Traffic Tech Inc. v. Polycorp Inc., 2023 NSSM 58

SMALL CLAIMS COURT OF NOVA SCOTIA Citation: Traffic Tech Inc. v. Polycorp Inc. , 2023 NSSM 58 Date: 202306 27 Docket: 522245 Registry: Halifax Between: Traffic Tech Inc. Claimant - and - Polycorp Properties Inc. & Polycorp LLV Inc. Defendants DECISION Adjudicator : Eric K. Slone Heard : Via zoom on in Halifax, Nova Scotia on June 21, 2023 Appearances : For the Claimant, Stephanie Sebag, counsel For the Defendants, Peter Polley

By the Court: [ 1 ] The Claimant is a Montreal-area-based company that provides trucking services. The Defendants are Nova Scotia-based companies in the building construction and development business.

They are both under the control of Peter Polley. 1 [ 2 ] The Claimant is suing to recover payment of $8,898.13 for trucking services on behalf of the Defendants. [ 3 ] The Defendants do not deny that the service was rendered but argue that the Claimant took too long to assert a claim, and is therefore defeated by the Limitation of Actions Act , which in s.8 sets a two-year limitation for most civil claims including actions of this type. [ 4 ] The Claimant admits that it took more than two years to sue but seeks to take advantage of the provision in the Act that re- starts the limitation period where there is an acknowledgment of liability for the debt.

This is found in s.20 which I reproduce in full, as some reflection of the amount of attention that was given to many different situations where an acknowledgement might operate: Acknowledgments 20

(1) Where, before the expiry of the relevant limitation period established by this Act, a person acknowledges liability in respect of a claim for (

a) payment of a liquidated sum; (

b) the recovery of personal property; (

c) the enforcement of a charge on personal property; or (

d) relief from enforcement of a charge on personal property, the limitation period begins again at the time of the acknowledgment. 1 It is unclear to me why both companies were named, because only Polycorp Properties Inc. appears to have been involved. However, it does not really matter under the circumstances.

(2) An acknowledgment of liability in respect of a claim for interest is an acknowledgment of liability in respect of a claim for the principal and for interest falling due after the acknowledgment is made.

(3) An acknowledgment of liability in respect of a claim to realize on or redeem collateral under a security agreement or to recover money in respect of the collateral is deemed to be an acknowledgment by any other person who later comes into possession of the collateral.

(4) A debtor's performance of an obligation in respect of a security agreement is an acknowledgment by the debtor of liability in respect of a claim by the creditor for realization on the collateral under agreement.

(5) A creditor's acceptance of a debtor's payment or performance of an obligation in respect of a security agreement is an acknowledgment by the creditor of liability in respect of a claim by the debtor for redemption of the collateral under the agreement.

(6) An acknowledgment by a trustee is an acknowledgment by any other person who is or who later becomes a trustee of the same trust.

(7) An acknowledgment of liability in respect of a claim to recover or enforce an equitable interest in personal property by a person in possession of it is an acknowledgment by any other person who later comes into possession of it.

(8) Subject to subsections (9) and (10), this

Section applies to an acknowledgment of liability in respect of a claim for payment of a liquidated sum even if the person making the acknowledgment refuses or does not promise to pay the sum or the balance of the sum owing.

(9) This

Section does not apply unless the acknowledgment is made to (

a) the claimant; (

b) the claimant's agent; or (

c) an official receiver of or trustee for the claimant, acting under the Bankruptcy and Insolvency Act (Canada) , before the expiry of the limitation period applicable to the claim. (10) Subsections (1), (2), (3), (6) and (7) do not apply unless the acknowledgment is in writing and signed by the person making it or the person's agent.

(11) In the case of a claim for payment of a liquidated sum, part payment of the sum by the defendant or the defendant's agent has the same effect as an acknowledgment referred to in subsection (10). [ 5 ] The mostly factual question is whether the evidence supports a finding that the debt in this case was acknowledged. The mostly legal question is whether what passed between the parties can satisfy subsection 10 which requires that the acknowledgement be “in writing and signed by the person making it.” [ 6 ] This being relatively new legislation, there is not much case law on the topic.

However, in Kenzie MacKinnon Law Inc. v. Mont , 2017 NSSM 71 , I had a similar circumstance before me and I made the following observations: (

a) I see two questions. The first question is whether the email in question is truly an acknowledgement of a debt. The second question is whether, notwithstanding its apparent genuineness, an email deriving from someone's email account can be said to have been signed. (

b) On the first question, I will quote certain parts of the email: "Could you send me an itemized statement ... seems high as we really didn't accomplish much but regardless you can't work for nothing."

