Landale Signs & Neon Ltd v Grenier, 2018 ABQB 958

Court of Queen’s Bench of Alberta Citation: Landale Signs & Neon Ltd v Grenier, 2018 ABQB 958 Date: 20181122 Docket: 1703 05788 Registry: Edmonton Between: Landale Signs & Neon Ltd. Applicant - and - Christian Grenier Respondent _______________________________________________________ Reasons for Decision of W.S. Schlosser , Master, Court of Queen's Bench of Alberta _______________________________________________________ [ 1 ] This is the Plaintiff’s Rule 3.37 Application for Judgment after the Defendant has been noted in default. It is opposed by the Defendant. List of Authorities By the Plaintiff

1. Bankruptcy and Insolvency Act, RSC 1985 c B-3; 2. Rizzo & Rizzo Shoes Ltd Re, (SCC), [1998] 1 SCR 27, 1998 CarswellOnt 1; 3. Petryna v Petryna, [2008] WDFL 4896, 2008 CarswellOnt 5055; 4. Thiessen v Antifaev, 2003 BCSC 197, 2003 CarswellBC 492; 5. Anderson, Smyth & Kelly Customs Brokers Ltd v World Wide Customs Brokers Ltd, 1996 ABCA 169, 1996 CarswellAlta395; 6. Rainbow Industrial Caterers Ltd v Canadian National Railway, (SCC), 1991 SCC 27, 1991 CarswellBC214; 7. Hogarth v Rocky Mountain Slate Inc, 2013 ABCA 57, 2013 CarswellAlta 189; 8. Alberta Rules of Court, AR 124/2010; 9.

Toerper v Hoard, 2011 ABQB 85, 2011 CarswellAlta 194; 10. MCAP Service Corp v Chiang, 2011 ABQB 477, 2011 CarswellAlta 1286; 11. Judgment Interest Regulation, AR 215/2011; and 12. Judgment Interest Act, RSA 2000, c J-1. By the Defendant 1. Argent v Gray, 2015 ABQB 292; 2. Jones v Temple Real Estate Investment Trust, 2018 ABQB 606; 3. Fenske v Schneider, 2007 ABQB 164; 4. Queen v Cognos Inc, (SCC), 1993 CarswellOnt 801; 5. Alberta v Cox, 2017 ABCA 5; and 6. TLA Food Services Ltd v 1144707 Alberta Ltd, 2011 ABQB 550. [2] Rule 3.37(3) tells us of that the Court may do one of the following: ... (

a) pronounce judgment; (

b) make any necessary order; (

c) direct a determination of damages; (

d) adjourn the application and order additional evidence to be provided; (

e) dismiss the claim or a part of it; (

f) direct that the claim proceed to trial and that notice be served on every other defendant; (

g) make a costs award in favour of the plaintiff. [3] Strekaf, J (now JA) reviewed the law in Toerper v Hoard, 2011 ABQB 85, saying: [2] Rule 3.37 of the new Rules of Court provides for an application to the court for judgment where a defendant has been noted indefault or where the defendant’s Statement of Defence is struck out. [3] The purpose of an assessment of damages is to determine the quantum of damages, rather than the liability for damages,provided that the facts deemed to have been admitted establish the cause of action.

A defendant who is noted in default is deemed tohave admitted the allegations of fact contained in the Statement of Claim. [4] This issue was addressed in the context of the predecessor provision to Rule 3.37 in the old Rules of Court in Robinson v. FiestaHotel Group Resorts, 2008 ABQB 311, 450 A.R. 167 (Alta. Q.B. [In Chambers], where Yamauchi J. stated at paragraphs 10 - 12: [10] The strongest statement on the effect of the Defendants’ failure to file a statement of defence was made by the Supreme Court ofCanada in McElroy v.

Cowper-Smith, (SCC), [1967] S.C.R. 425 at 428, where Spence J., considered the reasoning inSulef v. Parkin (1966), (AB CA), 57 W.W.R. (N.S.) 236 (Alta. C.A.), and said: . . . in the province of Alberta upon default in defence the defendant is to be taken to have admitted the facts set out in the statement of

claim. This is a decision of the highest court in Alberta on a point of practice in the province, and this court will not interfere under suchcircumstances. Therefore, the Defendant, as plaintiffs at trial, were not required to prove publication of the alleged libel. [11] Although Spence, J., was writing in dissent, many Alberta cases since that time have held that the effect of a noting in default isthat the defendant has admitted the facts alleged in the statement of claim by the failure to deny them, see e.g. Klinck v. Drinnan, [1985]A.J. No. 576; (AB KB), 66 A.R. 321 (Q.B.), Dykes v. Goczan, [1996] A.J.

