H Ash & Associates Ltd v Banham, 2014 ABQB 718

Court of Queen ’ s Bench of Alberta Citation: H Ash & Associates Ltd v Banham, 2014 ABQB 718 Date: 20141124 Docket: 1401 02424 Registry: Calgary Between: H. Ash & Associates Ltd. Plaintiff - and - Barbara Banham Defendant _______________________________________________________ Memorandum of Decision of J.L. Mason , Master in Chambers _______________________________________________________ Introduction [ 1 ] H. Ash & Associates Inc. is in the business of condominium development and sales. Barbara Banham began providing bookkeeping services to H. Ash & Associates in March, 2006. [ 2 ] Shortly after Ms.

Banham started with the company, she entered into a Purchase and Sale Agreement with H. Ash & Associates for a unit in its condominium development in Cochrane. She funded the purchase with $84,022.45 received from H. Ash & Associates and obtained a mortgage loan for the balance. [ 3 ] By late November 2013, Ms. Banham had stopped actively working for H. Ash & Associates. She listed the unit for sale. In

January, 2014, her services were formally terminated. [ 4 ] H. Ash & Associates sought repayment of the $84,022.45 from Ms. Banham and on January 24, 2014 filed a caveat against the unit. It claimed an interest as an unpaid vendor as follows: …pursuant to a purchase and sale agreement between the caveator as vendor and Barbara Banham as purchaser dated on or about Feb 5 th 2008 subsequently as amended under which there is due and payable the sum of $122,854.96. [ 5 ] The increased balance claimed in the caveat reflects additional amounts alleged to have been improperly obtained by Ms. Banham from H.

Ash & Associates to improve the unit, and for her personal use. [ 6 ] On January 31, 2014, Ms. Banham issued a Notice to Caveator to Take Proceedings on a Caveat. [ 7 ] Ms. Banham sold her unit in February, 2014 and the caveat remains on title. [ 8 ] On March 5, 2014, H. Ash & Associates commenced this action. The claim alleges that the advance of the $84,022.45 was a loan repayable with 5% interest per annum and gives H. Ash & Associates an equitable mortgage, or alternatively a resulting trust in the lands. It further alleges that Ms.

Banham increased the value of the unit through upgrades that she improperly charged to H. Ash & Associates in the amount of $27,725, in regard to which it claims a constructive or resulting trust. In addition, H. Ash & Associates alleges that Ms. Banham paid herself an unauthorized bonus of $3600 and used company funds to purchase personal items totalling $9591.13. Unjust enrichment is also pled and a declaration of a beneficial interest in the unit is sought. [ 9 ] Ms. Banham defends on the basis that the $84,022.45 was a gift and need not be repaid, and denies the improper payments.

She further relies on: 1) the Statute of Frauds ; 2) the parol evidence rule; and (3) the Limitations Act , R.S.A. 2000 c. L-12 in defence of the claim. [ 10 ] Ms. Banham applies to discharge the caveat and to summarily dismiss the claim against her, on the basis of these three grounds. [ 11 ] H. Ash & Associates resists the application and cross-applies for an amendment to its pleadings to include a claim that Ms. Banham made misrepresentations to H.

Ash & Associates in order to induce it to advance her the $84,022.45, and to provide further particulars of the term of the alleged loan and equitable mortgage granted by Ms. Banham. The amendments also allege that Ms. Banham obtained payment for the upgrades, the bonus and the personal items through false pretences and abuse of her position as bookkeeper. The amendments specifically refer to the non-application of the Statute of Frauds or alternatively, the application of an exclusionary

section of that statute. Finally, the amendments seek a declaration that H. Ash & Associates is an unpaid vendor and entitled to assert that interest against the sale proceeds. [ 12 ] For the reasons that follow, the application by H. Ash & Associates to amend its statement of claim is granted. The applications by Ms. Banham to discharge the caveat and for

summary judgment in her favour are dismissed. H. Ash & Associates has established a prima facie interest in the lands. It would not be fair and just in the face of the conflicting evidence and the issues of credibility to summarily determine this action. Gift or loan? [ 13 ] The central issue underlying this dispute is whether the $84,022.45 advanced to Ms. Banham was a gift or a loan. [ 14 ] Equity presumes bargains, not gifts: see for example, Glover v Kumar , 2012 ABQB 516 at paragraphs 41-43 and cases cited. [ 15 ] Ms.

