religious literature. Its president is Joël Gerbore. MMI operates a retail outlet in Longueuil under the name « Diffusion Vie » in an immovable owned by Mr. Gerbore and his spouse.
Defendant Hubert Kibanda is originally from Congo, where he holds nationality. He lived in France for 28 years, working in particular as a health and safety consultant. From 2016, he visited Canada several times. In 2017, he met defendant Jennie Charles, who works in nursing, and they married in 2018. He came to live in Canada in 2019.
Mr. Kibanda and Mr. Gerbore are both pastors of confession catholique and met in 2016 in the context of potential business projects in Congo. Since 2016, during his visits to Canada, Mr. Kibanda occasionally went to Diffusion Vie to buy religious publications and meet Mr. Gerbore.

Genesis of the business arrangement

In May 2019, while visiting Diffusion Vie, Mr. Kibanda observed that a move was underway. Mr. Gerbore explained that Diffusion Vie had to move because he had just sold the building in which the store operated. Discussions then turned to the possibility that Mr. Kibanda take over Diffusion Vie’s activities.
After several meetings with Mr. Gerbore, including one with Ms. Charles, the defendants registered Librairie Kiraly Vie on 17 May 2019. MMI’s inventory, with a retail value of 135 355,55 $, was transferred to this new business « sous forme de consignation » for 61 855 $ plus applicable taxes. MMI also transferred its clientele of individuals and its telephone line, but did not give Mr. Kibanda any list of its approximately 3 000 individual customers. The transaction also included shelves, display furniture and a cash counter.
At the end of May 2019, the store inventory and furniture were moved to a neighbouring building, also owned by Mr. and Mrs. Gerbore. Mr. Gerbore and Mr. Kibanda agreed on a lease at a monthly rent of 1 900 $ so that the new business, under the name « Kiraly Vie », could operate from that location.

The written inventory buyback agreement

The parties’ relationship is documented in an « Entente de rachat d’inventaire » dated 18 September 2019. Under this agreement, MMI undertakes to cede to Librairie Kiraly Vie, « sous forme de consignation », the inventory listed in an annex, with a retail value of 137 455,55 $, with a 55% discount on the retail price for a total of 61 855 $ plus applicable taxes.
The agreement sets out a payment schedule: starting 1 October 2019, monthly payments of 400 $ (plus taxes), and from 1 January 2020, monthly payments of 1 064,12 $ (plus taxes) until 1 October 2024. The total amount must be paid over a period of five years (60 months) without interest. The agreement states that as long as the total amount of 61 855 $ is not paid, the inventory belongs to MMI, « qui peut le reprendre en cas de défaut de paiement ».
The agreement also specifies that Librairie Kiraly Vie undertakes to pay « fidèlement tous les mois les sommes dues selon le calendrier établi ci-haut pour les 60 prochains mois ». The payments apply to the « consignation » according to the order of product codes listed in the inventory annex.

Performance of the agreement and early payments

In fact, only the first 400 $ payment due 1 October 2019 was made, with taxes, as well as an amount of 2 803,10 $ paid for additional books that were not part of the original inventory. No further payments were made on the scheduled instalments of the main inventory price.
In March 2020, MMI took back part of its inventory from Mr. Kibanda, valued at 5 841,55 $, following a request from one of its suppliers. The evidence showed that this supplier delivered to MMI under a consignment agreement. In March 2020, the bookstore also had to close due to the COVID-19 pandemic. In June 2020, the inventory was moved to premises in Laval.

Subsequent dealings, statements of account and payment ultimatum

After March 2020, the only payments MMI received were for the purchase of additional books outside the original inventory. Despite an initial tolerance, the situation became concerning for Mr. Gerbore. In May 2020, he issued an ultimatum to Mr. Kibanda, requiring immediate payment for any additional books delivered.
MMI sent regular statements of account to Mr. Kibanda on 4 January, 1 February, 1 March, 1 April, 3 May, 1 June, 6 July, 9 August and 1 September 2021.

The June 2021 adjustment proposal

As time passed and matters did not resolve satisfactorily for MMI, a meeting took place in June 2021 between MMI and the defendants. Following this meeting, MMI set out its conditions for continuing the relationship in an email dated 10 June 2021. In this email, MMI accepted the defendants’ offer of an immediate payment of 2 000 $, accepted monthly payments of 250 $ payable on the 15th of each month starting 15 June, proposed a review of this arrangement at the end of September 2021, and stated that Kiraly would resume payments of 1 064,12 $ on the 15th of each month from January 2022. MMI also made an urgent request for 15 000 $ for unpaid invoices, arrears and related sums, to be paid over the next three months.
Several of these conditions were met. The immediate payment of 2 000 $ was made, and the monthly payments of 250 $ were paid until December 2021.

