Acara Glass v. Aluminum Ltd., 2017 SKPC 76

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2017 SKPC 076 Date: August 31, 2017 File: SC# 632 of 2016 Location: Saskatoon _____________________________________________________________________________ Between: Acara Glass and Aluminum Ltd. - and - 101231250 Saskatchewan Limited Philip Robinson and David Robinson For the Plaintiff Ian Wagner For the Defendant _____________________________________________________________________________ JUDGMENT R.D.

JACKSON , J _____________________________________________________________________________ I Introduction [ 1 ] The plaintiff corporation provided glass and door products to the business of Platinum House and Auto Glass at their request, as per the following:

a) January 26, 2015 - invoice #14865 - $3,038.10;

b) March 23, 2015 - invoice #14965 - $4,840.00;

c) March 23, 2015 - invoice #14963 - $7,333.20 (the final invoice).

[ 2 ] The first two invoices were paid in full as well as a portion of the third, leaving a balance owing of $3,700.00. The defendant maintains that the plaintiff has sued the wrong party and therefore there is no privity of contract nor consideration passing to the defendant from the plaintiff because no contract existed between them. [ 3 ] The plaintiff called witnesses Philip Robinson, President, in chief and his son, David Robinson, in rebuttal. The defendant called one witness, Cornelia Prevost, President and sole shareholder of the defendant company.

II Background [ 4 ] The plaintiff is a commercial glass and aluminum supply company which has operated for the past 29 years in Saskatoon. In this capacity it provided product from time to time to a business known as Platinum House and Auto Glass on 22 nd Street in Saskatoon. [ 5 ] Mr. Robinson testified that he always dealt with “Carlos” whom he assumed was the owner of the business. [ 6 ] The business relationship continued for some years without incident until the current difficulties arose over payment of the final invoice for product delivered March 23, 2015. [ 7 ] With regard to this final invoice, Mr.

Robinson received a call from Carlos, in April 2015 after all product had been provided, requesting that the name on the invoice be changed from “Platinum House and Auto Glass” to “Expert Glass”, everything else remaining the same. [ 8 ] Mr. Robinson thought nothing of this request and resubmitted the invoice (Exhibit P-6) reflecting the name “Expert Glass”. [ 9 ] No payment on any of the three 2015 invoices was forthcoming such that Mr. Robinson had to personally attend at the business premises to collect same:

a) August 17, 2015 (invoice #14865) - $3,038.10;

b) September 29, 2015 (invoice #14965) - $4,840.00

c) November 20, 2015 (invoice #14963) - $3,633.20 of the total $7,333.20; and

d) December 20, 2015 $3,700.00 balance owing on the final invoice. [ 10 ] On January 20, 2016 the plaintiff received notification from its bank that the $3,700.00 cheque had not cleared by reason of “insufficient funds” (Exhibit P-2). [ 11 ] When Mr. Robinson subsequently attended a few days later to the business location, he was informed by Cornelia Prevost that the cheque would not be replaced as it was the debt of Platinum Home and Auto Glass, not Expert Glass, which now operated the business. [ 12 ] Ms.

Prevost testified that she had taken over from her son Carlos who had been incarcerated and was unable to carry on. She stated he had to “go through bankruptcy” which he had related to Mr. Robinson. She did not pay anything for the business assets as there was essentially nothing to purchase. The corporate profile for the numbered company however does not indicate Carlos to have any involvement whatsoever in the company. Rather, Ms. Prevost is shown as the president and sole shareholder of company, which in turn owned the business. Accordingly, although Ms.

Prevost may have taken over managing or running the business from her son, there would have been no sale or disposition required. [ 13 ] Mr. Robinson testified that he recalled Carlos telling him at some point about financial difficulties however, at no time did the

plaintiff ever receive notification of any kind concerning bankruptcy proceedings of the subject business. III Determination [ 14 ] It is clear from the evidence that “Platinum House and Auto Glass” and “Expert Glass” were only trade or business names of the legal entity 101231250 Saskatchewan Limited. This is demonstrated by the following:

a) the defendant company according to the profile report was incorporated May 2, 2013. Mr. Robinson testified he dealt with Platinum Home and Auto Glass, in his recollection, for some years prior to difficulties arising which coincides with the time roughly that the numbered company would have been incorporated and commenced business;

b) Ms. Prevost, in her evidence, stated she “believed” that Platinum House and Auto Glass had been an incorporated entity. No corporate profile was submitted into evidence which would have verified same and no evidence, documentary or otherwise was provided to establish that any incorporated company other than the defendant numbered company actually carried on the business;

c) in April 2015, Carlos requested the name of the business be changed on the final invoice from Platinum House and Auto Glass to Expert Glass i.e. no indication of any change in ownership or structure - just the name of the business;

d) the cheques collected by the plaintiff of August 17, 2015 and September 29, 2015 both show the following on their face: 101231250 SASKATCHEWAN LIMITED PLATINUM HOUSE AND AUTO GLASS The subsequent cheques provided on November 20, 2015 and December 20, 2015 indicate the following: 101231250 SASKATCHEWAN LIMITED EXPERT GLASS As indicated, the only change was to the business name underneath the name of the defendant numbered company, clearly establishing both to be business trade names operated by the defendant company; and

e) the defendant filed a profile report (Exhibit D-2) showing the change in name of the business only to “Expert Glass”, as operated by the defendant numbered company. Bills of Exchange Act [ 15 ] The defendant provided a cheque to the plaintiff on December 20, 2015 in the amount of $3,700.00 for the balance of the outstanding payment on the final invoice. This cheque was subsequently returned by the plaintiff’s bank by reason of “insufficient funds”. [ 16 ] The Bills Exchange Act [1] would therefore apply as the plaintiff would be a holder in due course of a negotiable instrument [2] .