Banham deposes that in 2007, she had recently been discharged from bankruptcy and was emerging from a divorce. She was interested in purchasing the unit from H. Ash & Associates, but could not obtain the financing to pay the list price. [ 16 ] She mentioned this to Howard Ash, principal of H. Ash & Associates. She says that Mr. Ash indicated that a portion of the purchase price could be a gift, which would then qualify her to purchase the unit. She exhibits the September 12, 2006 Purchase and Sale Agreement and states that this is the “only agreement” with respect to her purchase of the unit. Section 3(1)(

C) states that $84,022.45 of the $ 384,022.45 purchase price would be paid to the vendor “:[b]y Vendor gift in Kind (Employee discount and incentive bonus’s[SIC])”. [ 17 ] Ms. Banham also exhibits the May 9, 2008 letter addressed to her mortgage lender and signed by Mr. Ash on behalf of H. Ash & Associates, which states: Please accept this letter as confirmation that I/we am/are providing the sum of $84,022.45 as a non-repayable gift to Barbara Banham.

No part of this gift is being provided by any third party having any interest (direct or indirect) in the sale of the subject property. [ 18 ] She goes on to expressly deny that there are any other agreements or arrangements to treat the gift portion of the purchase price as a debt owed by her.

She says that she has never signed any agreement reflecting the agreement asserted in the caveat, and that the agreement referenced in the caveat is directly contradicted by the only documents she signed regarding the purchase of the unit, namely, the Purchase and Sale Agreement and the gift letter. [ 19 ] Under cross-examination, Ms. Banham recalled that she had more than one discussion with Mr. Ash about the purchase of the unit. She could not recall the contents of the discussions, nor could she speak to Mr. Ash’s reasons as to why the $84,022.45 was being

provided as a gift. Ms. Banham does not recall any discussions about repayment of the money. [ 20 ] Ms. Banham states that Mr. Ash unilaterally requested, years after her purchase of the unit, that she sign a “side agreement” acknowledging her indebtedness, and that she refused. She similarly refused to sign the draft agreement in this regard provided by Ed Schuster, who she describes as the lawyer for H. Ash & Associates. [ 21 ] Mr. Ash tells a different story in his affidavit. [ 22 ] He deposes that Ms. Banham started working for H.

Ash & Associates in March 2006, first as a consultant, and later as an independent contractor. Her duties included attending to banking deposits, bookkeeping, paying the company’s bills and general administrative work. [ 23 ] He says that shortly after Ms. Banham started, she expressed a desire to own one of the condos H. Ash & Associates was developing. She said that she could not afford one of the units or have the necessary credit, but inquired as to whether H. Ash & Associates could help her re-start her life, and if there was any way she could purchase a unit. [ 24 ] Mr.

Ash says he discussed it with his partners and they agreed to advance Ms. Banham $84,022.45 as a loan, secured with an equitable interest in the property. She told them initially that her elderly mother was dying and that once she received her inheritance, she would repay the debt. As this time frame was unknown, an agreement was drafted as a “back up”. He says it was the plaintiff’s intent, as formed by the directors of the company, that the $84,022.45 would be advanced after Ms. Banham agreed to repay the money with interest, no later than when she sold the property. Until repayment occurred, H.

Ash & Associates would maintain an interest in the property. [ 25 ] He says there is absolutely no precedent at H. Ash & Associates of giving gifts of this or any size to its employees, contractors or service providers. He states that he would never give someone who worked for H. Ash & Associates this amount of money under any circumstances as a gift. He has never even given his son or daughter, who works for the company, a gift of this size. [ 26 ] He states that there were a number of discussions with Ms.

Banham about repayment and she acknowledged each time that the $84,022.45 was a debt and had to be repaid to the company. At no time did Ms. Banham indicate that she thought the monies were a gift; all the discussions related to when the monies would be repaid, and on what terms. [ 27 ] Mr. Ash acknowledges signing the Purchase and Sale Agreement and providing the gift letter on behalf of Ms. Banham, but says he never intended that the monies would not be repaid. He states that his intent was to help a person that worked for the company that he found sympathetic and in need of a break.

