Rayner v Mizier, 2023 ABKB 521

Court of King’s Bench of Alberta Citation: Rayner v Mizier, 2023 ABKB 521 Date: 20230913 Docket: 1703 17020 Registry: Edmonton Between: Sandra Rayner Plaintiff - and - Colin John Mizier Defendant _______________________________________________________ Reasons for Decision of Applications Judge W.S. Schlosser _______________________________________________________ [1] This is a

summary judgment application. The action is pleaded in debt and unjust enrichment. Cases or Authorities Cited By the Parties Alberta Rules of Court, AR 124/2010, ss. 1.2, 6.11 and 7.3; Hryniak v Mauldin, 2014 SCC 7; Weir-Jones Technical ServicesIncorporated v Purolator Courier Ltd, 2019 ABCA 49; Peter v Beblow, (SCC); Wood v Bevan, 2021 ABQB 981; Stattv SGI Insurance Services Ltd, 2021 ABCA 268; Canadian Consulting Engineers Inc v Brazeau (County), 2021 ABQB 464; Jensen vThermo King Western Inc, 2021 ABQB 593. By the Court Creditor-Debtor Law in Canada, 2nd ed. C.R.B.

Dunlop Carswell (1995); The Canadian Law of Unjust Enrichment and Restitution, 2nd ed. 2022 (McInnes, LexisNexis); Peel (Regional Municipality) v Canada, (SCC), [1992] 3 SCR 762 (para 21), Garland

v Consumers' Gas Co, (SCC), [1998] 3 SCR 112. Discussion [2] Let me begin with what is not in dispute: 1. The plaintiff provided a bank draft in the amount of $200,000 to the defendant personally on January 21, 2013. The funds camefrom the plaintiff’s late husband’s life insurance. 2. The defendant deposited the funds in his personal account. 3. The funds were a loan, not a gift. 4. The loan was to bear interest at 12% per annum, payable on the 21st of each month while the principal remained outstanding. 5. The loan could be prepaid at any time without penalty. 6.

The defendant made 27 interest payments from a proprietorship account belonging to him and three electronic transfers of $1,000(each), between January 21, 2013 and June 21, 2017. 7. There was a short gap in payments between the last cheque in February 2016 and the electronic transfers. The defendant said in aNovember 2016 email that he would be selling his matrimonial home and would be able to start paying back principal. Apart from thethree electronic transfers that followed this email, no further amounts were paid. 8. A demand was issued. 9. The Plaintiff sued. 10.

In response to this application, the defendant tendered a ‘term promissory note’ showing a corporation that he was associated withwas in fact the borrower. [3] The defendant says he does not have to pay the balance because the loan was made to a company that he was involved withas a shareholder, director and controller. The company is now defunct. It appears to have no records beyond some bank statements in thedefendant’s possession. [4] There are two ‘promissory notes’: One is dated December 21, 2013 the other, January 21, 2013.

The loan was advanced onJanuary 21, 2013 by way of a bank draft made payable to the defendant personally. The defendant does not dispute that the draft wasmade to him personally but says this was a mistake. The ‘personal note’ was apparently signed by both plaintiff and defendant, thoughthe plaintiff says that the date is wrong, and the defendant denies that it is his signature. The note indicating that the company was theborrower (the ‘corporate note’) is signed only by the defendant.

Both notes were evidently made on the same computer, probably thedefendant’s, using the same software but there is no evidence of when. [5] There are two expert reports. I am going to assume for the purposes of this application that both experts would be qualified togive opinion evidence about the validity of the signatures. The plaintiff’s expert opines that the signature on the personal note is thedefendant’s signature.

The defendant’s expert opines that it is not; though this is said to be at a ‘third level of certainty’, which isunexplained. [6] The defendant’s evidence is that he prepared the corporate note, signed it and sent it to the plaintiff but never heard back anddid not receive the signed copy from the plaintiff (making it sound like an unaccepted offer). The next thing that happened is that theplaintiff provided a bank draft made out to the defendant personally and he deposited it. [7] The plaintiff says that the defendant prepared the personal note (though the date is wrong).

The plaintiff says that thedefendant signed it and sent it to her. She then signed and advanced the funds. The first she learned of the corporate note was in responseto this application. The Statement of Defence is a general denial and does not refer to the corporate note. Two Experts [8] The defendant’s expert concludes that it is probable that the writer of the signature on the personal note was not the sameperson that signed a limited number of selected documents signed by the defendant from 2013 and the 2021-2022 time frame.

But thisopinion is qualified and limited to an unexplained ‘third level of certainty’. [9] The plaintiff’s expert, using signatures from the personal cheques used to repay the loan, concluded that the signature onthe personal note is probably genuine and probably written by the same person that signed the cheques. [10] If I am to prefer the evidence of one of these experts, I prefer the plaintiff’s expert. The two notes were likely created by thesame computer.

