Binder v. Royal Bank of Canada et al., (2005) 234 N.S.R.(2d) 109 (CA)

• Judge: Cromwell, Saunders and Oland, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: June 16, 2005
• Jurisdiction: Nova Scotia
• Citations: (2005), 234 N.S.R.(2d) 109 (CA);2005 NSCA 94

Binder v. Royal Bk. (2005), 234 N.S.R.(2d) 109 (CA);

    745 A.P.R. 109

MLB headnote and full text

Temp. Cite: [2005] N.S.R.(2d) TBEd. JN.029

Fabian Lowell Binder (appellant) v. The Royal Bank of Canada and The Bank of Montreal (respondents)

(CA 206440; 2005 NSCA 94)

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

Nova Scotia Court of Appeal

Cromwell, Saunders and Oland, JJ.A.

June 16, 2005.

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, in a judgment reported (2003), 216 N.S.R.(2d) 363; 680 A.P.R. 363, 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. Subsequently, the court awarded the banks costs on their application and the action and denied the plaintiff any costs. The plaintiff appealed both decisions. The banks cross-appealed the costs order.

The Nova Scotia Court of Appeal dismissed the appeal and cross-appeal.

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 trial judge 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 - The Nova Scotia Court of Appeal held that the trial judge did not commit any error warranting appellate interference - See paragraphs 1 to 51.

Company Law - Topic 9415

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

Practice - Topic 2230

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

Practice - Topic 5719

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

Practice - Topic 7029.2

Costs - Party and party costs - Entitlement to party and party costs - Successful party - Exceptions - Delay in raising issue - The plaintiff's action against two banks was struck eight years after if was commenced, on the ground that it was statute-barred and violated the rule in Foss v. Harbottle - The trial judge limited the successful banks' costs for the application and trial to $4,000, penalizing them for not applying to strike the claim at the earliest possible time - No costs were awarded to the plaintiff because the claim should never have been made - The plaintiff appealed - The banks cross-appealed, submitting that the trial judge erred in penalizing them for failing to apply to strike the claim at the earliest opportunity and claiming that the costs award was so low as to be patently unjust - The Nova Scotia Court of Appeal dismissed the appeal and cross-appeal - The trial judge, in exercising his discretion, committed no reviewable error and applied no wrong principle of law - There was no error in factoring in the banks' lack of timeliness in applying to strike the claim - See paragraphs 52 to 68.

Cases Noticed:

Foss v. Harbottle (1843), 2 Hare 461; 67 E.R. 189, refd to. [para. 16].

Frank v. Purdy Estate (1995), 142 N.S.R.(2d) 50; 407 A.P.R. 50 (C.A.), refd to. [para. 21].

Clarke v. Sherman et al. (2002), 205 N.S.R.(2d) 112; 643 A.P.R. 112 (C.A.), refd to. [para. 21].

Stacey v. Electrolux Canada (1986), 76 N.S.R.(2d) 182; 189 A.P.R. 182 (C.A.), refd to. [para. 24].

Stacey v. Consolidated Foods Corp. of Canada Ltd. - see Stacey v. Electrolux Canada.

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. 37].

Lucas et al. v. Gagnon et al. - see Tolofson v. Jensen and Tolofson.

Marchischuk v. Dominion Industrial Supplies Ltd. et al. (1989), 58 Man.R.(2d) 56; 39 C.C.L.I. 269 (Q.B.), affd. (1989), 62 Man.R.(2d) 240 (C.A.), affd. [1991] 2 S.C.R. 61; 125 N.R. 306; 73 Man.R.(2d) 271; 3 W.A.C. 271, refd to. [para. 39].

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. 39].

Maracle v. Travellers Indemnity Co. of Canada, [1991] 2 S.C.R. 50; 125 N.R. 294; 47 O.A.C. 333, refd to. [para. 41].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241, refd to. [para. 43].

Pizzo v. Crory, Laws and Charterhouse Equities Ltd. et al. (1986), 71 N.S.R.(2d) 419; 171 A.P.R. 419 (T.D.), dist. [para. 47].

Vladi Private Islands Ltd. v. Haase et al. (1990), 96 N.S.R.(2d) 323; 253 A.P.R. 323 (C.A.), dist. [para. 47].

Conrad v. Snair et al. (1996), 150 N.S.R.(2d) 214; 436 A.P.R. 214 (C.A.), refd to. [para. 52].

Children's Aid Society of Cape Breton-Victoria v. D.C. and L.L.A. (2004), 229 N.S.R.(2d) 49; 725 A.P.R. 49 (C.A.), refd to. [para. 52].

Fraser et al. v. Westminer Canada Ltd. et al. (2005), 233 N.S.R.(2d) 201; 739 A.P.R. 201; 2005 NSCA 27, refd to. [para. 52].

Landymore et al. v. Hardy et al. (1992), 112 N.S.R.(2d) 410; 307 A.P.R. 410 (T.D.), refd to. [para. 59].

Western Trust Co. v. Canadian Northern Railway, [1919] 3 W.W.R. 815 (Sask. C.A.), refd to. [para. 60].

Campbell v. Lienaux et al. (2001), 195 N.S.R.(2d) 220; 609 A.P.R. 220 (S.C.), affd. in part (2002), 208 N.S.R.(2d) 277; 652 A.P.R. 277; 2002 NSCA 104, refd to. [para. 64].

Smith's Field Manor Development Ltd. v. Campbell et al. - see Campbell v. Lienaux et al.

Housen v. Nikolaisen et al., [2002] 2 S.C.R. 235; 286 N.R. 1; 219 Sask.R. 1; 272 W.A.C. 1, refd to. [para. 64].

Couse v. Goodyear Canada Inc. et al. (2005), 231 N.S.R.(2d) 143; 733 A.P.R. 143; 2005 NSCA 46, refd to. [para. 65].

Statutes Noticed:

Civil Procedure Rules (N.S.), rule 14.14(c) [para. 28]; rule 15.01, rule 15.02(1), rule 15.02(2), rule 15.02(3) [para. 27].

Authors and Works Noticed:

Mew, Graeme, The Law of Limitations (2nd Ed. 2004), pp. 126, 127 [para. 39].

Counsel:

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

William Ryan, Q.C., for the respondent, Royal Bank of Canada;

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

This appeal and cross-appeal were heard on September 24, 2004, at Halifax, N.S., before Cromwell, Saunders and Oland, JJ.A., of the Nova Scotia Court of Appeal.

On June 16, 2005, Oland, J.A., delivered the following judgment for the Court of Appeal.