Counsel Tech Accounting and Tax Services Inc v Green, 2018 ABQB 1054

Court of Queen’s Bench of Alberta Citation: Counsel Tech Accounting and Tax Services Inc v Green, 2018 ABQB 1054 Date: 20181221 Docket: 0910 00960 Registry: Lethbridge Between: Counsel Tech Accounting and Tax Services Inc. Plaintiff - and - Gordon Richard Green and Gladys Fern Green Defendants _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice J.H.

Langston _______________________________________________________ [ 1 ] This is an action seeking enforcement of a demand mortgage which secured a debt owing by Carol Edwards (“Edwards”) and Brenda Grosenick (“Grosenick”), for money lent and services provided by the plaintiff. The land subject to the mortgage was owned by Gordon and Gladys Green, the parents of Carol Edwards. The Greens are now deceased, and the land has passed to others who are named as defendants. Those defendants have taken no

part in this action. Edwards and Grosenick dispute that anything is owing to the plaintiff. [ 2 ] The plaintiff is owned by Debbie Ramage (“Ramage”) who is an accountant. The mortgage was registered on April 14, 2003. [ 3 ] The mortgage and related documents were prepared and then forwarded to Christopher Warren, an experienced lawyer who provided independent legal advice and who had acted for the Greens on other occasions. I am satisfied that Mr.

Warren followed his usual practice when dealing with the Greens and I am satisfied that the Greens understood the nature of the documents which they signed, and that they had the necessary capacity to do so. [ 4 ] Ramage has been operating a bookkeeping and accounting business for more than 20 years. Her firm, the plaintiff, does bookkeeping, tax returns, and estate planning. Since 1994 she has worked for Edwards and Grosenick, who are the owners of Edwards

and Holloway Therapeutic Massage Centre LTD (“E&H”), a massage clinic and school. The relationship ended in January of 2005. During the time of good relations Ramage provided services to E&H and regularly forwarded invoices for payment. Sometimes the invoices were delayed to coincide with E&H’s cash flow. Ramage testified that E&H always paid on time.

In 1998 and 1999, because their bank turned down loan requests, Ramage made small loans to E&H which were repaid. [ 5 ] Ramage had previously met Gordon and Gladys Green and she knew they were the parents of Carol Edwards. [ 6 ] This early history of successful financial dealings led to larger amounts being advanced by the plaintiff. To secure these loans, Carol Edward’s parents, Gordon and Gladys Green, provided a mortgage and a guarantee, in the sum of $70,000.00. E&H also provided a promissory note in similar terms. Unfortunately, things did not go well and by January of 2005 E&H was in arrears.

On August 8, 2009 Gordon and Gladys Green were served with a notice to realize on security pursuant to the mortgage. Ramage testified that as of June 30, 2009 the balance owning, inclusive of interest charges, was $70,292.48. By January 22, 2015 the outstanding balance, inclusive of interest, was $132,822.23. Ramage also made a demand for payment on the promissory notes on June 29, 2005. [ 7 ] An associated publishing company was created by the principals of E&H. Ramage did work for this company. However, E&H was invoiced for the work and payment was made accordingly.

This was because the new company had no revenue. [ 8 ] Ramage’s evidence is that by the end of 2004 she had worked for E&H for more than ten years, without any complaint being registered about the quality of work or the fees charged. After December of 2004 she performed no further services for E&H and no further loans were made. [ 9 ] The loan activity between May 24, 2002 and December 19, 2003 is the focus of this application. [ 10 ] The evidence establishes that $290,000.00 was advanced during this period. As security for these loans, the plaintiff had secured, in 2002, a $110,000.00 mortgage from the Greens.

The $70,000.00 mortgage, which is the subject matter of this action, was in addition to the prior mortgage of 2002. [ 11 ] By October 9, 2003 $160,000.00 was the balance owing on the loans. Edwards and Grosenick acknowledge this amount. In the fall of 2004 Edwards and Grosenick paid $150,000.00 towards the outstanding balance. Ramage testified that she met with Edwards and Grosenick, and they agreed on the method of applying this money to the outstanding balance.

Ramage says they agreed firstly to pay outstanding professional fees, then accrued interest, and then the remainder would be applied to the principle amount owing. This, according to Ramage, had been the practice in the past when payments were made. After applying the payments, a balance of $41,736.45 remained. As the result of these transactions Ramage then had the plaintiff discharge the $110,000.00 first mortgage. Ramage calculated that as of June 30, 2005 the amount owing on the loan account was $37,221.79.

A demand letter was sent to E&H on June 29, 2005. [ 12 ] In July of 2005 Edwards and Grosenick complained to Ramage’s professional association, alleging incompetence on the part of Ramage and asserting that they did not owe any money. In all there were 250 allegations made against Ramage. This was followed by a Statement of Claim filed on January 9, 2007 alleging similar complaints.

The complaints to the association were dismissed and the Statement of Claim has languished since its filing. [ 13 ] Ramage asserts that the current balance owing as of May 6, 2018 is $168,000.00 inclusive of interest. [ 14 ] Edwards and Grosenick deny that any money is owed. Each testified during this trial and each provided evidence to support their position. However, that evidence can best be described as elusive. They were unclear in their recollection of events despite being confronted with documents that clearly showed that Ramage had kept them in the picture in relation to their financial status.

The picture that unfolds is that neither of these witnesses are astute business people nor are they reliable historians. In her evidence, Grosenick testified that neither she nor Edwards ever asked Ramage for money. She went further in her testimony to assert that they were under duress to borrow money from Ramage. [ 15 ] Ramage is an experienced accountant who is familiar with financial matters. It was she who kept the books for E&H. It is she who extended a degree of latitude with respect to the payment for which she had rendered services.

And it is she who, for no ulterior motive, provided money to Edwards and Grosenick when all other avenues of borrowing had dried up. Ramage’s dealings with Edwards and Grosenick has been clearly documented and clearly detailed. The evidence of Edwards and Grosenick is unreliable and where there is conflict, I prefer the evidence of Ramage. [ 16 ] I am satisfied on the evidence before me that by July of 2005 E&H was indebted to the plaintiff in the amount of $37,221.79. A demand was made on the mortgage in August of 2009.

Action to enforce the terms of the mortgage was commenced in September of 2009. [ 17 ] In my view the plaintiff is entitled to a declaration of the debt owing under the mortgage, that being $168,000.00 as at May 6, 2018, plus per diem interest thereafter at the rate of $30.68. Costs are appropriate and they will be on a solicitor and own client basis.

There will be a one day redemption period for the new owners of the land to pay the debt and costs owing under the mortgage, failing which the lands shall thereafter be listed for sale with a licenced realtor of the plaintiff’s choosing, for 90 days, at $490,000.00, being the appraised market value of the lands as determined by the valuation tendered as an exhibit in these proceedings. Heard on the 16 th day of April, 2018. Dated at the City of Lethbridge, Alberta this 21 st day of December, 2018.

J.H. Langston J.C.Q.B.A. Appearances: Stuart J. Weatherill - Emery Jamieson LLP for the Plaintiff John Anderson – Mainwood Legal Services for the Defendants