Globex Foreign Exchange Corp. v. Launt et al., (2011) 306 N.S.R.(2d) 96 (CA)

• Judge: Hamilton, Farrar and Bryson, JJ.A.
• Court: Court of Appeal of Nova Scotia (Canada)
• Case Date: July 15, 2011
• Jurisdiction: Nova Scotia
• Citations: (2011), 306 N.S.R.(2d) 96 (CA);2011 NSCA 67;[2011] CarswellNS 494;306 NSR (2d) 96

Globex Foreign Exchange v. Launt (2011), 306 N.S.R.(2d) 96 (CA);

    968 A.P.R. 96

MLB headnote and full text

Temp. Cite: [2011] N.S.R.(2d) TBEd. JL.037

Globex Foreign Exchange Corporation (appellant) v. Carl Launt and 3077860 Nova Scotia Limited (respondents)

(CA332706; 2011 NSCA 67)

Indexed As: Globex Foreign Exchange Corp. v. Launt et al.

Nova Scotia Court of Appeal

Hamilton, Farrar and Bryson, JJ.A.

July 15, 2011.

Summary:

Launt's numbered company contracted to purchase foreign currency from the plaintiff. After the plaintiff purchased the currency, the numbered company refused to complete the contract. The plaintiff sold the currency to the market at a loss and sued the numbered company and Launt. The plaintiff alleged an agency relationship between Launt and his numbered company. Default judgment was obtained against the numbered company. Launt sought summary judgment to dismiss the claim against him, arguing that there was no agency relationship.

The Nova Scotia Supreme Court, in a judgment reported [2010] N.S.R.(2d) Uned. 140, granted summary judgment dismissing the claim as against Launt. The plaintiff appealed, arguing that the judge applied the wrong test for summary judgment.

The Nova Scotia Court of Appeal, Bryson, J.A., dissenting, allowed the appeal and set aside the order for summary judgment. The judge erred in making fact findings on the evidence presented on the summary judgment rather than limiting herself to determining whether there was a genuine issue of fact, or mixed law and fact, requiring a trial.

Agency - Topic 301

Creation of relations - General (incl. what constitutes) - [See Company Law - Topic 311 ].

Company Law - Topic 311

Nature of corporations - Lifting the corporate veil - One person company - The Nova Scotia Court of Appeal distinguished between finding that a corporation acted as agent for its controlling shareholder and piercing the corporate veil - The court referred to the following: "the concepts of piercing the corporate veil and holding that a corporation acts as an agent for the individual who controls that corporation achieve the same result in that they both impose personal liability for what appear to be corporate actions. They achieve that result, however, in different ways. The agency relationship assumes that the corporation and the controlling mind are distinct, but that on the relevant facts the former acted as agent for the latter. Piercing the corporate veil ignores the legal persona of the corporation" - However, the court noted that "few courts distinguish between the two scenarios. Our court has said that the corporate veil may be pierced where a corporation is a mere agent or puppet of a shareholder" - See paragraphs 21 to 22.

Company Law - Topic 2661

Shareholders - Liability of shareholders - General - [See Company Law - Topic 311 ].

Practice - Topic 5708

Judgments and orders - Summary judgments - Bar to application - Existence of issue to be tried - Launt's numbered company contracted to purchase foreign currency from the plaintiff - After the plaintiff purchased the currency, the numbered company refused to complete the contract - The plaintiff sold the currency to the market at a loss and sued the numbered company and Launt - The plaintiff alleged an agency relationship between Launt and his numbered company - Default judgment was obtained against the numbered company - Launt sought summary judgment to dismiss the claim against him, arguing that there was no agency relationship - A Chambers judge granted summary judgment dismissing the claim as against Launt - The Nova Scotia Court of Appeal allowed the plaintiff's appeal and set aside the order for summary judgment - The judge erred in making fact findings on the evidence presented on the summary judgment rather than limiting herself to determining whether there was a genuine issue of fact, or mixed law and fact, requiring a trial - It was not the function of a Chambers judge on a motion for summary judgment to finally determine matters of mixed fact and law - The evaluation of credibility, the weighing of evidence and the drawing of factual inferences were functions reserved to the trial judge - See paragraphs 1 to 34.

