Rai Trucking Ltd. v Barakat Industries Ltd., 2012 ABQB 249

Court of Queen ’ s Bench of Alberta Citation: Rai Trucking Ltd. v Barakat Industries Ltd., 2012 ABQB 249 Date: 20120416 Docket: 0003 21669, 0003 21670 Registry: Edmonton Between: Action No. 0003 21669 Rai Trucking Ltd. Plaintiff - and - Barakat Industries Ltd. Defendant And Between: Action No. 0003 21670 Dhya Transport Ltd. Plaintiff - and - Barakat Industries Ltd. Defendant _______________________________________________________ Reasons for Judgment

of the Honourable Madam Justice L.D.

Acton _______________________________________________________ [ 1 ] By a letter to the parties dated November 28, 2011, Court Services, Court of Queen ’ s Bench/Accounting triggered the questions that come before the Court in this application concerning entitlement to monies that have been on deposit in Court for approximately 10 years to the credit of two actions involving the Defendant Barakat Industries Ltd. ( “ Defendant ” ). [ 2 ] In November 2000, the Plaintiff Dhya Transport Ltd. issued a Statement of Claim against the Defendant for $13,325 and the Plaintiff Rai Trucking Ltd. issued a Statement of Claim against the Defendant for $12,957 (the “ Plaintiffs ” ).

The claims were for payment of sums owing under contracts for trucking services provided by both Plaintiffs to the Defendant for hauling under 4,000 loads of aggregate by Rai Trucking Ltd. during the period November 1, 1999 to December 21, 1999 and 61 tri-axle loads and over 4,000 tandem loads by Dyha Transport Ltd. all during the same time period.

The actions were defended and went to Examination for Discovery (as it was then known) on September 6, 2001. [ 3 ] At the Examination for Discovery, the manager and president of the Defendant confirmed that the money which was paid into Court was money he tried to give each of the Plaintiffs but was refused by them. In this context, the evidence which is found in the Memorandum of Decision issued by Madam Justice Veit and reported in 2003 ABQB 177 at para 9 is as follows: Q Okay. Fair to say it was a conditional payment? A Yes, sir. Q Like, this is all you are going to get? A That's all we all had, sir.

Q You acknowledge that you owe the holdback? A Yes, sir, I did. Q So there is really no reason why that can't be paid unconditionally? A Oh, absolutely. [ 4 ] An application was made for

Summary Judgment before Master Quinn and he granted the application for part of the Plaintiffs ’ claims but denied their applications to refer the balance of the claims to the Provincial Court, Civil Division. Master Quinn ’ s Order was appealed by the Defendant and Madam Justice Veit held that

Summary Judgment should not have been granted; citing the well known rule that

summary judgment cannot be granted where the defendant swears to facts which, if believed, would give a valid defence. The Defendant ’ s Affidavit took issue with the calculations made by the Plaintiffs on the issues of the hold back and, of course, the final numbers are the precise issue in a debt claim such as this. [ 5 ] Subsequently on December 2, 2003, an Order was made consolidating the two actions for trial. A Pre-Trial Conference was heard by Justice Sanderman on May 11, 2004. The trial fee was paid. The Record prepared and filed. The trial commenced before Mr.

Justice Lewis on October 18, 2004 at which time counsel for the Defendant applied to Justice Lewis to have the matter transferred to Provincial Court explaining that the Defendant had initially opposed a request to transfer the case to Provincial Court. [ 6 ] Justice Lewis recommended that a Judicial Dispute Resolution (JDR) be conducted immediately. He adjourned the trial and ordered costs to both Plaintiffs in the sum of $1,500 payable forthwith by the Defendant to each of the Plaintiffs.

[ 7 ] The Defendant filed a Notice of Change of Solicitor on March 10, 2005. The Procedure Card and file indicate that nothing further happened, as far as the Court process is concerned, until the letter regarding the funds remaining in Court was sent to parties. Following receipt of the Clerk ’ s letter the Plaintiffs ’ application came before me to have the funds that have been sitting in Court for the past 10 years paid out to them. And shortly thereafter, an application was made by counsel for the Defendant to set aside the Order directing payment out.

