Court of Queen ’ s Bench of Alberta Citation: Underworld Services Ltd. v. Money Stop Ltd., 2012 ABQB 327 Date: 20120517 Docket: 1104 00837 Registry: Grande Prairie Between: Underworld Services Ltd. Applicant - and - The Money Stop Ltd. and Byron Tel Seath Sutherland Respondents Editorial Notice: On behalf of the Government of Alberta personal data identifiers have been removed from this unofficial electronic version of the judgment. _______________________________________________________ Memorandum of Decision of the Honourable Madam Justice J.B. Veit _______________________________________________________

Summary

[1] During the course of a civil contempt hearing at the conclusion of which the court declared Mr. Sutherland in contempt, thecourt decided that the documents presented by Mr. Sutherland to the Clerk of the Court were not a “negotiable monetary instrument” andthat Mr. Sutherland had not, by presenting those documents, satisfied the judgment against him. The court undertook to give reasons toMr.

Sutherland for its decision on the negotiable monetary instrument issue; these are those reasons. [2] A birth certificate with a vague account number written on it is not a recognized medium of commercial exchange withinCanada. Nor is there is any trade custom that makes such a photocopy of a birth certificate transferable and capable of being sued upon.Assuming for the purposes of this decision that Mr. Sutherland could satisfy the outstanding judgment against him with a negotiablemonetary instrument, the documents provided by Mr. Sutherland do not constitute such an instrument.

Cases and authority cited [3] By the court: Dokaj v Canada (Minister of National Revenue), 2005 FC 1437 , [2005] F.C.J. No. 1783;. Stroud’s Judicial Dictionary, 6th ed., vol. 2, Sweet & Maxwell, London, 2000; Words & Phrases Legally Defined, 2nd . ed., vol. 3,Butterworth’s, London, 1969. Appendix A: Documents provided by Mr. Sutherland Appendix B:

Definitions 1. Background [4] Mr. Sutherland is one of the defendants in this action. By decision of this court, a default judgment was granted against him.Mr. Sutherland was then directed by the judgment creditor to provide a Financial Statement of Debtor within a certain time period. WhenMr. Sutherland failed to provide the required document, on April 20, 2012, the judgment creditor obtained an order of the court requiringMr. Sutherland to provide that document. When Mr. Sutherland failed to obey the court order, the judgment creditor brought contemptproceedings against Mr.

Sutherland. [5] At the contempt hearing, Mr. Sutherland maintained that he had satisfied the judgment against him on April 16, 2012 byproviding to the Clerk of the Court the documents which are reproduced at Appendix A which constitute, in Mr. Sutherland’s opinion, anegotiable monetary instrument. Those documents consist of a covering letter with a signature, a copy of a court order grantingsummary judgment across which were handwritten the words “Accepted for value” with the same signature as on the covering letter, anda photocopy of Mr.

Sutherland’s birth certificate across which were handwritten “Deposit to court file #1104 00837" - which is thecorrect file number of these proceedings - and “Pay through account #[...]". At the contempt hearing, where he appeared on his ownbehalf, Mr. Sutherland declined to provide any information about the “account no.” i.e. what kind of account, in which institution, inwhich location, etc. Mr. Sutherland stated that while he did not have any positive support for his contention, nor had he ever been toldthat he was wrong. The court told him that he was wrong and that it would provide to Mr.

Sutherland the reasons for its conclusion. [6] The court went on to find Mr. Sutherland in contempt and to impose a sanction if Mr. Sutherland did not purge his contempt.These are the promised reasons for the court’s conclusion that the documents provided by Mr. Sutherland do not constitute a negotiablemonetary instrument. 2. Do the documents provided by Mr.

Sutherland constitute a negotiable monetary instrument? [7] The short answer to that question, the answer given at the hearing, is, No. [8] It was necessary to undertake to provide reasons for the conclusion because the reasoning which undergirds the conclusionrequires setting out a chain of reasoning.

[ 9 ] First, in Canadian common law, there are no universally accepted

definitions of either “ monetary ” or “ negotiable instrument ” . In some situations, a statute defines “ negotiable instrument ” for the purposes of that legislation.

In each situation where there is need to define the terms, the court applies general principles to the specific facts in order to reach a conclusion. [ 10 ] Second, in general terms, money is a recognized medium of financial and commercial exchange within a community; monetary is that which has a relationship to money. [ 11 ] A negotiable instrument is “ by the custom of the trade, transferable, like cash, by delivery and is also capable of being sued upon by the person holding it pro tempore. . . . The negotiable instruments most commonly known are bills of exchange, promissory notes, and bills of lading ” : see

definitions attached as Appendix B. [ 12 ] In Dokaj , we can see reference to a definition contained in the Cross-border Currency and Monetary Instruments Reporting Regulations : (

b) negotiable instruments, including bank drafts, cheques, promissory notes, travellers' cheques and money orders, other than warehouse receipts or bills of lading. [ 13 ] Third, the documents provided by Mr. Sutherland are in no way a recognized medium of financial and commercial exchange within Canada. A birth certificate with a vague account number written on it is not recognized by the custom of tradespeople as being a document which has the same type of value as cash, which is transferable and which can be sued upon. [ 14 ] In the result, assuming for the purposes of this decision that Mr.

