Bank of Nova Scotia v. Ukrainian Greek Orthodox Congregation of Holy Trinity, (1991) 122 A.R. 197 (QB)

• Judge: Cooke, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: August 28, 1991
• Citations: (1991), 122 A.R. 197 (QB)

BNS v. Ukrainian Greek Orthodox (1991), 122 A.R. 197 (QB)

MLB headnote and full text

The Bank of Nova Scotia (plaintiff) v. The Ukrainian Greek Orthodox Congregation of Holy Trinity, carrying on business under the firm name and style of Holy Trinity Ukrainian Greek Orthodox Church of Canada, Lethbridge, Alberta and carrying on business under the firm name and style of Holy Trinity Ukrainian Greek Orthodox Church of Canada and the said The Ukrainian Greek Orthodox Congregation of Holy Trinity (defendant)

(Action No. 8801-07455)

Indexed As: Bank of Nova Scotia v. Ukrainian Greek Orthodox Congregation of Holy Trinity

Alberta Court of Queen's Bench

Judicial District of Calgary

Cooke, J.

August 28, 1991.

Summary:

A bank sued a church on a promissory note. The church pleaded in defence that the borrowing officers lacked actual or osten­sible authority to borrow and that noncompliance with s. 18 of the Religious Societies' Land Act made the promissory note unenforceable.

The Alberta Court of Queen's Bench allowed the action. The officers had actual or ostensible authority and s. 18 did not apply.

Churches - Topic 1062

Internal government - Representatives - Actual or ostensible authority - Officers of an incorporated church gave a promissory note as security for a bank loan - When the bank sued on the note, the congrega­tion claimed the officers lacked actual or ostensible authority to borrow - The church's declaration of incorporation empowered the officers to borrow - The officers were elected, presented the cor­porate seal, executed and delivered bor­rowing resolutions and other documenta­tion - The Alberta Court of Queen's Bench stated that even if the officers lacked actual authority, they had ostensible au­thor­ity where there was a holding out that they had power to borrow on behalf of the congregation - See paragraphs 1 to 32.

Churches - Topic 1105

Internal government - Statutory regulation - Instruments dealing with congregation property - Authorization - Section 18(1) of the Religious Societies' Land Act required that instruments dealing with property of an incorporated congregation be executed under corporate seal, attested by the signature of two or more officers and be accompanied by an affidavit that the instrument was approved by the con­gregation - The Alberta Court of Queen's Bench stated that noncompliance with s. 18(1) rendered the instrument unenforce­able - The court stated that although a promissory note given as security for a bank loan was an "instrument", it was not an instrument "dealing with the property of the congregation" - Accordingly, s. 18(1) did not preclude enforcement of the prom­issory note - See paragraphs 33 to 46.

Cases Noticed:

Royal British Bank v. Turquand (1856), 6 E & B 327, refd to. [para. 13].

Freeman and Lockyer v. Buchhurst Park Properties, [1964] 1 All E.R. 630, refd to. [para. 17].

Clayborn Investments Ltd. v. Wiegert (1977), 5 A.R. 50; 3 Alta. L.R.(2d) 295 (C.A.), dist. [para. 41].

Statutes Noticed:

Interpretation Act, R.S.A. 1980, c. I-7, sect. 16 [para. 14].

Religious Societies' Land Act, R.S.A. 1980, c. R-14, sect. 18(1) [para. 34].

Counsel:

P.S. Jull (Ballem McDill MacInnes & Eden), for the plaintiff;

R.A. Low (Huckvale & Company), for the defendant.

This action was heard before Cooke, J., of the Alberta Court of Queen's Bench, Judicial District of Calgary, who delivered the fol­lowing judgment on August 28, 1991.