Cleary v. C.M. Commodities Inc., 2010 MBQB 197

• Judge: Clearwater, J.
• Court: Court of Queen's Bench of Manitoba (Canada)
• Case Date: August 27, 2010
• Jurisdiction: Manitoba
• Citations: 2010 MBQB 197;(2010), 259 Man.R.(2d) 16 (QB)

Cleary v. CM Commodities (2010), 259 Man.R.(2d) 16 (QB)

MLB headnote and full text

Temp. Cite: [2010] Man.R.(2d) TBEd. SE.019

Michael Cleary (plaintiff/respondent) v. C.M. Commodities Inc. (defendant/appellant)

(CI 09-01-61747; 2010 MBQB 197)

Indexed As: Cleary v. C.M. Commodities Inc.

Manitoba Court of Queen's Bench

Winnipeg Centre

Clearwater, J.

August 27, 2010.

Summary:

The plaintiff sued the defendant corporation for $135,406.82 allegedly owing under a shareholder's loan, plus interest and costs. The plaintiff was granted garnishment before judgment of insurance monies. The insurance monies were from a fire at the defendant's premises that resulted in the cessation of business operations. Pursuant to the order, the insurer paid $135,406.82 into court. The defendant brought a motion seeking an order that the garnishment before judgment be revoked. The Master refused and granted the plaintiff's motion for summary judgment. The defendant appealed both orders.

The Manitoba Court of Queen's Bench dismissed the appeals.

Creditors and Debtors - Topic 505

Creditors' rights - Payment of debt - Right to demand payment - The plaintiff sued the defendant corporation for $135,406.82 allegedly owing under a shareholder's loan, plus interest and costs - The plaintiff was granted garnishment before judgment of insurance monies - The insurance monies were from a fire at the defendant's premises that resulted in the cessation of business operations - Pursuant to the order, the insurer paid $135,406.82 into court - The defendant brought a motion seeking an order that the garnishment before judgment be revoked - The Master refused and granted the plaintiff's motion for summary judgment - The defendant appealed both orders - The defendant argued that summary judgment was not appropriate where there were issues: (i) of credibility and (ii) whether the loan was payable on demand - The Manitoba Court of Queen's Bench dismissed the appeals - First, the plaintiff had established the necessary prima facie case - Second, the defendant did not persuade the court that there was any genuine issue for trial (even if there might be some credibility issues) - The court rejected the suggestion that repayment when the defendant's business was "well established and earning income" constituted an enforceable agreement as to when the loans were to be repaid - Such terms or concepts were so vague and uncertain that they were unenforceable - Absent an agreement as to specific terms as to when and how a loan was to be repaid, the loan was, in law, a demand loan - As such, the plaintiff was entitled to demand payment, which it did on April 21, 2009 - Further, as evidence in support of the plaintiff's position that there never was any agreement, oral or otherwise, that the loan would not be repayable on demand at any time before February 18, 2009 (or if there was any such agreement, the corporation and Melo, president of the defendant, agreed to certain and specific terms whereby the loan was repayable on demand with interest), it was undisputed that on February 18, 2009, Melo, in his capacity as president of the defendant (and the defendant) instructed the defendant's lawyer to prepare and send a general security agreement (GSA) offering (if not confirming) that henceforth the loan was a demand loan to be secured and paid in accordance with the GSA - This was clear evidence of the parties' intention, and even if it could be said that this document was, at that date, only an "offer" of some new terms to the plaintiff, it was never revoked or withdrawn by the defendant or Melo before its execution and return by the plaintiff after the fire.

Practice - Topic 5701.1

Judgments and orders - Summary judgments - Debt or liquidated demand - [See Creditors and Debtors - Topic 505 ].

Practice - Topic 5702

Judgments and orders - Summary judgments - Jurisdiction or when available or when appropriate - [See Creditors and Debtors - Topic 505 ].

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - [See Creditors and Debtors - Topic 505 ].

