CD Plus.Com Inc. v. Concorde Group Corp., 2002 SKQB 235

• Judge: Krueger, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: June 03, 2002
• Jurisdiction: Saskatchewan
• Citations: 2002 SKQB 235;(2002), 222 Sask.R. 24 (QB)

CD Plus.Com Inc. v. Concorde Group (2002), 222 Sask.R. 24 (QB)

MLB headnote and full text

Temp. Cite: [2002] Sask.R. TBEd. JN.004

CD Plus.Com Inc. (formerly National Records Distributors Ltd.) (plaintiff/defendant by counterclaim) v. Concorde Group Corp. (formerly Dubé Investments Ltd.) (defendant/plaintiff by counterclaim) and R.B. Music Ltd., carrying on business as Music Baron, Wayne Albo, Neil Thorndycraft, and Richard Drysdale (defendants by counterclaim)

(1997 Q.B. No. 1113; 2002 SKQB 235)

Indexed As: CD Plus.Com Inc. v. Concorde Group Corp.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Krueger, J.

June 3, 2002.

Summary:

In 1994, Concorde leased premises to R.B. Music Ltd. for a five year term. In 1997, CD Plus.Com Inc. purchased the assets of R.B. Music and then all of the shares of R.B. Music. The inventory of R.B. Music was moved from the leased premises to a CD Plus store. Concorde prepared a distress warrant and a bailiff seized goods at the CD Plus store. The seized goods were returned in exchange for an undertaking by counsel for CD Plus to hold in trust $15,986.68 to cover the rent claimed by Concorde and the cost of seizure. CD Plus sued Concorde for the recovery of those funds, but made an assignment in bankruptcy and did not prosecute its claim. Concorde counterclaimed against R.B. Music, its president (Thorndycraft) and two officers of CD Plus (Albo and Drysdale) for rent owed under the lease and for a penalty pursuant to s. 32 of the Landlord and Tenant Act.

The Saskatchewan Court of Queen's Bench dismissed CD Plus's action for want of prosecution and ordered that the $15,986.68 held in trust by CD Plus's counsel be paid to Concorde. With respect to Concorde's counterclaim, the court granted Concorde: (1) judgment against R.B. Music for $52,599.16, being the claim for rent lost as a result of the abandonment of the leased premises (the $15,986.68 paid to Concorde was to be deducted from that sum); (2) judgment against R.B. Music for $150,000 as a penalty pursuant to s. 32 of the Act (being double the value of the assets removed from the leased premises); and (3) judgment against Albo for $150,000 as a penalty pursuant to s. 32. Concorde's counterclaim against Thorndycraft and Drysdale was dismissed.

Contracts - Topic 2054

Terms - Implied terms - From apparent intention - The Saskatchewan Court of Queen's Bench amended a lease by adding the words "a right of reentry or termination is permitted" at the end of paragraph 36(c) - The court considered that the obvious intention of the parties to the lease was to include a provision for reentry by the landlord upon the happening of certain enumerated events - Without supplying the words granting the right of reentry, paragraph 36(c) was incomplete and served no purpose - See paragraphs 23 to 28.

Landlord and Tenant - Topic 2321

The lease - Implied terms, conditions or covenants - General - [See Contracts - Topic 2054 ].

Landlord and Tenant - Topic 2823

The lease - Breach by tenant - Acceleration of rent - [See first Landlord and Tenant - Topic 8705 ].

Landlord and Tenant - Topic 6525

Termination, forfeiture and reentry - Termination - Acts constituting - [See Landlord and Tenant - Topic 6627 ].

Landlord and Tenant - Topic 6627

Termination, forfeiture and reentry - Reentry - After abandonment by tenant - In 1994, Concorde leased premises to R.B. Music for a five year term - In 1997, CD Plus purchased the assets of R.B. Music and then all of the shares of R.B. Music - The inventory of R.B. Music was moved from the leased premises to a CD Plus store - Concorde prepared a distress warrant and a bailiff seized goods at the CD Plus store - An argument was made that by taking possession of the leased premises, Concorde terminated the lease and nullified its distraint - The Saskatchewan Court of Queen's Bench held that the lease was in effect at the time of the seizure - The premises had been abandoned and the lease was not terminated by Concorde's reentry - See paragraphs 30 to 32.

Landlord and Tenant - Topic 8705

Distress - General principles - When distress available - In 1994, Concorde leased premises to R.B. Music for a five year term - In May 1997, CD Plus purchased the assets of R.B. Music and then all of the shares of R.B. Music - Rent on the leased premises had been paid until the end of May 1997 - On May 31, 1997, the inventory of R.B. Music was moved from the leased premises to a CD Plus store - Concorde prepared a distress warrant and a bailiff seized goods at the CD Plus store - The Saskatchewan Court of Queen's Bench held that Concorde had a right to distrain the goods off the premises (Landlord and Tenant Act, s. 30) - The requirement in s. 30 that rent be "reserved, due or made payable" was met - Pursuant to a rent acceleration clause in the lease, three months' accelerated rent became due immediately upon the bulk sale, the abandonment of the premises, or the removal of the goods from the premises - See paragraphs 19 to 29.

