Binder v. Royal Bank of Canada et al.,

• Jurisdiction: Nova Scotia
• Judge: Moir, J.
• Neutral Citation: 2003 NSSC 174
• Citation: 2003 NSSC 174,(2003), 216 N.S.R.(2d) 363 (SC),[2003] NSJ No 304 (QL),216 NSR (2d) 363,(2003), 216 NSR(2d) 363 (SC),216 N.S.R.(2d) 363,216 NSR(2d) 363,[2003] NS.J. No 304 (QL)
• Date: 04 June 2003
• Court: Supreme Court of Nova Scotia (Canada)

Binder v. Royal Bk. (2003), 216 N.S.R.(2d) 363 (SC);

 680 A.P.R. 363

MLB headnote and full text

Temp. Cite: [2003] N.S.R.(2d) TBEd. SE.003

Fabian Lowell Binder (plaintiff) v. Royal Bank of Canada and Bank of Montreal (defendants) and H. Reuben Cohen (third party)

(S.H. No. 119788; 2003 NSSC 174)

Indexed As: Binder v. Royal Bank of Canada et al.

Nova Scotia Supreme Court

Moir, J.

August 18, 2003.

Summary:

In 1995, the plaintiff sued two banks for the 1972 acceptance for deposit to third party accounts of faultily endorsed cheques payable to a New Brunswick company which was half owned by the plaintiff. The plaintiff "discovered" the facts giving rise to the claim in 1988. The banks applied under rule 25.01(1) for a pre-trial determination of whether the action was barred by a limitation period. The banks also applied under rule 14.25(1) to strike the statement of claim. A Chambers judge ruled that the action was statute barred. The plaintiff appealed.

The Nova Scotia Court of Appeal, in a judgment reported 150 N.S.R.(2d) 234; 436 A.P.R. 234, set aside the decision on the ground that a pre-trial determination could not be made absent an agreed statement of facts and certain required fact findings. Subsequently, the Nova Scotia Civil Procedure Rules were amended to permit a defendant to apply for summary judgment dismissing a plaintiff's claim. The banks again applied under rule 25.01, this time seeking summary judgment rather than a pre-trial determination. The banks also revived their rule 14.25(1) applications to strike the statement of claim for failing to disclose a reasonable cause of action, where those applications had not been adjudicated upon at trial or on appeal.

The Nova Scotia Supreme Court struck the statement of claim on an application of the rule in Foss v. Harbottle. The plaintiff's claim, as a shareholder of the company, was derivative, not personal. The plaintiff had no personal cause of action. Alternatively, the court granted summary judgment dismissing the claim where it was unarguable that the claim was statute barred by the New Brunswick Limitation of Actions Act (which was the law that applied) and by s. 159 of the 1990 Bank Act.

Company Law - Topic 9413

Actions by corporations - Parties - Derivative actions - In 1995, the plaintiff sued two banks for the 1972 acceptance for deposit to third party accounts of faultily endorsed cheques payable to a New Brunswick company which was half owned by the plaintiff - The plaintiff "discovered" the facts giving rise to the claim in 1988 - The banks applied under rule 25.01 for summary judgment dismissing the plaintiff's claim and under rule 14.25(1) to strike the statement of claim for failing to disclose a reasonable cause of action - The Nova Scotia Supreme Court struck the statement of claim on an application of the rule in Foss v. Harbottle - The plaintiff's claim, as a shareholder of the company, was derivative, not personal - The plaintiff had no personal cause of action - The company was the proper plaintiff - Alternatively, the court would have granted summary judgment dismissing the claim where it was unarguable that the claim was statute barred by the New Brunswick Limitation of Actions Act (the law that applied) and by s. 159 of the 1990 Bank Act.

Company Law - Topic 9415

Actions by corporations - Parties - Proper plaintiff - [See Company Law - Topic 9413 ].

Practice - Topic 2200

Pleadings - Striking out pleadings - General - The Nova Scotia Supreme Court distinguished between striking a pleading and granting a defendant summary judgment - The court stated that "on a motion to strike a statement of claim, the court will read the pleading generously, in a light most favourable to the plaintiff and it will assume that the averments, so read, are true. The court will only strike the statement of claim if the outcome of the case is plain and obvious, even beyond reasonable doubt. ... The essential purpose of summary judgment is to isolate, and then terminate, claims and defences that are factually unsupported." - Summary judgment involved whether there was a factual basis for a substantively adequate claim - Striking a pleading involved whether there was a substantively adequate claim at all - See paragraphs 9 to 10.