Sutherland could satisfy the outstanding judgment against him with a negotiable monetary instrument, the documents provided by Mr. Sutherland do not constitute such an instrument. Heard on the 16 th day of May, 2012. Dated at the City of Grande Prairie, Alberta this 17 th day of May, 2012. J.B. Veit J.C.Q.B.A. Appearances: Lanny G. James, Biamonte Cairo & Shortreed LLP for the Applicant Byron Tel Seath Sutherland, on his own behalf Appendix A

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Appendix B Negotiable. “ It may be laid down as a safe rule that where an instrument is, by the customs of the trade, transferable, like cash, by delivery, and is also capable of being sued upon by the person holding it pro tempore , there it is entitled to the name of a negotiable instrument, and the property in it passes to a bona fide transferee for value, though the transfer may not have taken place in market overt.

But if either of the above requisites be wanting – i.e. if it be either not accustomably transferable, or, though it be accustomably transferable, yet, if its nature be such as to render it incapable of being put in suit by the party holding it pro tempore – it is not a negotiable instrument; nor (apart from the question of estoppel) will delivery of it pass the property of it to a vendee, however bona fide, if the transferor himself have not a good title to it and the transfer be made out of market overt ” (1 Sm. L.C. 456, summarising Miller v.

Race and it cognate authorities, and quoted with approval by Blackburn J., Crouch v. Credit Foncier of England , L.R. 8 Q.B. 381, 382). See further Taylor v. Kymer , 3 B. & Ad. 320. The negotiable instruments most commonly known are bills of exchange, promissory notes, and bills of lading. A bill of exchange or promissory note is negotiable if made payable “ to order ” , or contains no words prohibiting transfer (Bills of Exchange Act 1882 (c.61), ss.8, 89; see NEGOTIATE); secus , of a bill of lading ( Henderson v. Comptoir D ’ Escompte , L.R. 5 P.C. 259, cited ASSIGNS). Foreign bonds ( Gorgier v.

Mieville , 2 L.J.K.B.O.S. 206) and debentures payable to bearer ( Bechuanaland Exploration Co. v. London Trading Bank [1898] 2 Q.B. 658 , followed in Edelstein v. Schuler [1902] 2 K.B. 154 , cited LAW MERCHANT; see also Auchteroni v. Midland Bank [1928] 2 K.B. 294 ) or to order ( Re General Estates Co. , 16 W.R. 919), are also negotiable instruments; see further 43 S.J. 435, and as to foreign bonds, Picker v. London & County Bank , 18 Q.B.D. 515 ; SCRIP. See hereon, London & County Bank v. London &

River Plate Bank , 21 Q.B.D. 535 ; Easton v. London Joint Stock Bank , 34 Ch. D. 95 ; Colonial Bank v. Hepworth , 36 Ch. D. 36 ; Sheffield v. London Joint Stock Bank , 13 App. Cas. 333 ; Baker v. Nottingham Bank , 60 L.J.Q.B. 542; London Joint Stock Bank v. Simmons [1892] A.C. 201 ; Venables v. Baring [1892] 3 Ch. 527 ; Bentinck v. London Joint Stock Bank [1893] 2 Ch. 120 . “ Negotiable instrument ” (Common Law Procedure (Ireland) Act 1856 (c. 102), s.90), includes a bank note ( M ’ Donnell v. Murray , 9 Ir. C.L. Rep. 495). See NOT NEGOTIABLE.

Stroud ’ s Legal Dictionary of Words and Phrase , 6 th ed, Vol 2, London: Sweet & Maxwell, 2000. NEGOTIABLE INSTRUMENT “ Wherever we find words which have no accurately fixed meaning, we are bound to give them the ordinary sense; and I am sure it would startle every member of the mercantile community were they to hear that it had been decided that a bank-note was not negotiable instrument. . . It is said that the words ‘ negotiable instrument ’ are to be confined to . . .. bills of exchange . . .

If this narrow mode of construction is adopted, it is absurd; for then a promissory note, which is really ejusdem generis with a bill of exchange, is excluded, ” M ’ Donnell v. Murray (1860), 1 L. T. 498, per Pigot, C.B., at p. 500. “ In the notes of Miller v.

Race [(1758), I Burr. 452] where a11 the authorities are collected, the very learned author [of I Smith, L.C. (12th Edn.), at p. 533] says: ‘ It may therefore be laid down as a safe rule that where an instrument is by the custom of trade transferable, like cash, by delivery, and is also capable of being sued upon by the person holding it pro tempore , then it is entitled to the name of a negotiable instrument , and the property in it passes to a bona fide transferee for value, though the transfer may not have taken place in market overt.

But that if either of the above requisites be wanting, i.e. if it be either not accustomably transferable, or, though it be accustomably transferable, yet, if its nature be such as to render it incapable of being put in suit by the party bolding it pro tempore , it is not a negotiable instrument , nor will delivery of it pass the property of it to a vendee, however bona fide , if the transferor himself have not a good title to it, and the transfer be made out of market overt. ’ Bills of exchange and promissory notes, whether payable to order or to bearer, are by the law merchant negotiable in both senses of the word.

The person who, by a genuine indorsement, or, where it is payable to bearer, by a delivery, becomes holder, may sue in his own name on the contract, and if he is a bona fide holder for value, he has a good title notwithstanding any defect of title in the party (whether indorser or deliverer) from whom he took it. ” Crouch v. Credit Foncier of England Ltd. (1873), L. R. 8 Q. B. 374. per Blackburn, J at pp. 381, 382. Words and Phrases Legally Defined , Volume 3, 2nd. ed., Butterworth ’ s, London 1969.