No. 432; (AB KB),188 A.R. 352 (Q.B.) (“Dykes”); Syncrude Canada Ltd. v. Tibo Steel Products Ltd. et al., 2001 ABQB 478 , [2001] A. J. No.736; 292 A.R. 368; 2001 ABQB 478; Dyck et al v. Wilkinson et al., [2004] A.R. Uned. 657; 2004 ABQB 731 , [2004] A.J. No.1155; 2004 ABQB 731. More relevant to the case with which this Court is dealing is a statement by Harvey, C.J.A. in Brennan v.Arcadia Coal Co. (1929), (AB CA), 24 Alta.

L.R. 236 (C.A.), at 448 (“Brennan”), where he said: The amount of damages to which the plaintiff was entitled could only be ascertained by an assessment but the evidence to be taken onsuch assessment would only be for the purpose of ascertaining the amount of, and in no sense the liability for, such damages which latterhas been established by the facts alleged, and admitted by the Defendant by reason of its failure to deny them. [12] The mere noting in default, however, does not end the matter. In Dykes at para. 6, Binder J., based on Spiller v. Brown, 1973ALTASCAD 76 , [1973] 6 W.W.R. 663 (Alta.

C.A.) (“Spiller”), said that there is an exception to the rule that the Defendanthas admitted the facts alleged in the statement of claim by failure to deny them “where the Court is not satisfied that the Plaintiff has acause of action, the Court has a duty to direct a hearing to determine the matter.” This Court has reviewed the pleadings filed in thismatter and has heard the testimony of Robinson and concludes that the Plaintiffs have a cause of action against the Defendants. [4] The Statement of Claim alleges the following facts (amongst others): 10.

A new employment contract was signed by Grenier and Landale on February 23, 2016. ... 12. By January 1, 2016, it was mutually agreed between Grenier and Landale that because he had failed to meet his sales quota to thisdate, that he would be paid strictly on commissions earned from sales that were completed and invoiced, and that he would no longer beearning a wage drawn against his commissions. 13. During at least six pay periods after the pay period ending November 28, 2016, Grenier submitted invoices for payment on jobsthat he had already been paid for.

Specifically: 1) Invoice# 200773 claimed and paid 11/28/15 and 12/12/15. 2) Invoice# 200785 claimed and paid 11/28/15 and 01/29/16. 3) Invoice # 2007 86 claimed and paid 11 /28/ 15 and 12/12/15. 4) Invoice# 200787 claimed and paid 11/28/15 and 01/01/16. 5) Invoice# 200789 claimed and paid 11/28115 and 12/12/15. 6) Invoice# 200773 claimed and paid 11/28115 and 12/12/15. 7) Invoice# 200791 claimed and paid 11/28/15 and 01/01/16. 8) Invoice# 200795 claimed and paid 11/28/15 and 01/29/16. 9) Invoice# 200796 claimed and paid 11/28/15 and 12/12/15. 10) Invoice # 200797 claimed and paid 11/28/15 and 12/ 12/15. 11) Invoice # 200800 claimed and paid 11/28/15 and 01/01/16. 12) Invoice# 200863 claimed and paid 11/28/15 and 12112/15. 13) Invoice# 200118 claimed and paid 11/28/15 and 01/15/16. 14) Invoice# 200331 claimed and paid 12/12/15 and 01/29/16. 15) Invoice# 200714 claimed and paid 12/12/15 and 03/11/16. 16) Invoice# 200807 claimed and paid 11/28/15 and 12/12/15. 17) Invoice# 220077 claimed and paid 11/28/15 and 02/12/16. 18) Invoice# 220311 claimed and paid 01/29/16 and 02/12/16. 14.

From January 1, 2016, until he resigned his position on June 10, 2016, Grenier continued to collect a wage, notwithstanding theagreement that from January 1, 2016 onwards, he was to be paid on a straight commission basis. 15. Grenier continued to pay this wage to Grenier in error.

16. Landale overpaid Grenier $16,274.72 in unearned wages and double-billed commissions. [ 5 ] Mr. Grenier attempted to open up the default to plead to plead that he was an undischarged bankrupt, and to invoke the Bankruptcy and Insolvency Act stay. This application was refused. Mr. Grenier assigned into bankruptcy in March 2011. After failing to complete his duties under the Act , his application for a discharge was adjourned indefinitely. Not only is this a post-bankruptcy debt, the trustee was discharged in July 2017.

Section 69.3(1.1) of the Bankruptcy and Insolvency Act provides: (1.1) Subsection (1) [the Stay] ceases to apply in respect of a creditor on the day on which the trustee is discharged. The trustee’s discharge restored the creditor’s rights in and of itself. On this point I adopt the reasoning of Petryna , per Kane, J (at paras 7-11) and Thiessen , per Hood, J, (at paras 69-72 ). The timing of the debt, the discharge of the Trustee, the wording of the Act and the decided cases all make the defence that Mr.

