Cinabar Enterprises Ltd. v. Bertelson et al., (2000) 193 Sask.R. 161 (QB)

• Judge: Wilkinson, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: May 17, 2000
• Jurisdiction: Saskatchewan
• Citations: (2000), 193 Sask.R. 161 (QB);2000 SKQB 229

Cinabar Ent. Ltd. v. Bertelson (2000), 193 Sask.R. 161 (QB)

MLB headnote and full text

Temp. Cite: [2000] Sask.R. TBEd. JN.034

Cinabar Enterprises Ltd. (plaintiff) v. Larry Bertelson and Tanks Are Us Ltd. (defendants)

(1998 Q.B.G. No. 181; 2000 SKQB 229)

Indexed As: Cinabar Enterprises Ltd. v. Bertelson et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Battleford

Wilkinson, J.

May 17, 2000.

Summary:

Cinabar employed the defendant Bertelson until conflicts arose over a business deal to sell oil tanks. Bertelson and Cinabar liti­gated their dispute and settled out of court. The settlement agreement and indemnities in­volved Bert­elson but not his solely owned and controlled company, Tanks Are Us Ltd. The agree­ment provided that Bert­elson could not sell certain oil tanks without notifying and shar­ing profits with Cinabar. Tanks Are Us sold the tanks with­out follow­ing the terms of the agreement. Cina­bar brought an action for dam­ages under the settlement agreement, and a claim for rent for storing an unrelated tank.

The Saskatchewan Court of Queen's Bench allowed the plaintiff's action.

Choses in Action - Topic 22

General - Chose in action - What consti­tutes - [See Landlord and Tenant - Topic 3802 ].

Company Law - Topic 311

Nature of corporations - Lifting the corpor­ate veil - One person company - A settle­ment agreement between Cinabar and Bertelson did not include Bertelson's solely owned and controlled com­pany, Tanks Are Us Ltd. - The agreement provided that Bertelson could not sell certain oil tanks without notifying and sharing profits with Cinabar - Tanks Are Us sold the tanks without following these terms - Cinabar sued for damages under the settlement agreement - Cinabar argued the corporate veil should be lifted and the acquisition and sale of the four tanks be considered the acquisition by Bertelson in his personal capacity - The Saskatchewan Court of Queen's Bench lifted the corporate veil and allowed the plain­tiff's action - See paragraph 76.

Contracts - Topic 2054

Terms - Implied terms - From apparent intention - [See Contracts - Topic 7526 ].

Contracts - Topic 7401

Interpretation - Intention of parties (incl. reasonable expectations) - [See Contracts - Topic 7526 ].

Contracts - Topic 7406

Interpretation - Interpretation by context - [See Contracts - Topic 7526 ].

Contracts - Topic 7526

Interpretation - Surrounding circumstances - Commercial setting - A settle­ment agree­ment between Cinabar and Bertelson did not include Bertelson's com­pany, Tanks Are Us Ltd. - The agreement provided that Bertelsen could not sell certain oil tanks without notifying and sharing profits with Cinabar - Tanks Are Us sold the tanks without following these terms - Cinabar sued for damages under the agree­ment - Cinabar argued that the con­text and sur­rounding circum­st­ances should be exam­ined - The Saskatchewan Court of Queen's Bench allowed the plain­tiff's action - It was proper for the court to look at the sur­rounding circumstances and fac­tual matrix to interpret the intention of the parties and their reasonable expecta­tions - The agree­ment bound Tanks Are Us by an implied term - This contextual approach did not offend the parol evidence rule.

Evidence - Topic 6725

Parol evidence rule - Interpretation of a legal act - Evidence of intention of parties - Joint intention of parties - [See Con­tracts - Topic 7526 ].

Evidence - Topic 6755

Parol evidence rule - Interpretation of a legal act - Evidence of surrounding cir­cum­stances - Setting in which agreement made - [See Contracts - Topic 7526 ].

Landlord and Tenant - Topic 3802

Rent - General - Nature of - Cinabar sought accrued rent from the defen­dant Tanks Are Us for storage of an oil tank - The rent had accrued prior to Cinabar selling its interest in the land - The Saskatchewan Court of Queen's Bench allowed the action - The rent owing was a chose in action - Cinabar did not assign this claim to the purchaser along with its interest in the leasehold - The accrued rent was not an incident to land or to a lease­hold interest in land - See paragraph 78.

Cases Noticed:

Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69; 206 N.R. 299; 157 N.S.R.(2d) 81; 462 A.P.R. 81; 142 D.L.R.(4th) 230; 60 L.C.R. 161, refd to. [para. 47].