He deposes that she provided “all sorts of sad stories about her life” and appeared at the time to be a very good, committed employee. The principals of H. Ash & Associates simply wanted to help her acquire a unit and were prepared to state what was required on the documents to assist in getting financing. [ 28 ] He goes on to depose that Ms. Banham agreed to the terms of repayment, reflected in an unsigned agreement prepared by Mr. Schuster, after numerous discussions between Mr. Ash and Ms. Banham. He says that they met with Mr.

Schuster and jointly instructed him that these were the terms of the loan. [ 29 ] Mr. Ash says that Ms. Banham told him she had to take the agreement to her then- husband to sign the release of dower rights, but never did return the signed agreement. She maintained and acknowledged the existence of the debt, however, right up to the commencement of the proceedings. He was concerned that she had not signed it and would periodically ask her when she would start repayment. Each time Ms.

Banham assured him that she would pay out of the monies she was to receive from her mother’s estate, both before and after her mother passed away. After her mother died, Ms. Banham told him she had to wait for probate, then once probate was granted she told him that her brother said it was not a good time to liquidate the assets. Mr. Ash states that there were always promises to pay, and it was always based on an event or a decision in the near future. [ 30 ] He deposes that he never applied any significant pressure on Ms. Banham to repay the loan because: she continued to work for H.

Ash & Associates and he always understood the company had an interest in the property; and given the agreement they had that the loan would not finally become due and payable until she no longer worked for them, or sold the unit. He knew that Ms. Banham did not have the resources to repay the loan until her unit was sold. [ 31 ] Mr. Ash describes two payments by Ms. Banham toward repayment of the $84,022.45. He says that the parties agreed that Ms. Banham’s annual Christmas bonus of $3600 would be applied to the monies owed. H. Ash & Associates would pay Ms.

Banham the bonus of $3600 and then she would turn around and write a cheque back to H. Ash & Associates. [ 32 ] Starting July 31, 2008, the closing date of the transaction, H. Ash & Associates’ electronic accounting records refer to a “promissory note receivable” from Ms. Banham. Two payments of $3600 are credited against this receivable, in 2008 and 2009. Mr. Ash deposes that Ms. Banham was the sole employee who handled all the books, including the electronic accounting records, and that it was she who made all of these electronic entries, using Quickbooks software.

Other items are added to this receivable, representing purchases from various home and garden vendors, bringing the total balance to $93,614.38 as at September 30, 2008. Mr. Ash deposes that when he asked Ms. Banham about these extra items, she said that she recorded the invoices as it was her intention to repay the company. [ 33 ] The plaintiffs’ financial statements for 2008 and 2010 were supplied through an undertaking and make reference to a “Promissory Note Receivable”.

As at October 31, 2008, this receivable was recorded as $93,614, which matches the balance reflected in the Quickbooks records the month prior. Note 5 states that: The Corporation loaned an employee for purchase a residential property [SIC]. The promissory note is non-interest bearing and will be repaid through bonuses and profit sharing. [ 34 ] As at October 31, 2010, this receivable was recorded in the company’s financials as $86, 414, which reflects the payment of the two Christmas bonuses in 2008 and 2009, and matches the December 23, 2009 Quickbooks entry for the balance. Note 8 repeats the

statement from note 5 reproduced above, and goes on to state that “[a]n amount of $3600 was repaid during the year.” [ 35 ] There is a reference in an email from Mr. Ash to Mr. Schuster dated June 11, 2008, before the transaction closed, that “I have also attached the numbers for [Ms. Banham’s] Unit 22. Note we need some documents for this unit that cannot be registered on title, so we need to talk about [SIC]. You will be acting for her as well as us”. Mr. Schuster confirmed under cross-examination that this was a reference to the document Ms. Banham and Mr.