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - [See Company Law - Topic 9413 ].

Practice - Topic 5701

Judgments and orders - Summary judgments - General - [See Practice - Topic 2200 ].

Practice - Topic 5719

Judgments and orders - Summary judgments - To dismiss action - [See Company Law - Topic 9413 ].

Cases Noticed:

Binder v. Royal Bank of Canada et al. (1996), 150 N.S.R.(2d) 234; 436 A.P.R. 234 (C.A.), refd to. [para. 1].

Potter (Carl B.) Ltd. v. Antil Canada Ltd. and Mercantile Bank of Canada (1976), 15 N.S.R.(2d) 408; 14 A.P.R. 408 (C.A.), refd to. [para. 3].

Fidalko v. Levin (1992), 76 Man.R.(2d) 267; 10 W.A.C. 267 (C.A.), refd to. [para. 5].

Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423; 247 N.R. 97; 126 O.A.C. 1, refd to. [para. 5].

Hunt v. T & N plc et al., [1990] 2 S.C.R. 959; 117 N.R. 321, refd to. [para. 9].

Hunt v. Carey Canada Inc. - see Hunt v. T & N plc et al.

Seacoast Towers Services Ltd. v. MacLean (1986), 75 N.S.R.(2d) 70; 186 A.P.R. 70 (C.A.), refd to. [para. 9].

TG Industries Ltd. v. Williams et al. (2001), 196 N.S.R.(2d) 35; 613 A.P.R. 35 (C.A.), refd to. [para. 9].

Future Inns Canada Inc. v. Labour Relations Board (N.S.) et al. (1999), 179 N.S.R.(2d) 213; 553 A.P.R. 213 (C.A.), refd to. [para. 9].

Dawson et al. v. Rexcraft Storage and Warehouse Inc. et al. (1998), 111 O.A.C. 201 (C.A.), refd to. [para. 10].

Silver v. Co-operators General Insurance Co. et al. (2002), 207 N.S.R.(2d) 14; 649 A.P.R. 14 (C.A.), refd to. [para. 11].

Prudential Assurance Co. v. Newman Industries Ltd. et al. (No. 2), [1982] 1 All E.R. 354 (C.A.), refd to. [para. 33].

Lamey v. Wentworth Valley Developments Ltd. et al. (1999), 175 N.S.R.(2d) 356; 534 A.P.R. 356 (C.A.), refd to. [para. 43].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1, refd to. [para. 45].

Central Trust Co. v. Rafuse and Cordon, [1986] 2 S.C.R. 147; 69 N.R. 321; 75 N.S.R.(2d) 109; 186 A.P.R. 109, refd to. [para. 45].

Tolofson v. Jensen and Tolofson, [1994] 3 S.C.R. 1022; 175 N.R. 161; 77 O.A.C. 81; 51 B.C.A.C. 241; 84 W.A.C. 241, refd to. [para. 47].

Clark v. Naqui (1990), 99 N.B.R.(2d) 271; 250 A.P.R. 271 (C.A.), refd to. [para. 47].

Saskatchewan River Bungalows Ltd. and Fikowski v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490; 168 N.R. 381; 155 A.R. 321; 73 W.A.C. 321, refd to. [para. 50].

Persaud et al. v. Royal Bank of Canada, [1994] O.J. No. 1140 (Gen. Div.), affd. (1996), 94 O.A.C. 366 (C.A.), refd to. [para. 52].

Curry v. Dargie (1984), 62 N.S.R.(2d) 416; 136 A.P.R. 416 (C.A.), refd to. [para. 53].

Canada Life Assurance v. Nova Scotia (Minister of Municipal Affairs) et al. (1996), 150 N.S.R.(2d) 260; 436 A.P.R. 260 (S.C.), refd to. [para. 53].

Statutes Noticed:

Civil Procedure Rules (N.S.), rule 14.25(1) [para. 8].

Counsel:

Richard Bureau and David Walker, Q.C., for the plaintiff;

William L. Ryan, Q.C., and Colin Piercey, for the defendant, Royal Bank of Canada;

Douglas Tupper, Q.C., and Michelle Higgins, for the defendant, Bank of Montreal;

S. Bruce Outhouse, Q.C., for the third party.

These applications were heard in Halifax, N.S., on April 16 and June 4, 2003, before Moir, J., of the Nova Scotia Supreme Court, who delivered the following judgment on August 18, 2003.