Executive Summary: Key Legal and Evidentiary Issues

• Ltée sought recovery of amounts it alleged Inc. and David Murray collected on its behalf and failed to remit, claiming up to $286,611.07 related to unpaid invoices for the Regency project.
   
• Defendants disputed the scope of the claim, ultimately conceding that a balance of $72,546.63 collected from a client remained unremitted.
   
• Conflicting accounting records and witness recollections made it difficult to determine the true amount outstanding for work performed between 2013 and 2018.
   
• Prescription was raised as a defence, turning on when Ltée acquired sufficient knowledge of the facts underlying its claim.
   
• Corporate veil-lifting principles were examined to determine whether David Murray could be held personally and solidarily liable with Inc.
   
• Testimony from a third-party client proved determinative in resolving the disputed payment figures.
   

Facts of the case

Entreprises d'électricité E.J. Ltée (Ltée) is an electrical contracting business originally owned by James Murray (father), his wife, and business partner Erwin Wexberg. After Wexberg's retirement, David Murray joined as a shareholder alongside his father; James Murray (son) later also became a shareholder. Around 2012, David Murray incorporated his own company, Les Entreprises E.J. Électriques Inc. (Inc.), which shared overlapping resources and personnel with Ltée despite maintaining separate accounting records.

Around 2013, one of Ltée's clients, 6036821 Canada Inc. (603), retained Ltée's services for a project known as the Regency project. In 2016 or 2017, James Murray (father) asked David Murray to help collect unpaid invoices from 603. During 2017 and 2018, Inc. collected a series of payments from 603 and remitted just over $80,000 to Ltée between April 2017 and January 2018, but retained additional amounts without disclosing this to his father. In December 2022, after being confronted, David Murray paid Ltée an additional $162,339.97 but retained a balance of $72,546.63 [the judgment also states this figure as $72,646.63 in several paragraphs, including paragraphs 56, 57, 68, and 96 — this discrepancy appears in the source document and has not been resolved by Claude], citing his belief that Ltée owed money to Inc. for shared resources.

Ltée also alleged that David Murray failed to remit $4,500 received from settling separate litigation against a client, Themis Ephraimidis, in 2017.

Policy and legislative provisions at issue

The Court applied several provisions of the Civil Code of Québec (CCQ). Article 2803 CCQ places the burden of proof on the party asserting a claim. Article 2880 CCQ provides that extinctive prescription begins to run once the plaintiff has sufficient knowledge of the facts underlying its right of action, while article 2904 CCQ suspends prescription against a person who is factually unable to act. Article 1619 CCQ governs the additional indemnity awarded alongside legal interest. Article 317 CCQ addresses the circumstances in which a corporation's separate legal personality may be disregarded, permitting personal liability where the corporate form is used to dissemble fraud, abuse of right, or contravention of a rule of public order.

Reasoning and analysis

The Court found Ltée's evidence for the larger claimed amounts unpersuasive. Ltée relied on internal tables suggesting Inc. owed either $169,923.55 or $286,611.07 [the judgment itself states this figure inconsistently, also referencing $286,621.07 in paragraphs 21 and 24], but these calculations assumed every invoice issued had been paid, without supporting cheques or documentary proof. Critically, Ltée's own witness, Mr. André Mae of 603, testified that 603 had paid all amounts it owed, never paid in cash, and that the total paid to Inc. during 2017 and 2018 was $316,378.80 — a figure matching what the defendants acknowledged receiving. The Court concluded Ltée failed to establish that any further amount had been collected by Inc. beyond the acknowledged $72,546.63 (or $72,646.63, per the inconsistency noted above).

On the $4,500 settlement-related claim, the Court accepted David Murray's account that his father had authorized him to retain the funds, given James Murray (father)'s impaired memory and inability to testify unequivocally to the contrary.

On prescription, the Court found Ltée did not have sufficient knowledge of its right of action until late 2022, when it learned that 603 claimed to have paid its invoices in full — contradicting David Murray's years-long representations that amounts remained outstanding. As the Originating Application was filed in 2023, the claim was not prescribed.

On corporate veil-lifting, the Court declined to hold David Murray personally liable. It found the failure to remit funds stemmed from lax accounting practices and a blurred understanding of the separate identities of Ltée and Inc., rather than fraud, abuse of right, or an intent to shield David Murray from liability under article 317 CCQ.

Ruling and overall outcome

The Court granted the Originating Application in part, finding in Ltée's favour on the core misappropriation claim while rejecting the larger sums sought and the personal liability claim against David Murray. Inc. was ordered to pay Ltée $72,546.63 [stated elsewhere in the judgment as $72,646.63], together with interest at the legal rate and the additional indemnity under article 1619 CCQ, running from the date of the demand letter, June 5, 2023. The claim regarding the $4,500 settlement proceeds was dismissed, as was the claim to hold David Murray personally and solidarily liable. Costs were awarded against the defendant, though no specific amount is stated in the decision.