Canadian Engineering and Surveys (Yukon) Ltd. et al. v. Banque Nationale de Paris (Canada), (1999) 242 A.R. 61 (QB)

• Judge: MacCallum, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: March 22, 1999
• Citations: (1999), 242 A.R. 61 (QB)

Cdn. Eng. and Surveys Ltd. v. Nat. Bk. (1999), 242 A.R. 61 (QB)

MLB headnote and full text

Temp. Cite: [1999] A.R. TBEd. AP.011

Canadian Engineering and Surveys (Yukon) Ltd. and G.W. Walker Holdings Ltd., carrying on business under the firm name and style of Peers Electronics, Peers Electronics, and Canadian Engineering and Surveys Co. Ltd. (plaintiffs) v. Banque Nationale de Paris (Canada) (defendant)

(Action No. 8503-13779)

Indexed As: Canadian Engineering and Surveys (Yukon) Ltd. et al. v. Banque Nationale de Paris (Canada)

Alberta Court of Queen's Bench

Judicial District of Edmonton

MacCallum, J.

March 22, 1999.

Summary:

The corporate plaintiff sued its bank for damages arising out the termination of a credit facility.

The Alberta Court of Queen's Bench allowed the action and awarded the plaintiff $35,000 damages.

Banks and Banking - Topic 704

Duties of banks - General - Duty to act reasonably - A bank advanced a demand operating loan to the corporate plaintiff - Concerned for the recoverability of $1,729,689, the bank took collection efforts against the plaintiff, an insolvent company riddled with internal discord, without giving reasonable notice - The plaintiff failed because it had no reserve of working capital to replace the financing - The plaintiff sued the bank for damages arising out of the termination of the credit facility - The Alberta Court of Queen's Bench held that the bank was entitled to pull its credit facility on demand, but had acted unreasonably by failing to give rea­sonable notice - Only damages attri­butable to that failure were compensable, not damages resulting from the plaintiff's inability to replace the lost financing - The court awarded $35,000 in damages for the loss of a particular contract resulting from the bank's actions - See paragraphs 94 to 178.

Banks and Banking - Topic 5152

Loans - Duties of bank - Reasonable notice of requirement to pay - [See Banks and Banking - Topic 704 ].

Contracts - Topic 3525

Performance or breach - Breach - Whether breach caused damage - [See Banks and Banking - Topic 704 ].

Contracts - Topic 4021

Remedies for breach - Damages - General - [See Banks and Banking - Topic 704 ].

Creditors and Debtors - Topic 1065

Debtors' rights - Before payment - Reasonable notice of requirement to pay - A bank advanced a demand operating loan to the corporate plaintiff - The bank, con­cerned for the recoverability of $1,729,689, wanted the loans paid out and the credit facility brought to an end - Loans were called on October 4 - The plaintiff pleaded for time - On October 12, it made a $1,200,000 deposit and advised that more money was available - The bank paid out one loan and then dishonoured some cheques while there remained $200,000 in the plaintiff's account - For­mal collection action was taken on October 16, 12 days after demand had been made - The plain­tiff sued the bank for damages arising out of the termination of the credit facility - At issue was whether the bank had provided reasonable notice - The Alberta Court of Queen's Bench listed seven factors to consider and held that reasonable notice had not been given in the circumstances - See paragraphs 65 to 93.

Damage Awards - Topic 1005

Contracts - General - Breach of contract - Loss of profits - [See Banks and Banking - Topic 704 ].

Cases Noticed:

Bank of Nova Scotia v. Dunphy Leasing Enterprises Ltd. (1991), 120 A.R. 241; 8 W.A.C. 241 (C.A.), refd to. [para. 66].

Mister Broadloom Corp. (1968) Ltd. v. Bank of Montreal et al. (1979), 25 O.R.(2d) 198 (H.C.), refd to. [para. 71].

Redhawk Drilling Ltd. v. Toronto-Dominion Bank (1986), 77 A.R. 49 (Q.B.), refd to. [para. 85].

Kavcar Investments Ltd. et al. v. Aetna Financial Services Ltd. and Coopers & Lybrand (1989), 35 O.A.C. 305; 62 D.L.R.(4th) 277 (C.A.), refd to. [para. 89].

Federal Business Development Bank v. Dunn, [1984] 6 W.W.R. 46; 35 Sask.R. 4 (Q.B.), affd. [1989] 4 W.W.R. 662; 74 Sask.R. 180 (C.A.), refd to. [para. 91].

Whonnock Industries Ltd. et al. v. National Bank of Canada et al., [1987] 6 W.W.R. 316 (B.C.C.A.), refd to. [para. 92].

Bradshaw Construction Ltd. v. Bank of Nova Scotia, [1993] 1 W.W.R. 596; 16 B.C.A.C. 62; 28 W.A.C. 62 (C.A.), refd to. [para. 164].

Houweling Nurseries Ltd. v. Fisons West­ern Corp. (1988), 49 D.L.R.(4th) 205 (B.C.C.A.), refd to. [para. 171].

Kohler v. Thorold Natural Gas Co. (1916), 52 S.C.R. 514, refd to. [para. 176].

Counsel:

J.A. Weir, Q.C., M.W. Jones and P.G. Kirman, for the plaintiffs;

J.L. Lebo, Q.C., and M.H. Hollins, for the defendant.

This action was heard by MacCallum, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following reasons for judgment on March 22, 1999.