Grenier was attempting to raise a non-defence. [ 6 ] The Plaintiff and the Defendant both filed affidavits for this application. Both attach copies of the February 23, 2016 employment agreement. The February 23, 2016 contract (paragraph 10), conflicts with the January 1 st ‘mutual agreement’ referred to in paragraph 12. [ 7 ] This case turns on the Plaintiff’s own evidence. [ 8 ] The February 23, 2016 agreement says: Remuneration You will be paid out as outlined in “Schedule B” attached hereto.

Schedule B provides in part: A. Annual compensation: $55,000.00 per year (bi-weekly advance), which is inclusive of vacation pay. The employee is responsible for auto and phone expense. B. Draw: Account Managers will be given a bi-weekly advance based on 10% of annual quota. This advance on commission will be off-set by paid commissions which will be calculated as described in C. below. When paid commissions have reached $10,000.00 above the annual quota (including claw backs) any commission above the bi-weekly amount will be paid out to the Account Manager.

The paid commissions bank will not exceed, $30,000.00 and any amount above will automatically be paid out as commissions. If the bank drops below $10,000.00 the Company reserves the right to address a reduction in the bi-weekly draw. C. Commission: The Account Manager will be responsible for a set quota of sales per year. Your annual quota is $550,000.00. Commission will be paid on sales brought to the Company which exceed the annual quota. ... (emphasis added) [ 9 ] Paragraph 6E of the Plaintiff’s affidavit says: E.

On March 24, 2017Landale filed a Statement of Claim against Grenier for an amount of $16,274.72, which was the honest but mistaken believed [sic] quantum of monies owed for unearned wages and double billed commissions claimed by Grenier. So, to begin, the admitted amount is evidentially the wrong amount. [ 10 ] 6B of the Plaintiff’s affidavit says: B. Grenier claimed from Landale and was paid unearned wages and double-billed commissions amounting to a total of $23,019.02. i. The unearned wages collected by Grenier between March 11, 2016 and June 03, 2016 amounted to $13,638.88.

Grenier collected those wages despite an employment agreement dated February 23, 2016 that stated he was to be paid on a strictly commission based basis going forwards. The aforementioned wages were paid to him by Landale in error by a bookkeeper that has since left the company. ii. The double billed commissions submitted by Grenier and paid by Landale on at least six (6) pay period ending on November 28, 205 amounted to $9380.14. iii. Grenier failed to make Landale aware of the wage and double billed commission payment discrepancies during his employment.

When the discrepancies were discovered and brought to his attention, he tenders his resignation soon afterward. This paragraph tells us that the Plaintiff wants more than what was claimed in the Statement of Claim and admitted by the default of a defence. It also misstates the February 23, 2016 employment contract. [ 11 ] The February 23, 2016 ‘new employment agreement’ does not say that the Defendant was not entitled to a bi-weekly advance or a wage drawn against commissions. It does not set the basis, or mechanism for commission calculation and payment (other than $550,000 base).

We do not know if there was still a quota as a result of the Jan 1 ‘mutual agreement’ or whether commission was payable on all sales. [ 12 ] My rough math tells me that $23,019.02 is less than five months ten days employment earnings at $55,000 per year. (161/365 x 55,000 (Jan 1 – June 10) = $24,260.27). Even the enhanced claim may well be less than what was owing to the Defendant under the

February 23, 2016 agreement, especially if my ambiguity or uncertainty is interpreted against the employer, who drafted the February 23 employment agreement. [ 13 ] This is not a case of having to weigh evidence to decide between two competing versions of events. The Plaintiff’s own evidence does not demonstrate that the Defendant was overpaid. [ 14 ] In my view, I do not require a formal cross-application or the assistance of the principle in cases such as Pyrrha Design , 2016 ABCA 12 (at para 17 ). Rule 3.31(3)(

B) permits me to dismiss the case. This is a very unusual situation when the Plaintiff’s own evidence conflicts with the formal admissions gained from the default and ultimately defeats their own claim. [ 15 ] The Action is dismissed with costs to the Defendant on Column One. I am not inclined to reduce the costs pursuant to Rule 10.42 as the Defendant did not choose this forum. I appreciate that the Defendant was self-represented for a time and the costs issue may not be entirely straight-forward. The parties may apply for directions if they cannot agree. Heard on the 5 th day of November, 2018.

Dated at the City of Edmonton, Alberta this 22 nd day of November, 2018 . W.S. Schlosser M.C.Q.B.A. Appearances: Terence B. Arthur Kuzyk & Mol Law Office for the Applicant Navdeep Virk Virk Law for the Respondent