White v. Central Trust Co. (1984), 54 N.B.R.(2d) 293; 140 A.P.R. 293; 7 D.L.R.(4th) 236 (C.A.), refd to. [para. 47].

Regan v. 435766 Ontario Ltd. et al. (1999), 84 O.T.C. 151; 45 C.L.R.(2d) 288 (Gen. Div.), refd to. [para. 48].

Toronto-Dominion Bank v. Leigh Instru­ments Ltd. (Bankrupt) et al. (1998), 63 O.T.C. 1; 40 B.L.R.(2d) 1 (Gen. Div.), refd to. [para. 49].

Prenn v. Simmonds, [1971] 1 W.L.R. 1381; [1971] 3 All E.R. 237 (H.L.), refd to. [para. 49].

Atlific (Nfld.) Ltd. v. Hotel Buildings Ltd. and Newfoundland (1994), 120 Nfld. & P.E.I.R. 91; 373 A.P.R. 91 (Nfld. C.A.), refd to. [para. 49].

Craighampton Investments Ltd. v. Ayers­wood Developments Ltd. and Lynhurst Estate Ltd. (1984), 4 O.A.C. 124 (C.A.), refd to. [para. 49].

Canada Law Book Co. v. Boston Book Co. (1922), 64 S.C.R. 182, refd to. [para. 50].

Reardon Smith Line Ltd. v. Hansen-Tang­en, [1976] 1 W.L.R. 989; [1976] 3 All E.R. 570 (H.L.), refd to. [para. 51].

Imperial Oil Ltd. v. Young et al. (1998), 167 Nfld. & P.E.I.R. 280; 513 A.P.R. 280 (Nfld. C.A.), refd to. [para. 52].

Fort Frances (Town) v. Boise Cascade Canada Ltd. et al. (1981), 34 O.R.(2d) 18; 126 D.L.R.(3d) 649 (C.A.), varied [1983] 1 S.C.R. 171; 46 N.R. 108, refd to. [para. 54].

Boise Cascade Canada Ltd. v. The Queen in Right of Ontario et al. - see Fort Frances (Town) v. Boise Cascade Canada Ltd. et al.

British Movietonews v. London and Dis­trict Cinemas, [1952] A.C. 166, refd to. [para. 54].

Rowen (Charles P.) & Associates Inc. v. CIBA-Geigy Canada Ltd. (1994), 72 O.A.C. 321; 19 O.R.(3d) 205 (C.A.), refd to. [para. 65].

Graycombe Associates Ltd. v. Northern Stag Industries Ltd. (1977), 14 O.R.(2d) 201 (H.C.), refd to. [para. 65].

Sellers v. London Counties Newspapers, [1951] 1 All E.R. 544 (C.A.), refd to. [para. 65].

Saskatchewan Economic Development Corp. v. Patterson-Boyd Manufacturing Corp., P-B Fabricators Ltd. and Western Metal & Supply Co., [1981] 2 W.W.R. 40; 6 Sask.R. 325 (C.A.), refd to. [para. 76].

Glasgow Lumber Co. v. Fettes, [1932] 1 W.W.R. 195; [1933] 1 D.L.R. 66 (Sask. C.A.), refd to. [para. 78].

Farm Credit Corp. v. Mihilewicz et al. (1995), 139 Sask.R. 81 (Q.B.), refd to. [para. 79].

Sagon v. Royal Bank of Canada et al. (1992), 105 Sask.R. 133; 32 W.A.C. 133 (C.A.), refd to. [para. 79].

Barrett, Nicholas and Reiss v. Board of Education of the Northern Lights School Division No. 113 (1986), 47 Sask.R. 251 (Q.B.), affd. (1988), 64 Sask.R. 81 (C.A.), refd to. [para. 79].

Zwicker v. Schubert et al. (1999), 184 Sask.R. 35 (Q.B.), refd to. [para. 79].

Authors and Works Noticed:

Canadian Encyclopedic Digest (3rd Ed.), paras. 496-494, 506 [para. 43].

C.E.D. - see Canadian Encyclopedic Digest.

Fridman, G.H.L., The Law of Contract (2nd Ed. 1986), p. 591 [paras. 55, 69].

Waddams, S.M., The Law of Contracts (3rd Ed. 1993), pp. 100 [para. 52]; 215 [para. 46].

Williams and Rhodes, Canadian Law of Landlord and Tenant (6th Ed. 1988), pp. 7-1, 7-7 [para. 78].

Counsel:

P.J. Harasen, for the plaintiff;

G.D. Heinricks, Q.C., for the defendants.

This action was heard before Wilkinson, J., of the Saskatchewan Court of Queen's Bench, Judicial District of Battleford, who delivered the following judgment on May 17, 2000.