Ash wanted him to create and which he later drafted regarding the loan of the $84,022.45. [ 36 ] Mr. Schuster also provided an affidavit and deposes that he was advised by both parties that the $84,022.45 advance was a loan. He says he was jointly instructed by the parties to prepare an agreement they had reached between themselves as to repayment. This agreement references, among other things, repayment of the loan in part by way of the application of Ms. Banham’s bonus payments to the outstanding balance. Ms. Banham testified under cross-examination that there were no discussions with Mr.

Schuster to repay the money. [ 37 ] While Mr. Ash was quite certain that the loan agreement was provided on July 3, 2008, Mr. Schuster’s evidence is that he did not receive the detailed instructions from the parties until December, 2010. Mr. Schuster testified under cross-examination that he had not seen the gift letter. [ 38 ] There is also a copy of a January 15, 2014 email from Ms. Banham to Mr. Ash responding to his email in which he states he will do whatever is necessary to collect the entirety of the “outstanding loan”. In her response, Ms.

Banham states in part that she has an appointment with her lawyer and that she would not have any final figures until after that. She goes on to state that she is trying to “keep her commitment to you but if this sale does not go through then we will all be losers…”. Ms. Banham says that her reference to the “commitment” relates to her agreement to help find her replacement and has produced some documentary evidence regarding that arrangement. [ 39 ] This review demonstrates that the main issue underlying this litigation is the subject of competing evidence. The genesis of the dispute dates back to 2006. Both Mr.

Ash and Ms. Banham demonstrated weakness in their recall under cross-examination. [ 40 ] Ms. Banham submits, however, that the conflicting evidence and credibility issues do not matter in the circumstances. She asserts that the application of the Statute of Frauds , the parol evidence rule and the Limitations Act dictate that the caveat cannot be maintained and that H. Ash & Associates’ claim is doomed to fail. [ 41 ] Each of these bases will be reviewed in turn, after consideration of the plaintiff’s application to amend its pleadings. Application of H.

Ash & Associates to amend the statement of claim [ 42 ] Where an application for

summary judgment is heard concurrently with a cross-application for permission to amend pleadings, the court must determine the amendment application first before determining the

summary judgment application: Hur v 726913 Alberta Ltd., 2013 ABQB 208 at paragraph 27 , citing Elbow River Marketing Limited Partnership v Canada Clean Fuels Inc ., 2011 ABCA 258 at paragraph 3 . [ 43 ] In the circumstances of this case, I find it is appropriate to hear the amendment application prior to the application to discharge the caveat as well. [ 44 ] Many of the amendments sought serve to particularize and provide further detail of the existing allegations. There are, however, new allegations of substantive fact contained in the proposed amendments relating to misrepresentations by Ms.

Banham. [ 45 ] As referenced, there is evidence from Mr. Ash that Ms. Banham told him prior to receiving the money that she would repay it from her share of her mother’s estate. He also describes her later claims that she would pay after probate, and still later after probate was granted, that her brother advised her that it was not a good time to liquidate estate assets. Mr. Ash maintains that the agreement was that Ms. Banham would pay the money back when she sold the unit at the very latest. [ 46 ] Both Mr. Ash and Mr. Schuster depose to the joint instructions of Mr. Ash and Ms.

Banham in regard to preparing a written loan agreement and her subsequent failure to sign it. [ 47 ] Mr. Ash further deposes that Ms. Banham got H. Ash & Associates to pay for personal items for her unit by presenting them as regular bills in respect of other units, and that in 2010, she wrote herself a bonus cheque for $3600 that he did not authorize. As referenced, there are entries in the Quickbooks records showing the charges for the personal items as additions to the receivable for the $84,022.45. [ 48 ] This evidence from Mr. Ash and Mr. Schuster is sufficient to support the proposed amendments.

I appreciate that Ms. Banham has offered competing evidence on these points, but H. Ash & Associates is not required to prove the allegations at this juncture: see JAV International Ventures Ltd. v. Halliburton Group Canada Inc ., 2008 ABCA 99 at paragraph 56 ; Balm v 3512061 Canada Ltd. , 2003 ABCA 98 at paragraph 13 . I further appreciate that Mr. Ash’s evidence in regard to the unauthorized and unpaid upgrades to the unit did not survive cross-examination and that the plaintiff is no longer pursuing those allegations. However, that does not automatically neutralize Mr.

