Executive Summary: Key Legal and Evidentiary Issues

• Mohsen Bouali failed to obtain the financing required to complete the purchase of three FedEx Ground delivery routes, causing the conditional purchase offer to fail and triggering restitution of benefits.
• Central to the dispute was whether Bouali's failure to secure financing amounted to gross or intentional fault, or merely the non-occurrence of a conditional obligation.
• Restitution was ordered covering revenues Bouali collected and expenses the plaintiffs absorbed during his operation of the routes from August 12 to October 13, 2022.
• Claims for loss of business opportunity totaling $150,000 were dismissed for lack of convincing and sufficiently specific evidence.
• Bouali's counterclaim — alleging the plaintiffs failed to provide updated financial statements to the lender — was rejected, as the court found the required documents had in fact been transmitted.
• Legal fees of $50,000 sought by the plaintiffs on the basis of abusive procedure were denied, as the counterclaim was not found to be manifestly unfounded or frivolous.

Facts of the case

9401-9957 Québec inc., a general freight and parcel delivery trucking company, was owned and operated by Marius Florin Covaciu and his wife, Tania Covaciu. In October 2021, the plaintiffs engaged Tranzaction Courtiers d'affaires inc. — a business brokerage firm led by Marc Cadieux — to facilitate the sale of three FedEx Ground delivery routes (routes #132375-222, #132231-220, and #127962-216) to a third-party buyer. On June 14, 2022, Tranzaction and the plaintiff company signed a brokerage, sale, and financing contract fixing the total sale price at $520,000 ($500,000 for the routes plus assumption of a $20,000 RBC loan), with Tranzaction's commission set at 4% of the sale price. That same day, Marius Florin Covaciu, on behalf of the plaintiff company, signed a purchase offer with Mohsen Bouali. The plaintiffs accepted this purchase offer after receiving confirmation from Cadieux that Bouali had $125,000 available as a down payment, leaving only the $375,000 balance to be financed by a lending institution. On July 15, 2022, FedEx Ground consented to the transfer of the routes to Bouali following his successful interview with the company. Beginning August 12, 2022 — without having paid the down payment or secured financing — Bouali took over operation of the routes and began collecting the associated revenues using the plaintiffs' trucks, in order to avoid a service interruption. On September 16, 2022, Cadieux informed the plaintiffs that the transaction could not proceed due to Bouali's inability to obtain the required financing. On October 13, 2022, Bouali reversed the transfer of the routes, returning them to the plaintiffs, who resumed operations from that date.

Contractual clauses at issue

Two key provisions of the June 14, 2022 brokerage contract were central to this case. First, the contract stipulated a total sale price of $520,000 and a commission structure of 4% of the sale price, with 0.5% payable upon signing of the purchase offer and the remaining 3.5% payable at the notary. Second, the contract provided that if a potential buyer required financing to complete the transaction, only Tranzaction would have the authority to negotiate that financing with financial institutions or contacts of its choosing. The purchase offer itself conditioned the completion of the sale on Bouali's obtaining of the necessary financing — a condition that ultimately went unfulfilled.

Court's reasoning and analysis

The court found that Bouali's failure to secure financing constituted the non-occurrence of a conditional obligation under Article 1497 of the Civil Code of Québec, rather than a gross or intentional fault. The plaintiffs argued that Bouali had falsely represented his financial capacity, but the court was not persuaded, noting that apart from minor inaccuracies — such as the exact amount of his salary or the name of a former employer — Bouali testified credibly that he had relied fully on Cadieux's assurances and had made genuine efforts to obtain financing. The court found that both parties had mutually assumed the risk that financing might not materialize. Because the condition failed, the court applied the restitution of benefits framework under Article 1422 C.c.Q., entitling the plaintiffs to be made whole for the expenses they absorbed and the revenues Bouali collected during his operation of the routes from August 12 to October 13, 2022. The court awarded itemized amounts including vehicle rental fees ($1,945.49), truck usage ($8,640), vehicle registration transfers ($2,380 and $5,421.80), destroyed shelving ($336), security system costs ($259), Indeed recruitment fees ($570), the Tranzaction commission already paid ($2,989.35), net revenues earned by Bouali from the routes ($33,028.32, calculated as $120,000 in gross revenues minus $86,971.68 in expenses), two categories of lost bonuses ($9,975 and $7,740), and Marius's time spent supporting Bouali over six weeks ($6,066). The $945 claimed for fuel expenses was denied for lack of sufficient proof. The $150,000 loss of business opportunity claim was rejected as hypothetical and unsubstantiated — the plaintiffs had intended to exit the industry, only two months elapsed before the routes were returned, and no concrete steps toward any alternative business opportunity were demonstrated. The $15,000 moral damages claim was partially granted at $10,000, as the court found convincing evidence of the stress, disruption, and delays to the plaintiffs' life plans caused by the failed transaction. The $50,000 legal fees claim was denied, as Bouali's counterclaim was not deemed abusive within the meaning of Article 51 C.p.c. As for the counterclaim, the court rejected Bouali's argument that the plaintiffs had failed to provide updated financial statements, finding that the documents had been transmitted to Cadieux on December 7 and 14, 2021, and that revenue tables were also provided on July 29, 2022 at Cadieux's request. No further documents were requested by either Cadieux or Bouali. The court also gave little probative weight to a November 3, 2022 email from the Business Development Bank of Canada (BDC), as its author, Ms. Annie St-Laurent, did not testify and could not be cross-examined.

Ruling and overall outcome

The court partially granted the plaintiffs' claim and dismissed Bouali's counterclaim in its entirety, with costs awarded against Bouali. The plaintiffs — 9401-9957 Québec inc., Marius Florin Covaciu, and Tania Covaciu — prevailed. Bouali was ordered to pay them the total sum of $89,350.96, with interest and the additional indemnity under Article 1619 C.c.Q. from January 17, 2023.