Specific to the within action, the rights and obligations of the plaintiff as holder, and the defendant as maker, must be examined. [17] The Court notes the following sections of the Act to have direct application to the present circumstances: s. 73 The rights and powers of the holder of a bill are as follows:

a) he may sue on the bill in his own name. . . s. 94(1) A bill is dishonoured by non-payment when

a) it is duly presented for payment and payment is refused or cannot be obtained; or

b) presentment is excused and the bill is overdue and unpaid; (2) subject to this Act when a bill is dishonoured by non-payment, an immediate right of recourse against the drawer, acceptor andendorsers accrues to the holder. s. 129 The drawer of a bill by drawing it:

a) engages that on due presentment it shall be accepted and paid according to its tenor, and that if it is dishonoured he willcompensate the holder or any endorser who is compelled to pay it, if the requisite proceedings on dishonour are duly taken . . . s. 134 In the case of a bill that has been dishonoured, the holder may recover from any party liable on the bill . . . [18] In Abegweit Seafoods Inc. v Lady Lobster Inc.[3], the Court stated at para 8: Having presented the cheque for payment and it having been dishonoured, the plaintiff can now sue the defendant on the cheque andneed merely plead the cheque and its dishonour.

The plaintiff has the benefit of the presumption that it was a holder in due course. Inthose circumstances the defendant has the obligation of proving that the plaintiff has no title to the cheque at all, or that the issue orpresentation of the cheque is affected by fraud, duress or illegality.

Further, in CBC v Isport Media[4] the Court stated at para 5: When a bill is dishonoured by non-payment, an immediate right of recourse against the drawer, acceptor and endorsers accrues to the holder.[5] [19] In Wally’s Second-hand Store Ltd v Kozak[6] a father provided his own cheque to a pressing creditor on behalf of his son andthen subsequently claimed he acted out of fear and confusion. In holding him liable, the Court stated: The defendant was obviously attempting to assist his son who had issued the cheques when there was insufficient funds in the CreditUnion to cover them.

It was open to the plaintiff to institute proceedings against the defendant’s son, certainly civil proceedings andpossibly criminal. Obtaining the son’s cheques from the plaintiff by the issue of his own put an end to the possibility of either andamounted to good and valuable consideration. Cities Service Oil Company v Rubel (1931) (ON CA), 2 DLR 183;McMurchy v Harper (1937) (AB CA), 2 DLR 774.

[20] As noted in Abegweit, supra, the drawer of a cheque has the ability to deny that the holder has good title to the cheque by reason of fraud, duress or illegality.[7] In her evidence, Ms. Prevost testified that she only provided the subject cheque because she waspressured to do so by David Robinson who attended in person on December 20 to collect same.

She stated that to avoid creating a scenein front of a customer present at the time, she found it expedient to simply provide him the cheque. [21] However, the evidence before the Court simply falls short of establishing any duress, undue influence or pressure placed uponMs. Prevost as testified to. Mr. Philip Robinson stated unequivocally that he, and he alone, attended on all four occasions, August 17,September 29, November 20 and December 20, to personally obtain payment. Mr.

David Robinson in his evidence corroborated that atno time, and specifically on December 20, did he ever attend personally to collect any payment. Finally, Ms. Prevost acknowledged thatafter the alleged duress or pressure to pay, she did not take any steps to have the cheque stopped and that she only advised the plaintiffafter the cheque was dishonoured for payment that it would not be replaced. IV Conclusion [22] For all the foregoing reasons, the defendant, as the sole legal entity, remains liable on the outstanding debt to the plaintiff,irrespective of the change in its operating name.

Accordingly, the plaintiff shall have judgment against the defendant in the amount of$3,700.00 plus pre-judgment interest from February 1, 2016, $37.00 issue costs and $20.00 service fees. _________________________ R.D. Jackson, J [1] RSC, 1985, c.B-4 [2] Holder in due course is defined in s. 55(1) as . . . a holder who has taken a bill, complete and regular on the face of it, underthe following conditions, namely,

a) that he became the holder of it before it was overdue. . . and

b) that he took the bill in good faith and for value and that at the time the bill was negotiated to him he had no notice of any defect in thetitle of the person who negotiated it. [3] [1995] PEI J No 140 [4] 2014 ONSC 1905 [5] See also: Iraco Ltd et al v Staiman Steel Ltd, (1986), (ON SC), 54 OR (2d) 488 OJ No 242 [6] [1976] WWD 100 [7] These principles are also codified in ss. 55(2) - 57 of the Bills of Exchange Act