Ash’s evidence as to the other payments he alleges were improperly made to Ms. Banham by the company while she was its bookkeeper. [ 49 ] Rule 3.65 provides that before or after the close of pleadings, the court may give permission to amend a pleading. Rule 1.2(

a) informs that discretion, in its provision that the rules are intended to be used to identify the real issues in dispute: Hur v 726913 Alberta Ltd. at paragraph 29 . [ 50 ] The “classic rule” according to Balm v 3512061 Canada Ltd. is that a pleading may be amended, no matter how careless or late. As pointed out by Wittmann C.J. in Dow Chemical Canada Inc. v. Nova Chemicals Corp ., 2010 ABQB 524 , this is subject to four

major exceptions: if the amendments cause injustice or prejudice not compensable in costs; if they are hopeless; that a limitation has been missed; or there is an element of bad faith associated with the failure to plead the amendments in the first place. [ 51 ] Ms. Banham resists the amendments on the basis of the third and fourth exceptions. Limitations [ 52 ] Ms. Banham’s counsel submits that the plaintiff’s original claim, filed March 5, 2014, is already dead in the water based on the Limitations Act .

He emphasizes that the Purchase and Sale Agreement was generated in 2006, the advance of the $84,022.45 took place in 2008, the sale closed on July 31, 2008, the unsigned loan agreement is dated July 31, 2008, the alleged improper payments for personal items took place in 2008, the two alleged payments on the loan were made in 2008 and 2009, the Dower Act acknowledgment is dated 2011, and the loan agreement was presented for signature in February, 2011. Counsel further emphasizes that Mr. Ash was readily able to locate records of the alleged unauthorized payments soon after Ms.

Banham was terminated. [ 53 ] Counsel asserts that at the latest, H. Ash & Associates should have commenced the claim for the repayment of the loan when Ms. Banham refused to sign the written loan agreement in 2011 and thus, this claim is out of time. [ 54 ] The evidence from Mr. Ash, however, is not that Ms. Banham refused to sign the agreement, but rather that she put him off by suggesting that she needed her then-husband’s dower consent, all the while acknowledging the money was owing and that she would pay it back. Further, there is evidence from Mr. Ash, also reflected in

part in the disputed unsigned loan agreement, that the parties agreed that the money would be repaid either on Ms. Banham’s cessation of services for H. Ash & Associates, or when she sold the unit. [ 55 ] The parties agree that Ms. Banham stopped providing services to the company in November, 2013 and that the unit was sold in February, 2014. This claim was commenced March 5, 2014, within two years of the earlier of these two events. Further, Mr. Ash’s evidence is that Ms.

Banham continued to acknowledge that the advance was a loan and that she would repay it, as recently as January, 2014. [ 56 ] The limitation for an unpaid vendor’s lien runs from the date the property is sold or when demand for payment is made: see for example, Leacock v. Leacock , 2009 ABQB 525 at paragraph 20 . [ 57 ] Mr. Ash’s evidence is that he trusted Ms. Banham while she was with H. Ash & Associates. He stated under cross- examination that he discovered that the company had paid for items for Ms.

Banham’s personal use after her termination, through a review of the company’s records, including the Quickbooks entries. Again, this is within 2 years of commencement of the action. [ 58 ] Mr. Ash’s affidavit suggests that he became aware of the unauthorized bonus from 2010 not long after Ms. Banham allegedly paid it to herself, but he also states that she acknowledged the need to repay this money. Similarly, the claim for the personal items suggests a discussion took place between Mr. Ash and Ms. Banham about these payments, but the evidence does not indicate when this occurred. Mr.

Ash’s evidence is that she said she planned to repay those funds. Ms. Banham’s affidavit is silent on these payments. Under cross-examination, she testified that the personal items were provided to her by the company as her unit was being used as a show home.