Cases Noticed:

Demetrioff et al. v. Demetrioff (2008), 244 Man.R.(2d) 182; 2008 MBQB 313, refd to. [para. 11, Schedule A].

Skrien v. Waterloo Junction Rail Tours Ltd. (1997), 32 O.R.(3d) 777 (Gen. Div.), refd to. [para. 11, Schedule A].

Canadian Food Inspection Agency v. Northern Goose Processors Ltd., [2005] Man.R.(2d) Uned. 29; 2005 MBQB 86, refd to. [Schedule A].

Winnipeg Old Country Sausage Ltd. v. Kahan (L.) Wholesale Meat Ltd. et al. (1995), 101 Man.R.(2d) 62 (Q.B. Master), refd to. [Schedule A].

Podkriznik v. Schwede (1990), 64 Man.R.(2d) 199 (C.A.), refd to. [Schedule A].

Lechow v. A.E.I. Telecommunications (Canada) Ltd. (1991), 73 Man.R.(2d) 109; 3 W.A.C. 109 (C.A.), refd to. [Schedule A].

Sandomirsky v. Leith (2004), 186 Man.R.(2d) 1; 2004 MBQB 159 (Master), refd to. [Schedule A].

Malhi v. Panjabi Canadians Society of Winnipeg Inc., [2002] Man.R.(2d) Uned. 50; 2002 MBQB 133, refd to. [Schedule A].

Meredith v. Hammersmith Financial Services Ltd., 1998 ABQB 1198, refd to. [Schedule A].

Pietzsch v. R-Tek Corp. (1993), 87 Man.R.(2d) 298 (Q.B.), refd to. [Schedule A].

MTS Allstream Inc. v. Bell Mobility Inc. et al. (2008), 227 Man.R.(2d) 95; 2008 MBQB 103, refd to. [Schedule A].

Jane Doe et al. v. Manitoba (2005), 192 Man.R.(2d) 309; 340 W.A.C. 309; 2005 MBCA 57, refd to. [Schedule A].

Half (Robert) Canada Inc. v. Jeewan et al., [2004] O.T.C. 597; 71 O.R.(3d) 650 (Sup. Ct.), refd to. [Schedule A].

Board of Education of St. Vital School Division No. 6 v. Trnka (2001), 160 Man.R.(2d) 59; 262 W.A.C. 59; 2001 MBCA 164, refd to. [Schedule A].

Iliopoulos v. Matthews et al., [1999] Man.R.(2d) Uned. 171 (Q.B. Master), refd to. [Schedule A].

Croizier v. Wellair Concepts Inc. et al. (1997), 122 Man.R.(2d) 208 (Q.B.), refd to. [Schedule A].

Trussbilt Inc. v. Steelman Distributors Ltd. and Daher (1995), 106 Man.R.(2d) 302 (Q.B. Master), refd to. [Schedule A].

Kuhl et al. v. Valley Agricultural Society et al. (1991), 72 Man.R.(2d) 260 (Q.B.), refd to. [Schedule A].

Authors and Works Noticed:

Bryant, Alan W., Lederman, Sidney N., and Fuerst, Michelle K., Sopinka, Lederman & Bryant: The Law of Evidence in Canada (3rd Ed. 2009), p. 1035 [Schedule A].

Busby, Karen, Manitoba Queen's Bench Rules Annotated, rules 20 [para. 10, Schedule A]; 37.06(2), 37.06(3), 39.01(6), 46.14(6), 51.06(1), 51.06(2), 62.01 [Schedule A].

Counsel:

Madeline E. Low, for the plaintiff/respondent;

Karen A. Burwash, for the defendant/appellant, re the summary judgment appeal;

Frederick E. Bortoluzzi, for the defendant/appellant, re the garnishment appeal.

These appeals were heard by Clearwater, J., of the Manitoba Court of Queen's Bench, Winnipeg Centre, who delivered the following decision on August 27, 2010.