Landlord and Tenant - Topic 8705

Distress - General principles - When distress available - [See Landlord and Tenant - Topic 8924 ].

Landlord and Tenant - Topic 8923

Distress - Removal of goods liable to distress - Fraud by tenant - What constitutes - [See Landlord and Tenant - Topic 8924 ].

Landlord and Tenant - Topic 8924

Distress - Removal of goods liable to distress - Statutory penalty - In 1994, Concorde leased premises to R.B. Music for a five year term - In 1997, CD Plus purchased the assets of R.B. Music and then all of the shares of R.B. Music - The inventory of R.B. Music was moved from the leased premises to a CD Plus store - Concorde prepared a distress warrant and a bailiff seized goods at the CD Plus store - The Saskatchewan Court of Queen's Bench held that the assets of R.B. Music were fraudulently conveyed away and removed to prevent distress and that Concorde had a right to distrain on goods and chattels off the premises (Landlord and Tenant Act, s. 30) - As a penalty pursuant to s. 32 of the Act, the court granted Concorde judgment against R.B. Music for $150,000, being double the value of the assets removed from the leased premises - The court also granted Concorde judgment against an officer of CD Plus (Albo) for $150,000 as a penalty pursuant to s. 32 where he wilfully and knowingly aided and assisted in the fraudulent conveyance and removal of the R.B. Music inventory - See paragraphs 14 to 18 and 33 to 45.

Cases Noticed:

Harland v. Fancsali (1993), 13 O.R.(3d) 103 (S.C.), refd to. [para. 12].

Levinson-Viner Ltd. v. Gaudreau et al. (1984), 33 R.P.R. 34 (Ont. H.C.), refd to. [para. 18].

Zerouvinski et al. v. Duke, [1924] 3 W.W.R. 49 (Sask. C.A.), refd to. [para. 19].

Canada Life Assurance Co. v. 494708 Alberta Ltd. et al., [1996] 1 W.W.R. 21; 173 A.R. 172 (Q.B.), refd to. [para. 21].

London Drugs Ltd. v. Brassart and Vanwinkel (1990), 45 B.C.L.R.(2d) 1 (C.A.), affd. [1992] 3 S.C.R. 299; 143 N.R. 1; 18 B.C.A.C. 1; 31 W.A.C. 1; [1993] 1 W.W.R. 1; 97 D.L.R.(4th) 261; 73 B.C.L.R.(2d) 1, refd to. [para. 24].

Sacks et al. v. Canada Mortgage and Housing Corp. et al., [2001] B.C.T.C. 394; [2001] B.C.W.L.D. 815 (S.C.), refd to. [para. 24].

Luxor (Eastbourne) Ltd. v. Cooper, [1941] 1 All E.R. 33 (H.L.), refd to. [para. 24].

Hunchak Estate v. Bandura (1987), 83 A.R. 262; 53 Alta. L.R.(2d) 412 (Q.B. Master), refd to. [para. 26].

Sylvan Lake Golf & Tennis Club Ltd. v. Performance Industries Ltd. and O'Connor (No. 2) (2002), 283 N.R. 233; 299 A.R. 201; 266 W.A.C. 201 (S.C.C.), refd to. [para. 26].

Hutchinson v. Wiebe's J-Mart Ltd., [1998] 10 W.W.R. 150; 128 Man.R.(2d) 294 (Q.B.), refd to. [para. 31].

Mundell v. 796586 Ontario Ltd. (1996), 8 O.T.C. 231; 3 R.P.R.(3d) 277 (Gen. Div.), refd to. [para. 32].

Nebete Inc. v. Sanelli Foods Ltd. et al. (1999), 92 O.T.C. 81; 24 R.P.R.(3d) 114 (Gen. Div.), refd to. [para. 43].

Cowie Industrial Developments Ltd. v. National Warehouse Ltd. et al. (1997), 32 O.T.C. 4; 10 R.P.R.(3d) 35 (Gen. Div.), affd. (1999), 119 O.A.C. 91; 23 R.P.R.(3d) 182 (C.A.), refd to. [para. 44].

Statutes Noticed:

Landlord and Tenant Act, R.S.S. 1978, c. L-6, sect. 30(1), sect. 32 [para. 10].

Authors and Works Noticed:

Chitty on Contracts (23rd Ed. 1968), p. 630 [para. 27].

Counsel:

Neil B. Fisher, for Concorde Group Corp.;

Grant M. Currie, for Wayne Albo and Richard Drysdale;

Neil Thorndycraft, for himself;

CD Plus.Com Inc. and R.B. Music Ltd., not appearing.

This action and counterclaim were heard before Krueger, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on June 3, 2002.