The evidence is not sufficiently clear to determine whether the claims for repayment for the bonus and the personal items are out of time. [ 59 ] Thus, unlike the facts before the Masters in Singh v Kaler , 2009 ABQB 632 and Bjornson v Jolyn Consulting Services Ltd. , 2014 ABQB 187 , the evidence underlying the limitations analysis here is not the subject of uncontroverted evidence. [ 60 ] On this evidence, there are a few possible dates from which the limitations for the recovery of the alleged loan and the alleged improper payments in this case might run.

The facts underlying the limitations analysis are at issue and cannot be determined in the context of this application to amend. [ 61 ] In the circumstances I am not prepared to refuse the amendments on the basis of the Limitations Act . Bad faith [ 62 ] Counsel for Ms. Banham submits that the amendments are in bad faith as they were only proposed after the weaknesses in the claim were pointed out in the defence and this application. Counsel for H. Ash & Associates argues that the claim was hastily drafted, in the face of the looming deadline in the Notice to Caveator to Take Proceedings.

Further research on the causes of action arising from the facts was undertaken, giving rise to the amendments. [ 63 ] In the circumstances, I am not persuaded that there has been bad faith in not making these allegations from the outset. The mere bringing of an application to amend in the face of an application for

summary judgment does not demonstrate bad faith: Hur v. 726913 Alberta Ltd. at paragraph 73 . [ 64 ] I am accordingly allowing the amendments to H. Ash & Associates’ statement of claim in the form exhibited to Mr. Ash’s affidavit. Application to discharge caveat [ 65 ] Ms. Banham applies to discharge the caveat filed by H. Ash & Associates pursuant to

section 141 of the Land Titles Act , R.S.A. 2000, c. L-4. [ 66 ] H. Ash & Associates must establish a prima facie claim to an interest in land: Main v. Jeerh , 2006 ABCA 138 at paragraphs 16-18 . Where the evidence conflicts, it is not a matter of weighing the evidence, but a question of whether the facts, if believed, are sufficient to justify an interest in land: Singh v Kaler at paragraph 12 .

[67] Ms. Banham does not dispute that advancing funds for the purchase of property creates a presumptive resulting trust in theproperty: see for example, Glover v Kumar; Fillion v Fillion, 2011 BCSC 1593 at paragraphs 129-139. Alternatively, the advance atissue here may be characterized as creating an unpaid vendor’s lien or an equitable mortgage: see for example, 1279017 Alberta Ltd. v.1257613 Alberta Ltd., 2009 ABCA 364 at paragraph 15, and cases cited; Leacock v Leacock at paragraphs 6-8; Frado v. Bank ofMontreal (1984), (AB KB), 60 A.R. 102 (Q.B.). [68] Further, the unsigned loan agreement that Mr.

Ash and Mr. Schuster depose to expressly provides that H. Ash & Associatesmay file a caveat. [69] However, Ms. Banham submits that the failure to produce a written memorandum signed by the parties is fatal to H. Ash &Associates’ ability to establish a prima facie claim to an interest in land. Ms. Banham further relies on the parol evidence rule and theLimitations Act as bases which negate H. Ash & Associates’ ability to support the caveat. [70] I will review each of these submissions in turn. Statute of Frauds [71]

Section 4 of the Statute of Frauds provides in part: No action shall be brought…upon any contract for sale of the lands,…or any interest in or concerning them; …unless the agreementupon which such action shall be brought, or some memorandum or note thereof shall be in writing, and signed by the party to be chargedtherewith, or some other person thereunto by him lawfully authorized. [72] The effect of the evidentiary prohibition in

section 4 of the Statute of Frauds is qualified by the common law through the useof the doctrine of part performance and in cases of fraud: Bergman v Bergman, 2002 ABQB 493 at paragraph 21; Singh v Kaler atparagraph 14. Further,

section 8 of the Statute of Frauds provides for an exception in the case of trusts created by law: Bergman vBergman at paragraph 20; Singh v Kaler at paragraph 31. [73] As reviewed above, there is some evidence that is open to the

interpretation that Ms. Banham’s bonus payments for 2008 and2009 were applied to a loan from H. Ash & Associates to Ms. Banham. [74] This stands in contrast to the payment considered by Master Laycock in Singh v Kaler. There, the payment relied on wassimply a bank draft for $10,000 delivered to the closing lawyer without further explanation or comment. Such a payment, without more,does not constitute

an act of part performance. Here, there is evidence of something more. [75] Similarly, the payment under consideration in Main v Jeerh was provided as a deposit for an entirely different proposedtransaction, raising a serious question about whether it could amount to part performance of the disputed agreement. Moreover, it wasundisputed that the cheque was returned. [76] There is also some evidence that at least arguably supports the fraud qualification, in the form of the evidence of therepresentations made by Ms.

