Executive Summary: Key Legal and Evidentiary Issues

• Disputed deductions from remuneration form the core of the claim, with the plaintiff seeking recovery of amounts withheld by the defendant from payments for freight transport services.
• Both parties raised late procedural objections — including a challenge to the defendant's proper legal identity and a request to recharacterize the relationship as employment — which the court declined to entertain.
• The contract alleged to govern the parties' relationship was unsigned, rendering it inadmissible and leaving the contractual basis for the deductions unestablished.
• United City Cartage Limited confirmed that $4,358.70 had been withheld from the plaintiff's payments, covering three fines, damages, and towing costs, but failed to produce invoices or supporting documents when ordered to do so.
• Negative inference was drawn against the defendant for its failure to produce the requested documents, undermining its justification for the deductions.
• Insufficient evidence precluded recovery of several items claimed, resulting in only partial relief being granted.

Facts of the case

The plaintiff, 9353-3602 Québec Inc., brought a claim before the Small Claims Division of the Court of Québec against United City Cartage Limited, seeking $8,055 representing amounts allegedly withheld without right from its remuneration for freight transport services. The company's sole representative, Sarbjit Singh Khatria, initiated the proceedings on November 3, 2022, originally naming different parties before the designations were corrected. The claim itemized deductions including $4,500 for truck repairs, $1,000, $750, and $700 for three traffic violations, $34.48 for a fuel item, $11.25 for a tool, $210.03 for fuel, $475 for unpaid hours on July 22, 2022 — the day the truck broke down — and $374 described without further detail.

The matter had a protracted procedural history. A first hearing on September 20, 2024, proceeded by default in the absence of United City, which subsequently sought retraction on the basis that it had received the notice of hearing three weeks after the hearing date. A retraction hearing scheduled for February 28, 2025, proceeded by default against the plaintiff, as Mr. Khatria was then incarcerated. He in turn sought retraction of that decision, and a new hearing was ultimately held on March 13, 2026, with both parties present.

Contractual and evidentiary issues

The representative of United City acknowledged during testimony that a contract existed between the company and 9353-3602, but was uncertain whether it had been signed. The court ordered a copy to be produced, and the version submitted contained no signatures. The unsigned contract was accordingly given no weight. United City's representative also testified — for the first time at the hearing — that the legal relationship was not with United City but with a sister company, United Highways, which owned the trucks. The court rejected this argument as untimely and noted that truck ownership is not a sufficient indicator of who the contracting party was. This position also contradicted the defendant's own initial contestation filed on December 14, 2022, which stated that Mr. Khatria was under contract with United City as an incorporated driver.

Similarly, Mr. Khatria attempted, through submissions that appeared to have been prepared by counsel, to have the court recognize the relationship as an employment relationship rather than a commercial one. The court declined, finding this request both untimely and unsupported by evidence, as the case had already proceeded on the basis of the plaintiff's own earlier testimony.

Court's reasoning and analysis

The court focused on whether United City was justified in making the deductions from the plaintiff's payments. United City's representative confirmed that $4,358.70 had been withheld from cheques payable to 9353-3602, comprising amounts of $1,000, $700, and $1,018.70 retained in July and August 2020 for fines and damages, as well as $940 in towing charges on September 11, 2020. The court ordered United City to produce invoices and documents supporting these deductions and their nature, but when the defendant responded, it submitted only a duplicate of an already-filed exhibit — Mr. Khatria's timesheet for July 22, 2020 — without attaching the requested invoices.

The court drew a negative inference from this failure, reasoning that had the documents supported United City's position, they would have been produced. As for the $4,500 claimed for truck repairs, the court found that the invoices submitted in support of the defense did not establish that the damage was caused by dangerous driving on Mr. Khatria's part, as opposed to mechanical failure or an accidental maneuver. Mr. Khatria, for his part, was unable to specify the number of unpaid hours, the nature of the violations, his related expenses, or even his hourly rate, and he produced only the demand letter he had sent in May 2022, having lost his other documents while incarcerated.

Ruling and outcome

The court allowed the claim in part. United City Cartage Limited was ordered to reimburse 9353-3602 Québec Inc. the full amount of the confirmed deductions — $4,358.70 — plus $475 for the unpaid hours on July 22, 2020, for a total of $4,833.70. The court additionally ordered legal interest and the additional indemnity under Article 1619 of the Civil Code of Québec from November 16, 2022, the date of service, along with court costs of $201. The remainder of the claim was dismissed for insufficient proof.