Prager v. Canada Homes 4 Rent.com Inc., 2013 ABQB 3

Court of Queen ’ s Bench of Alberta Citation: Prager v. Canada Homes 4 Rent.com Inc., 2013 ABQB 3 Date: 20130102 Docket: 1201 05243 Registry: Calgary Between: Scott Prager Applicant - and - Canada Homes 4 Rent.com Inc., Ruby Jeaurond and Guy Jeaurond Respondents _______________________________________________________ Memorandum of Judgment of the Honourable Madam Justice C. A. Kent _______________________________________________________ [ 1 ] Scott Prager brought an action by way of Originating Application for a declaration that he was a 10% shareholder in the Respondent Canada Homes 4 Rent.com Inc.

Ruby and Guy Jeaurond are the principals of Homes 4 Rent. Prager's application is based on a document which I will refer to as Exhibit A. Three quarters of the document are a list of items that look like an agenda. It is the third page of a document prepared by Ms. Jeaurond. On the bottom, handwritten is the following: Effective Jan 30, 2004 Scott Prager receives 10% of Canada Homes 4 Rent.com Inc. through shares in consideration for services rendered to date. Effective Feb 1, Scott Prager's base monthly fee for programming services increases to $2500.00 monthly.

[ 2 ] There are two signatures below this handwriting, one "Ruby Jeaurond Jan 30, 2004" and the other "Scott Prager 2004/1/30". [ 3 ] Mr. Prager's submission is simple. He says that that writing is the product of a meeting that he had with Ms. Jeaurond at a restaurant in Airdrie. The handwriting constitutes an agreement for 10% of the shares in the company. He has never received the shares. He notes that he began receiving the monthly fee of $2500.00 in accordance with the note. [ 4 ] Ms. Jeaurond swore an affidavit in response to Mr. Prager's application.

She says that she does not recall any hand-writing or signatures on the document. She also does not recall any discussion with Mr. Prager on that date or whether he was in Alberta. However, she subsequently produced a receipt for a meal at a restaurant where Mr. Prager says that the agreement was made and recorded as indicated above. [ 5 ] This action proceeded through questioning on the affidavits and was set down before me for argument on December 17, 2012.

On December 10, 2012, new counsel for the Respondents in the Prager action filed a Statement of Claim against Prager and others. [ 6 ] Rule 3.2 sets out how an action is to be commenced. Subrule 2 provides that an action must be started by statement of claim unless one of several conditions is met. Unlike the former rule, there is no provision in 3.2(2) permitting an action be commenced by Originating Notice of Motion if the claim is based on a written instrument where there are no material facts in dispute (Rule 410(e)). However, Mr.

Prager argues that this application falls within the current rule because the action is really an oppression action brought under s. 242 of the Business Corporations Act RSA 2000 B-9. Furthermore, until the Statement of Claim was issued, there were really no facts in disputes: Mr. Prager swore positively about the facts and Ms. Jeaurond could not remember. [ 7 ] The Statement of Claim is lengthy and deals with four distinct issues.

The first deals with Prager's actions in relation to the Homes 4 Rent business, the second deals with actions by the Wandlers, the third deals with other actions of the defendants and the fourth deals with the application brought by Mr. Prager claiming 10% of the shares. The fourth

section reads like a defence to the originating application rather than a claim. It alleges that Exhibit A is a forgery, either because Ms. Jeaurond's signature is a forgery or the words inserted in handwriting and quoted above were inserted after Ms. Jeaurond signed. It also says that the alleged agreement lacks consideration since the only stated consideration is past consideration. Finally it alleges that the claim is barred by the Limitations Act , RSA 2000, L-12 or by laches or because it is inequitable to grant the relief claimed. [ 8 ] The claim by Mr.

Prager that there was an agreement to give him shares as evidenced by Exhibit A is discrete from the other claims on the Statement of Claim. It is tempting to order a trial about whether there was such an agreement, particularly in light of the positions taken by the parties prior to the date the Statement of Claim was filed. Mr. Prager swears to a set of facts; Ms. Jeaurond says she cannot remember. [ 9 ] As tempting as it is, there are now two other components to the shareholder issue: the question of past consideration and the limitations claim. Given these issues, I decline to grant Mr.

Prager the relief he seeks. However, I do so with three comments. [ 10 ] First, I make no comment on the continued appropriateness of Mr. Prager’s originating application. It may have been appropriate at the time, but now the operative document is the Statement of Claim. Second, the decision does not preclude Mr. Prager from seeking other

summary relief in the future but taking into account the past consideration and the limitation issues. Third, although the respondents in this application have been successful, some costs will be awarded to Mr. Prager. Mr. Prager commenced his application and the first response was simple. The response invited this application. Mr. Prager will have thrown away costs up to and including December 10, 2012. Heard on the 17 th day of December, 2012. Dated at the City of Calgary, Alberta this 2 nd day of January, 2013.

C.A. Kent J.C.Q.B.A. Appearances: Jeff W. Moroz Mcleod & Company LLP for the Applicant J. Kelly Hannan Burnett Duckworth & Palmer for the Respondents