Banham to secure the advance described earlier in these reasons and her later deferral of signing the loanagreement. It is undisputed that Ms. Banham could not afford to purchase the unit without the $84,022.45 from H. Ash & Associates andthat she is the one who expressed interest in the purchase. She represented that she was coming into money from her mother’s estate thatshe could use to repay the advance. When Mr. Ash made inquiries, she said that her brother told her it was not a good time to liquidatethe estate. Further, Mr. Ash and Mr.

Schuster indicated that both parties gave instructions to paper the loan agreement. Mr. Ash deposesthat Ms. Banham put off signing the agreement by suggesting she needed the signature of her then-husband on the Dower Act release, allthe while maintaining and acknowledging the existence of the debt. [77] In addition, as distinct from Singh v Kaler, H. Ash & Associates has filed a claim in addition to the caveat. That claimincludes allegations of a resulting trust and an unpaid vendor’s lien. As referenced, accepting the truth of the evidence tendered on behalfof the plaintiffs, monies have been advanced by H.

Ash & Associates for the purchase of property, raising a presumptive resulting trustcaught by

section 8 of the Statute of Frauds. Arguably the

section captures an unpaid vendor’s lien as well. [78] Thus, in this case, it is not a foregone conclusion that the Statute of Frauds will prevent recognition of H. Ash & Associates’claimed interest in land. Parol evidence [79] Ms. Banham asserts that no evidence contrary to the provision of a gift can be considered by the court, given the clearstatement of gift in the Purchase and Sale Agreement. [80] As noted above, paragraph 3.1(

C) provides that the purchase price was payable in part “[b]y Vendor gift in kind (Employeediscount and incentive bonus’s[SIC])”. [81] These words are not in my view an unambiguous description of a gift. While certainly the words “Vendor gift” are used, thefollowing words “incentive bonus’s [SIC]” detract from the words of gift and obscure the meaning of those words.

The reference to abonus arguably suggests something earned by the recipient is being used to comprise the advance, which is inconsistent with a gift. [82] Contextual evidence of surrounding circumstances, disclosing facts known to the parties at the time of the contract was made,is part of the interpretive process: Nexxtep Resources Ltd v Talisman Energy Inc., 2013 ABCA 40 at paragraph 20. [83] As reviewed at the outset of these reasons, there is some evidence of the surrounding circumstances that supports aninterpretation of a loan, rather than a gift.

Alternatively, it could be relied on in support of a finding that the parties did not intend thePurchase and Sale Agreement to constitute the whole agreement, or entered into a collateral agreement regarding the loan of the funds.

[ 84 ] There is also evidence, reviewed above in connection with the exceptions to the Statute of Frauds , which supports allegations that Ms. Banham secured the loan on the basis of misrepresentations. This constitutes a further exception to the parol evidence rule, if necessary to resort to an exception. [ 85 ] Ms. Banham also emphasizes the May 9, 2008 gift letter signed by the parties and provided to her mortgage lender.

That letter states that the $84,022.45 is being provided as a non-repayable gift. [ 86 ] The court is well aware of (but does not condone) the common usage of such gift letters from non-arms’ length parties to assist in the securing of mortgage financing in cases where the purchaser would not otherwise be able to qualify for a mortgage loan. Mr. Ash deposes to these precise circumstances, and deposes that the money was provided as a loan to Ms. Banham. [ 87 ] Ms. Banham’s counsel points out that the Quickbooks entries could have been made by Mr. Ash himself after the dispute arose.

