CD Plus.Com Inc. v. Concorde Group Corp., (2002) 222 Sask.R. 302 (QB)

• Judge: Krueger, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: August 27, 2002
• Jurisdiction: Saskatchewan
• Citations: (2002), 222 Sask.R. 302 (QB);2002 SKQB 346

CD Plus.Com Inc. v. Concorde Group (2002), 222 Sask.R. 302 (QB)

MLB headnote and full text

Temp. Cite: [2002] Sask.R. TBEd. SE.002

CD Plus.Com Inc. (formerly National Record 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 346)

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

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Krueger, J.

August 27, 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, in a decision reported in 222 Sask.R. 24, 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 the 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; and (3) judgment against Albo for $150,000 as a penalty pursuant to s. 32. Concorde's counterclaim against Thorndycraft and Drysdale was dismissed. Concorde was awarded its party and party costs against R.B. Music. Thorndycraft had acted on his own behalf and had relied on the defence presented by Drysdale and Albo and no costs were awarded either for or against him. Costs relating to Drysdale and Albo were reserved.

The Saskatchewan Court of Queen's Bench ordered that Concorde would have its party and party costs against Albo and that Drysdale would have his party and party costs against Concorde. Since Albo and Drysdale were represented by the same counsel, they could agree to a set-off of costs.

Practice - Topic 7113

Costs - Party and party costs - Special orders - Increase in scale of costs - For unproved allegations of fraud - Concorde leased premises to R.B. Music - Concorde subsequently claimed against R.B. Music and certain individuals (including Drysdale) seeking, inter alia, a penalty pursuant to s. 32 of the Landlord and Tenant Act - Section 32 imposed a penalty on anyone who wilfully and knowingly assisted in a fraudulent conveyance or removal of goods and chattels to prevent distress by a landlord - Concorde's claim against Drysdale was dismissed - Drysdale argued that he should be awarded double costs because Concorde alleged, but failed to prove, that he had committed fraud - The Saskatchewan Court of Queen's Bench held that the practice of awarding double costs in cases of unproven allegations of fraud should not be extended to this case - Concorde knew that R.B. Music had committed fraud, but it did not know who had wilfully and knowingly assisted in the fraud - Concorde had not alleged that fraud was committed by all of the defendants - The assistance in s. 32 could be as minor as failing to inform the landlord of the removal - See paragraphs 9 to 10.

Practice - Topic 7155

Costs - Party and party costs - Liability for party and party costs - Bullock order or Sanderson order - Where success divided - A plaintiff by counterclaim obtained judgment against two defendants, but its claim was dismissed against two other defendants - A Sanderson or Bullock order was requested requiring an unsuccessful defendant to bear the costs of one of the successful defendants - The Saskatchewan Court of Queen's Bench stated that the purpose of a Sanderson order was to prevent an otherwise successful plaintiff from having to pay costs to a successful defendant in circumstances where the plaintiff could not know which of several defendants was liable - The court held that this was not an appropriate case in which to invoke either a Bullock or a Sanderson order where the plaintiff either knew or ought to have known which defendants it could succeed against - See paragraphs 7 to 8.

Practice - Topic 7242.1

Costs - Party and party costs - Offers to settle - Grounds for denying double costs - Concorde brought a counterclaim against, inter alia, R.B. Music Ltd., CD Plus.Com Inc. and Albo (an officer of CD Plus) - Concorde served an offer to settle which required the payment of $50,000 and that a claim by CD Plus be abandoned - CD Plus went bankrupt - Concorde obtained judgment against R.B. Music and Albo more favourable than the offer to settle - The Saskatchewan Court of Queen's Bench declined to award Concorde double costs after the date of the offer to settle - An offer to settle had to be framed in such a way that it was capable of acceptance by one defendant without requiring some corresponding or collateral action by others - In this case, acceptance of $50,000 to settle the counterclaim was contingent upon CD Plus's claim being abandoned - It was not reasonable to expect Albo to convince the trustee in bankruptcy of CD Plus to discontinue the CD Plus's claim in order to permit Albo to accept the offer to settle - See paragraphs 5 to 6.

Cases Noticed:

Sanderson v. Blyth Theatre Co., [1903] 2 K.B. 533, refd to. [para. 3].

Bullock v. London General Omnibus Co., [1907] 1 K.B. 264, refd to. [para. 3].

Reidy v. Bramalea Ltd. and Toews (1988), 73 Sask.R. 22 (Q.B.), refd to. [para. 4].

Counsel:

Neil B. Fisher, for the applicant, Concorde Group Corp.

Grant M. Currie, for the respondents Wayne Albo and Richard Drysdale.

This matter was heard before Krueger, J., of the Saskatchewan Court of Queen's Bench, Judicial Centre of Saskatoon, who delivered the following judgment on August 27, 2002.