(

c) The email goes on to lament the author's poor financial situation. (

d) I find it hard to accept that this email truly acknowledges the debt. My understanding of the reason for why an acknowledgement would reset the limitation period, is that an unequivocal acknowledgement of a debt is virtually the same thing as a promissory note, and it accordingly stands as a renewed debt as of the date that it is signed. (

e) The requirement in the Act for the acknowledgement to be in writing, must be given proper effect.................................. [discussion of the Statute of Frauds ] (

f) What I take from this is that the common law courts of centuries past, mindful of the need to ensure that the requirement of writing not be used as a tool for fraud, developed a narrow exception where "part performance" unequivocally pointed to the alleged agreement respecting land. (

g) However, the provisions of the new Limitation of Actions Act were passed by the Nova Scotia legislature in the year 2014, when it was already well known that much communication takes place by means other than signed documentation. Had the legislature intended that any other reliable acknowledgement would satisfy the terms of the statute, and effectively reset the limitation period, the legislature could have said so. They reverted to the old standby, a document signed by the liable party. Signatures still mean something in 2017. (

h) I have no doubt that Mr. Mont originated the subject email, as I fully trust Mr. MacKinnon's credibility, and I have zero doubt that this document is a forgery or that it could have originated from anyone other than Mr. Mont. However, this is not the question. (

i) The acknowledgement, such as it is, is somewhat equivocal. I do not believe that, on its face, it qualifies as an acknowledgement of the "debt." It is, at best, an acknowledgement of some legal obligation that Mr. Mont probably hoped to negotiate downward. This does not, in my opinion, satisfy the requirement for an acknowledgement which, as I have already stated, should be the equivalent of a promissory note confirming an earlier debt. (

j) Moreover, I am not prepared to circumvent the specific requirements of the legislation which require any acknowledgement to be in writing and signed by the person giving it. Nothing short of a document signed by Mr. Mont acknowledging the specific debt in full, would satisfy the terms of the statute. [ 7 ] With all of that in mind, I will consider the specifics of the alleged acknowledgements. [ 8 ] The context here was that after the invoices were rendered, the parties became embroiled in a separate dispute over alleged damage to a shipment.

There was an insurance claim made, which was denied by the insurer and Polycorp sued Traffic Tech and a third party in a separate Small Claims Court matter. I know little about it, but it eventually settled on terms which were not made known to me. Polycorp appeared to be refusing to pay the invoices at issue here, while the other dispute was pending. [ 9 ] It will be recalled that the invoices in question were issued on November 11, 2020 and December 23, 2020 respectively, and were payable 30 days thereafter.

The limitation period to sue on these invoices would have expired in January 2023, unless the exception applies. [ 10 ] The following relevant email exchanges took place between Mr. Polley and various representatives of Traffic Tech:

Date Traffic Tech Polycorp March 10, 2021 (email) your account is seriously past due in the amount listed below March 10, 2021 (email) I have been receiving your emails. I have been trying to determine what to do with the situation, as we had significant damages on a shipment ..... March 31, 2021 (letter) This is our final notice. Unless payment in full ... is received within 5 business days, we will proceed with legal action. April 13, 2021 (email) Your tone is completely inappropriate given the fact that we have suffered in excess of $20,000 in actual cost to repair cargo damaged in transit.

February 3, 2022 The two-year cut-off date for claims in Nova Scotia is approaching. We have a couple of TrafficTech invoices that we have been holding payment on, and would like to get the matter resolved as we like dealing with TrafficTech. March 16, 2022 It would be nice to settle the matter before the court date. I do realize that we have an outstanding amount payable to TrafficTech for another shipment. I would like to clear our account with TrafficTech so that we can carry on with more business ... January 9, 2023 It has been brought to our attention that these 2 invoices have yet to be paid.

I understand that you were able to settle the claim issue directly with the carrier for the damaged shipment. As there is no longer a pending claim, we would like to have this outstanding payment issue resolved ASAP. No response February 1, 2023 Despite sending you several reminders, we have yet to receive a response with payment details regarding your ... overdue balance. No response [ 11 ] As noted, the claim was issued by the court on March 20, 2023.

This was more than two years after the account was said to be “seriously past due.” [ 12 ] To distill it down further, the following statements were made in emails by Mr. Polley: We have a couple of TrafficTech invoices that we have been holding payment on, and would like to get the matter resolved as we like dealing with TrafficTech. I do realize that we have an outstanding amount payable to TrafficTech for another shipment. I would like to clear our account with TrafficTech so that we can carry on with more business ...

[ 13 ] Are these unequivocal acknowledgements? In my view, they are not. It appears that Mr. Polley was holding payment of these invoices on a principled basis, as some kind of security or leverage for the loss that he had suffered on a different shipment. At no time does Mr. Polley acknowledge that this other claim was settled to his satisfaction, such that he would have no further colour of right justifying withholding payment. It is not enough for Traffic Tech to assert in an email that the other matter was resolved.

The requirement of the statute is for an acknowledgement by the debtor that the debt is valid and owing. [ 14 ] Furthermore, the so-called acknowledgements do not meet the test for “in writing signed by the person giving it.” As I observed in Kenzie MacKinnon Law Inc. v. Mont (above), the legislature did not appear to leave room for anything less than a signed piece of paper. [ 15 ] The emails from Mr. Polley may reflect how business is done these days, but the legislature must be assumed to have known that when they introduced this new Act in 2014. Most emails are not signed in the traditional sense.

Many simply have an indication of the sender’s email address. Some of them contain a digital signature of sorts, but I do not believe that is enough to satisfy the statute. [ 16 ] I believe it would be a slippery slope to treat emails as if they were signed documents. Of course, it is common to see signed letters transmitted as attachments to emails, and I am not suggesting that such a letter might not suffice assuming it contained a suitable acknowledgement. [ 17 ] In the result, I find that the claim was brought beyond the limitation period and the claim must be dismissed.

Order [ 18 ] For all of the above reasons, the claim is hereby dismissed. Eric K. Slone, Small Claims Court Adjudicator