That is not something that can be determined on the existing record. [ 88 ] There is also a glaring absence of any explanation in Ms. Banham’s affidavit as to why the company she had so recently started providing services to would be so generous as to provide her a gift of this magnitude. Under cross-examination, she could not recall any discussion in this regard. [ 89 ] As the evidence reviewed at the outset of these reasons makes plain, whether the provision of the $84,022.45 was a gift or a loan is the subject of competing evidence and requires the assessment of credibility for determination.

That determination is necessary to assess the validity of the caveat. [ 90 ] Ms.

Banham also emphasizes the requirement in paragraph 31 of the Purchase and Sale Agreement that amendments be made in writing, and the entire agreement clause contained in paragraph 33. [ 91 ] Paragraph 33 expressly contemplates written collateral agreements and at least arguably extends only to conditions precedent or warranties: Subject to the provisions of any written collateral agreements, this instrument contains the entire agreement between the parties which is admitted so that they shall be forever estopped from asserting to the contrary that there is any condition precedent or warranty whatsoever to the within Agreement. [ 92 ] In addition, the evidence of Mr.

Ash and Mr. Schuster is that Mr. Ash and Ms. Banham gave Mr. Schuster instructions to prepare a written agreement outlining the terms of the loan, albeit Mr. Schuster’s evidence is that those instructions were not given promptly after the Purchase and Sale Agreement was entered into. There is, however, a contemporaneous reference to a loan agreement in Mr. Ash’s email to Mr. Schuster as described above. Further, there is evidence that while Ms.

Banham instructed the preparation of the written loan agreement and indicated she would sign it, she put off signing it, while continuing to acknowledge the loan, right up to the commencement of these proceedings. [ 93 ] In view of the evidence before me, Ms. Banham cannot rely on the parol evidence rule to defeat H. Ash & Associates’ claim to a caveatable interest at this stage. Limitations Act [ 94 ] As my earlier comments would suggest, the Limitations Act is not determinative of the application to discharge the caveat in the circumstances.

Summary dismissal application [ 95 ] Rule 7.3(1)(

a) provides that a party may apply to the court for

summary judgment in respect all or part of a claim on the ground that there is no “merit” to a claim or part of it. [ 96 ] In Windsor v Canadian Pacific Railway Ltd. , 2014 ABCA 108 , the Court of Appeal held that rule 7.3 calls for a more holistic analysis of whether the claim has “merit”, and is not confined to the test of a “genuine issue for trial” found in the previous rules (paragraph 14). The Court further confirmed the longstanding approach that interlocutory decisions that can resolve a dispute in whole or in part should be made when the record permits a fair and just adjudication (paragraph 15). [ 97 ] A party responding to a

summary judgment application must put its best foot forward, and present evidence to show sufficient “merit” to establish a genuine issue requiring a trial with respect to the outstanding issues ( Windsor , paragraph 21 ). [ 98 ] The court is not to weigh competing evidence or assess credibility in order to summarily determine an action: Access Mortgage Corporation

(2004) Limited v Arres Capital Inc. , 2014 ABCA 280 at paragraph 45 . [ 99 ] In the context of this application, Ms. Banham submits that the claim of H. Ash & Associates has no reasonable prospect of success due to the issues already canvassed regarding the Statute of Frauds , the parol evidence rule and the Limitations Act . [ 100 ] My review of those issues supports the conclusion that H. Ash & Associates has raised sufficient evidence to demonstrate issues of merit requiring trial. [ 101 ] In addition, there is competing evidence from the parties as to H.

Ash & Associates’ claims for repayment for items purchased by Ms. Banham for her own use and the unauthorized bonus. [ 102 ] There are conflicts in the evidence on all the matters at issue and credibility will be an important factor in determination. [ 103 ] Ms. Banham’s application for

summary judgment in her favour is accordingly dismissed.

Conclusion [ 104 ] The amendments are allowed. The applications to discharge the caveat and for

summary judgment are dismissed. [ 105 ] If the parties cannot agree on costs of these applications, they may seek an appointment before me. Heard on the 4 th day of November, 2014. Dated at the City of Calgary, Alberta this 24th day of November, 2014. J.L. Mason M.C.C.Q.B.A. Appearances: Shaun B. Cody New Horizon Law for the Defendant Darryl A. Aarbo Courtney Aarbo Fuldauer LLP for the Plaintiff