The Defendant ’ s counsel submitted, among other points, that: 1. The Defendant received no notice of the Plaintiffs ’ intention to have the monies paid out; and 2.

The “ drop-dead ” rule would apply; and accordingly, the monies should go to the Defendant which had intended to bring such an application. [ 8 ] Consequently, I made an Order to set aside the direction to pay the monies out to the Plaintiffs pending resolution of these issues in order that the history of the file and the applicable law could be canvassed. [ 9 ] The two Plaintiffs ’ officers are now representing themselves and have limited sophistication in these matters.

They had relied on the Law Information Centre (LInC Centre) to assist them in applying for the payment out following the aforementioned letter from the Clerk ’ s Office which effectively invited them to do so.

The Defendant ’ s counsel prepared a brief of the law on the Old Rules and New Rules to assist the Court in applying the law in matters that span the amount of time in question, and in light of the complete revision of the Alberta Rules of Court [ Rules of Court ] under the circumstances of the interaction of the parties and the application for payment out of the monies. [ 10 ] The first submission of Counsel for the Defendant is that the Plaintiffs came to Court asking for payment out without clean hands because they presented to the Court a copy of Master Quinn ’ s

Summary Judgment attached to the Affidavit asking for payment out pursuant to the Judgment they had obtained rather than asking for payment out in accordance with the letter they had received which indicated that it was a payment in as satisfaction before Judgment. Counsel was aware that it was a payment in before Judgment. The Plaintiffs ’ lawyers prior to ceasing to act were aware that it was a payment in before Judgment. [ 11 ] Indeed, the Defendant chose to leave the monies in Court even after Madam Justice Veit determined that this was not a case where

Summary Judgment could be successful. They left the money in Court as satisfaction during the time leading up to trial before Mr. Justice Lewis. That money was left in Court by the Defendant for acceptance at any time with full knowledge that it could always be taken out by the Plaintiffs as full satisfaction of their claims. [ 12 ] It is clear that the Affidavits prepared by the LInC Centre in assisting the Plaintiffs to come before the Court ex parte to ask for payment out were inaccurate as to the proper picture and reason that the monies would be properly payable to them.

But if one examines, Exhibit “ B ” to Rachhpal Singh Rai ’ s Affidavit, it is clear from the letter of accountant Nicole DesAulniers-Stansky that she is enclosing for Mr. Rai a copy of the QB Record and Account Inquiry Report, which indicates “ offer before Judgment monies. ” Accordingly, a close reading of the materials makes it clear that it is not the Judgment but the “ offer before Judgment ” that is being sought to be paid out here.

And thus by seeking payment out all these years later, the Plaintiffs are in essence finally accepting these monies as full satisfaction of their “ claims ” , not Judgments which no longer exist, having been vacated by Justice Veit ’ s decision. [ 13 ] Counsel for the Defendant acknowledges that the reason the Defendant had not applied to have the money paid out to the Defendant years ago is because the Defendant forgot about the monies sitting in Court.

I suspect that it is reasonable to assume that the Plaintiffs too, forgot about this matter once they had been frustrated on the day of trial when the Defendant at that time requested and sought the adjournment which Justice Lewis granted with significant costs payable to each Plaintiff. [ 14 ] The Defendant submits that the “ drop-dead ” rule applies in its favour and effectively means that as of January 28, 2010 the Plaintiffs could take no further steps and therefore the money has to be returned to the Defendant and that is the end of the matter. I disagree.

That might be the case should the Plaintiffs attempt to set down a motion for a hearing or do anything to move the action along. However, it would not have any effect on the right to claim money paid into Court to their credit which is sitting there with no conditions; and with the Defendant saying in essence “ we leave this much money in full satisfaction of your claim if you will take it. ” The Defendant has acknowledged that they owe the Plaintiffs something and they have quantified that amount clearly by leaving those monies in Court at a time when they were well aware of what they were doing.