Defendants’ position in January 2022 and cancellation of payment

On 20 January 2022, instead of sending the 1 064,12 $ payment requested by MMI, Mr. Kibanda sent only 250 $. When MMI’s representative Terry Wilson questioned him about this insufficient payment, Mr. Kibanda replied that he owed nothing. Referring to the COVID-19 pandemic and its impact on SMEs, he stated that the products still belonged to MMI under the agreement and that MMI could take back the products if it was able to sell them, as it had done previously with certain products. He added that he was ready to go to court and asked to be sent invoices for his monthly 250 $ payments.
On 27 January 2022, Mr. Kibanda cancelled the 250 $ payment made on 20 January 2022.

Change of supplier and alleged competition

Also in January 2022, Mr. Gerbore learned that Mr. Kibanda became a member of the board of directors of Les Éditions Inspiration Inc. as of 1 January 2022. Les Éditions Inspiration is a competitor of MMI. From that point, Mr. Kibanda stopped selling MMI’s books, placed them in boxes and began offering publications from Les Éditions Inspiration to his customers.

Demand letter and commencement of proceedings

On 18 February 2022, MMI sent a demand letter to the defendants, claiming 66 330,85 $, representing the balance of the inventory it said remained unpaid and 5 303,10 $ representing books purchased subsequently.
Receiving no satisfactory response, MMI filed its claim before the Court of Québec on 13 April 2022, seeking 66 341,67 $ from the defendants. At the hearing, MMI reduced its claim to 60 489,30 $ to account for the return of material in March 2020.

Applicable legal framework and burden of proof

The court recalled that under articles 2803 and 2804 of the Code civil du Québec, MMI had to prove the merits of its claim on a balance of probabilities. MMI had to present convincing evidence making the existence of the alleged facts more probable than their non-existence. The court noted that responsibilities are established in light of the most probable facts and that a mere possibility or hypothesis is insufficient. If the evidence is not sufficiently convincing or is so contradictory that the truth cannot be determined, the outcome is decided according to the burden of proof: the party who bears the burden and does not discharge it sees its claims rejected.
On the contractual side, the court cited article 1458 C.c.Q. on the obligation to honour contractual commitments and articles 1708 and 1745 C.c.Q. on the definition of sale and sale on instalments (vente à tempérament). It also recalled article 1710 C.c.Q., which provides that a promise of sale accompanied by delivery and actual possession is equivalent to a sale.

Consignment criteria and characterization of the agreement

The defendants argued that the agreement was one of consignation. The court noted that consignment is not a named contract in the Code civil du Québec but can be identified using criteria such as: conclusion of an agreement; particular identification of consigned products so as not to confuse them with the consignee’s own; separate accounting to identify proceeds from consigned products; payment being due only after the consignee sells the product; return of unsold products to the supplier; and conduct of the parties consistent with a consignment contract.
The court observed that the consignment contract has variants and is governed by the parties’ agreement. Generally, the owner gives the good to the consignee to be sold; if there is a sale, the consignee pays the price to the owner; if not, the owner takes back the good. To determine the true legal nature of the September 2019 agreement, the court applied articles 1425 to 1432 C.c.Q., which direct the judge to search for the parties’ common intention rather than the literal sense of the words used.

Court’s analysis of the parties’ intention

The court found that MMI promised to sell the Diffusion Vie inventory to Mr. Kibanda and then delivered possession of it. In such circumstances, article 1710 C.c.Q. applies and a sale is presumed.
The court stated that it was up to Mr. Kibanda to convince it that, in all probability, he and Mr. Gerbore had agreed to a consignment whereby MMI would have to take back the inventory if sales were not made. The court noted that the agreement stipulated that MMI could take back the inventory, but not that it had to do so. That right was linked to a default in payment.
Several elements led the court to reject the probability of consignment: the discussions referred to a cession of the Diffusion Vie inventory and the agreement was titled « Entente de rachat d’inventaire »; after those discussions, the inventory was delivered and possession transferred; in the agreement, the possibility for MMI to take back the goods was conditional on a default of payment by Kiraly Vie; the presence of fixed periodic payments totalling the full sale price over time on specific dates was compatible with a sale on instalments rather than a consignment; several payments were made to MMI that did not depend on actual sales and followed the agreed schedule; the invoice amounts claimed by MMI were calculated based on the initial agreement, not on sales completed by Kiraly Vie; and when MMI pressed for payment, the defendants did not claim the agreement was a consignment or ask MMI to take back the inventory, but instead agreed to a 2 000 $ payment and a fixed-payment arrangement, which they respected for six months.
The court also considered it important that, during the pandemic, Mr. Kibanda acted like an owner by moving the inventory to new premises without asking MMI to retake possession. The court concluded that the parties’ interpretation of the agreement did not support a consignment and that the agreement contained no consignment component. Since the material was delivered by MMI, the amount of 57 989,30 $ claimed for the inventory was due and had to be paid.