The signatures used as a basis for comparison are from a more suitable range than that chosen by the defendant’s expert.The plaintiff’s expert also concludes that it would have been extremely difficult for the plaintiff convincingly to have forged thedefendant’s signature on the personal note. That is not to say that it couldn’t be done but that it is unlikely that it is a forgery. Theplaintiff’s expert viewed the originals. The defendant’s expert, only copies. [11] It is well to remember that there is no special status to the two notes. They are not being tendered as Bills of Exchange but

only as evidence of the debt, or, more properly, the debtor. Credibility [ 12 ] If the Court were obliged to consider a contractual basis for the claim, the only uncertainty is the borrower, as reflected by the two notes. The main issue is whether or not the corporate note is sufficient evidence of an arguable defence. This, leads squarely into an issue of credibility. This may be something suitable for trial (eg Wood v Bevan ) but not for

summary judgment. [ 13 ] I do not have any difficulty finding that the weight of evidence heavily favours the plaintiff. Even if the corporation was originally intended to be the borrower, the circumstances surrounding the advance and repayment strongly support a novation. I am not persuaded that Mr. Mizier was not intended to be the borrower even if his plan was to use the funds to support a related company. [ 14 ] As things now stand, it is for the defendant to show an arguable defence.

The defendant’s evidence that he should be excused from paying the debt because someone else was the borrower is entirely self-serving. It is either inconsistent with all of the other evidence, or not corroborated. The borrower identified by the defendant is defunct. Even if the defendant had the power to borrow funds on behalf of the corporation there is nothing to back this up: No resolution, no ratification, nothing from the principal of the defunct corporation and so on.

Bank statements from the defendant’s personal account and those of the corporation were furnished by way of an answer to an undertaking at the defendant’s examination on his affidavit. The defendant says that he did not transfer the borrowed amount into the corporate account, as he might have if he were truly an agent for a disclosed principal, because he was afraid that his partner would misappropriate the funds. He says that he made injections into the corporation from time to time as needed. The defendant says that he was reimbursed by the corporation for most of the loan payments.

However, none of the banking documents prove anything other than coincidence and conjecture. [ 15 ] The issue of the two notes goes beyond a determination of whether a defendant has met his burden of showing a reasonable defence in a

summary judgment application. Though the defendant’s evidence is entirely self-serving and circumstantially uncorroborated, the defendant denies he was the borrower and denies signing the personal note. In my view, this cannot be determined summarily using a contractual analysis because the credibility issue is central to determining who was the borrower. Unjust Enrichment [ 16 ] There is another approach. Professor Dunlop tells us (at pages 15,16): ...

What is now clear is that, after the momentus decision of the Court of Exchequer Chamber in Slade’s Case, [1] the writ of assumpsit was extended to cover a series of claims which could in no sense be described as being based on a real contract, express or implied. Because of the nature of assumpsit , it was regarded as necessary to plead these actions as arising out of contract, but the plea was a fiction. The truth was that these various claims, loosely described as quasi-contractual, flowed from obligations imposed by law in the absence of a contract.

It is not desirable here to trace the history of these restitutionary causes of action; this task has been admirably performed by others. [2] After the decision of the Supreme Court of Canada in Deglman v. Guaranty Trust Co. , [3] it is clear that Canadian law is prepared to accept restitution as a separate, if limited, cause of action which need not masquerade as implied or quasi-contract. ... The above discussion indicates that the word “debt” is not today a term of art with a clear, never-changing denotation. ...

One can say that the most common use of the word “debt” is to describe an obligation to pay a sum certain or a sum readily reducible to a certainty.

The obligation may or may not depend on an express or implied contract, depending on the context in which the word is used, but to this writer the essence of the term is that, if there is an obligation to pay a certain or ascertainable sum, the courts should tend not to concern themselves with the precise nature of the cause of action. [ 17 ] If we were compelled to describe this claim in terms of a form of action intended to have been buried in Victorian times by the Common Law Procedure Act (15 & 16 Vict. c 76) and the Judicature Acts of 1873 and 1875, it would probably fall within the second species of assumpsit identified by Professor McInnes (at pages 52,53) as ‘money paid for the defendant’s use’ or, possibly, ‘money had and received’. [ 18 ] The restitutionary claim for unjust enrichment, however, gives us greater flexibility.

It is uncontroverted that the defendant received the funds in the form of a draft payable to him personally. He deposited these funds in his personal account and spent them as he saw fit. He paid interest for a time and after he ceased his relationship with the putative corporate borrower, acknowledged the debt and undertook to start repaying principal. [ 19 ] The plaintiff has made out a strong prima facie restitutionary claim for unjust enrichment. There is plainly a benefit to the defendant, either directly or indirectly. There is a detriment to the plaintiff as she is out the funds.

The question is whether there is a juristic reason for the defendant’s retention of the benefit. ( Peel, at para 21 and Garland, generally). The defendant’s receipt and use of the funds and his personal acknowledgment of the debt, shifts the burden to him to demonstrate a juristic reason why he should not have to pay them back even if the corporation was originally intended to have been the borrower. There is none or at least none proved on the evidence.

Disposition [ 20 ] The application is allowed. Judgment will go for the principal amount plus simple interest at 12% per annum less interest paid to the date of judgment. [ 21 ] Costs should follow the event. Heard on the 18 th day of August, 2023. Dated at the City of Edmonton, Alberta this 13 th day of September, 2023. W.S. Schlosser A.J.C.K.B.A. Appearances: Marie Dussault Oviatt Law for the Plaintiff Ryan Henriques Prowse Chowne LLP for the Defendant