The fact that the Defendant subsequently forgot those

monies were in Court is of no consequence at this time. [15] The length of time the money has sat in Court to the credit of the Action has no relevance and the “drop-dead” rule does notapply to that: Clarke (Re), [1925] OJ No 457. [16] Did the Plaintiffs have to give the Defendant notice prior to taking the money out of Court? The British Columbia SupremeCourt which has a similar rule to our “old rule 166 and 167 combination” in Alberta held that notice was not a condition precedent beforethe money was taken out of Court.

Justice Hutchinson in Karpiak v Lancaster (1992), (BC SC), 68 BCLR (2d) 389,1992 CarswellBC 186 at para 4, comments about the rule and states that: I am not satisfied the rule ... requires the notice of acceptance to be delivered before the money is paid out of court; that is a possibleinterpretation, but the rule is not specific and because there has been a failure to do so it does not follow that there has beennon-compliance with the rule. Once the money is paid into court, it can be accepted and taken out of court by filing the notice underform 29.

The delivery of the notice is not made a condition precedent by the rule to payment out though R. 37(11) does imply that bothevents be contemporaneous. Failure to deliver the notice of acceptance in a timely manner would likely result in an additional cost beingincurred by the defendant which would then in turn have to be borne by the plaintiff. In those circumstances, the plaintiff, in failing todeliver the notice of acceptance contemporaneously with the filing of the notice of acceptance, would be penalized by additional costs.

Inall other respects, the acceptance of money paid into court acts as a stay of proceedings ... [17] It is important to note what Justice Hutchinson says about acceptance of the money paid into Court acting as a stay ofproceedings. Clearly, the Defendant in the present case received notice that the money had been accepted and paid out to the Plaintiffs.Therefore, no further actions need to be taken or can be taken because the acceptance means that the action has been stayed and theDefendant is not in a position to bring an application on the issue of delay.

Once the Plaintiffs received their certificates of payment outfrom the Court, subsequent applications in the proceedings were effectively stayed. [18] The Order that I made on February 2, 2012 effectively stayed proceedings until the matter could be resolved but has no effecton the validity of the January 25, 2012 Order which I find to have been a proper payment out Order which could have been asserted thenor at any time by the Plaintiffs as long as the monies were sitting in Court to the credit of that action: Micklethwaite v Vavasour (1893),9 TLR 376, cited in WA Stevenson & JE Côté, Civil Procedure Encyclopedia, Vol 2 (Edmonton, AB: Juriliber, 2003) at 32 - 58.

Such anOrder as was made on January 25, 2012 is not a Judgment: Newall v Tunstall, [1971] 1 WLR 105, cited in Hubley v Nova ScotiaBuilding Supplies Ltd. (1982), 29 CPC 202, 1982 CarswellNS 82 at para 3. [19] In conclusion, the equities in this case favour the Plaintiffs who attempted to have this matter tried in front of Justice Lewiswhich trial was adjourned upon the application of the Defendant on the date of trial.

From that time, the Court is unaware of whathappened except to know that Counsel for the Defendant was subsequently retained and nothing transpired on the file until the mattercame before me in 2012. [20] The Plaintiffs on their own and with the assistance of the LInC Centre responded to the letter from the Clerk by making anapplication to have the sum which they had initially rejected, finally paid out as full satisfaction of their claims; and I made an Orderproviding for that to be done.

The Defendant decided to use the Rules of Court to claim that money back for its own purposes attemptingto enlist that legislation to defeat any obligation it had to pay the Plaintiffs monies due and owing to them in an amount which had notbeen quantified by the Court some 10 years ago. [21] The law does not favour the Defendant nor do the equities favour the Defendant in the circumstance. The Defendant’sapplication is dismissed and the Order of January 25, 2012 stands.

The Defendant is directed to return the monies it holds in trust to thePlaintiffs forthwith. [22] Counsel for the Defendant is to be complimented on the effort he put into this matter and the professionalism with which heconducted this very difficult historical and challenging file.

Heard on the 30 th day of March, 2012. Dated at the City of Edmonton, Alberta this 16 th day of April, 2012. L.D. Acton J.C.Q.B.A. Appearances: Rai Trucking Ltd. and Dhya Transport Ltd. Appeared on their own behalf Zachary H. Lindop, Student-At-Law Bishop & McKenzie LLP for the Defendant