Pandemic argument and unfair competition allegations

The court rejected the defendants’ argument that the pandemic should alter the outcome. It noted that this argument was raised only in January 2022 by Mr. Kibanda, after the inventory had already been moved and payments had been made to MMI from July to December 2021.
As for the allegations of unfair competition, the court observed that the agreement’s terms clearly stipulated that only where Mr. Kibanda was not in default did MMI have to refrain from directly soliciting the clientele. The court found that default was clearly established. Furthermore, no evidence was produced to prove the alleged acts of solicitation. The unfair competition defence therefore did not meet the required evidentiary threshold.

Separate 2 500 $ claim for furniture and equipment

MMI also claimed an amount of 2 500 $ for furniture and equipment described in a document. The court stated that it was unable to conclude, on a balance of probabilities, that an agreement had been reached concerning the sale of this material. There was no written agreement on this point, and Mr. Kibanda testified that the 2 500 $ price requested by MMI was never discussed with Mr. Gerbore. This evidence was not convincingly contradicted.
Although Mr. Gerbore referred several times in his testimony to the 2 500 $ amount claimed, the court was not persuaded that an agreement existed for the sale of this material. As there was no proof of any commitment by either defendant to pay the 2 500 $ for the items listed, this part of the claim was dismissed and the condemnation was limited to 57 989,30 $.

Role and liability of Jennie Charles

The defendants argued that, because of Mr. Kibanda’s status in Canada, he could not create the business name in his own name and that Ms. Charles intervened only as a prête-nom, without any intention to play a role in operating the business.
The court found that the evidence did not support this contention. Mr. Gerbore presented the bookstore project to both Mr. Kibanda and Ms. Charles. Ms. Charles agreed to participate by registering, along with Mr. Kibanda, a business name that would take charge of marketing the books. In doing so, she supported and even guaranteed the project. She was involved when the book inventory was completed and was also present at the meeting with Mr. Wilson where certain payment terms towards MMI were established.
The court concluded that this active participation excluded the notion that she was only a prête-nom and made it too difficult to see her as a stranger to Kiraly Vie’s affairs. Although she said she signed cheques only because the bank account was opened in her name and that Mr. Kibanda filled them in, the court did not accept that this insulated her from responsibility. By opening a bank account in the name of Kiraly Vie and asking to be able to issue cheques, she confirmed the strong probability that she held a managerial and representative position for the business name. By signing cheques in favour of MMI, she was acting for and on behalf of the enterprise.
The court referred to article 1525 C.c.Q., which states that solidarity between debtors of an obligation contracted for the service or operation of an enterprise is presumed. It held that there was no doubt that Kiraly Vie’s obligations were contracted in the course of operating an enterprise. In signing cheques to MMI, Ms. Charles, representing Kiraly Vie, de facto acknowledged the existence of a legal relationship and liability of the business towards MMI, which entailed her solidary liability with Mr. Kibanda for obligations contracted for Kiraly Vie.
The court also noted that Ms. Charles was identified as the person operating the enterprise in the « État des renseignements d’une personne physique exploitant une entreprise individuelle » filed by MMI. Under article 98 of the Loi sur la publicité légale des entreprises, the information in the enterprise register is proof of its content in favour of third parties in good faith, and that information, including the name and address of the administrator, is presumed accurate. Given this registration, the court found it difficult to conclude she was not involved in the enterprise.
The court stated that, at the very least, by lending her name to Mr. Kibanda, Ms. Charles endorsed the obligations he undertook and had to be held responsible.

Interest and costs

The court held that the amount of 57 989,30 $ owed by the defendants to MMI bore interest at the legal rate, plus the additional indemnity, from 28 February 2022. This date corresponded to the expiry of the grace period granted in the 10 February 2022 demand letter, received on 18 February 2022.
The court found no reason to depart from the general rule in article 340 of the Code de procédure civile, which provides that the losing party must bear the successful party’s legal costs.

Final decision and outcome

The court allowed MMI’s claim in part. It condemned defendants Jennie Charles and Hubert Kibanda Kiamvu, solidarily, to pay 57 989,30 $ to plaintiff Ministère Multilingue International, with interest at the legal rate plus the additional indemnity from 28 February 2022, together with judicial costs in favour of MMI. The claim for the additional 2 500 $ for furniture and equipment was dismissed. The successful party is therefore Ministère Multilingue International, and the total monetary relief expressly ordered in the judgment consists of 57 989,30 $ in principal, plus interest and the additional indemnity from 28 February 2022, and court costs, the exact amounts of interest and costs not being quantified in the judgment.