Cases Noticed:

Nova Scotia Power Inc. v. AMCI Export Corp. (2010), 292 N.S.R.(2d) 130; 925 A.P.R. 130; 2010 NSCA 41, refd to. [para. 11].

Turner v. Halifax (Regional Municipality) et al. (2009), 283 N.S.R.(2d) 239; 900 A.P.R. 239; 2009 NSCA 106, refd to. [para. 11].

Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423; 247 N.R. 97; 126 O.A.C. 1; 178 D.L.R.(4th) 1, refd to. [para. 13].

Frothingham v. Perez et al. (2011), 304 N.S.R.(2d) 329; 960 A.P.R. 329; 2011 NSCA 59, refd to. [para. 14].

Oceanus Marine Inc. v. Saunders (1996), 153 N.S.R.(2d) 267; 450 A.P.R. 267 (C.A.), refd to. [para. 15].

Bank of Nova Scotia v. MacKenzie's (A.) Auto Mart Inc. et al., [2010] N.S.R.(2d) Uned. 235; 2010 NSCA 81, refd to. [para. 15].

Young v. Ward et al. (2009), 277 N.S.R.(2d) 49; 882 A.P.R. 49; 2009 NSCA 47, refd to. [para. 15].

Brady v. Giles (1835), 1 M. & Rob. 494; 174 E.R. 170, refd to. [para. 19].

Nelson v. Victoria (County) (1988), 81 N.S.R.(2d) 334; 203 A.P.R. 334 (T.D.), refd to. [para. 19].

Provincial Electric (1969) Ltd. v. Registered Holdings Ltd., Mister Transmission (International) Ltd., Etkin (Jerome) Ltd. and Brillinger Investments Ltd. (1977), 34 N.S.R.(2d) 100; 59 A.P.R. 100 (Co. Ct.), refd to. [paras. 20, 66].

Dumbrell v. Regional Group of Companies Inc. et al. (2007), 220 O.A.C. 64; 85 O.R.(3d) 616; 2007 ONCA 59, refd to. [para. 21].

White v. E.B.F. Manufacturing Ltd. et al. (2005), 239 N.S.R.(2d) 270; 760 A.P.R. 270; 2005 NSCA 167, refd to. [paras. 22, 63].

642947 Ontario Ltd. v. Fleischer et al. (2001), 152 O.A.C. 313 (C.A.), refd to. [paras. 23, 59].

MacNeil v. Bethune et al. (2006), 241 N.S.R.(2d) 1; 767 A.P.R. 1; 2006 NSCA 21, refd to. [para. 44].

Lameman et al. v. Canada (Attorney General) et al., [2008] 1 S.C.R. 372; 372 N.R. 239; 429 A.R. 26; 421 W.A.C. 26; 2008 SCC 14, refd to. [para. 45].

Goudie et al. v. Ottawa (City), [2003] 1 S.C.R. 141; 301 N.R. 201; 170 O.A.C. 201; 2003 SCC 14, refd to. [para. 45].

Dawson et al. v. Rexcraft Storage and Warehouse Inc. et al. (1998), 111 O.A.C. 201 (C.A.), refd to. [para. 46].

Huntley et al. v. Hogeterp et al. (2007), 256 N.S.R.(2d) 20; 818 A.P.R. 20; 2007 NSCA 75, refd to. [para. 46].

Dalhousie University v. Aylward (2011), 300 N.S.R.(2d) 393; 950 A.P.R. 393; 2011 NSCA 20, refd to. [para. 46].

Spring Garden Holdings Ltd. v. Ryan Duffy's Restaurants Ltd. et al. (2010), 297 N.S.R.(2d) 207; 943 A.P.R. 207; 2010 NSSC 71, refd to. [para. 47].

Eikelenboom v. Holstein Association of Canada, [2003] N.S.R.(2d) Uned. 124; 2003 NSSC 241, refd to. [para. 47].

Bowden v. Withrow's Pharmacy Halifax (1999) Ltd. et al. (2008), 268 N.S.R.(2d) 299; 857 A.P.R. 299; 2008 NSSC 252, refd to. [para. 47].

Marco Ltd. v. Newfoundland Processing Ltd. et al. (1995), 130 Nfld. & P.E.I.R. 317; 405 A.P.R. 317 (Nfld. T.D.), refd to. [para. 47].

Hercules Management Ltd. et al. v. Ernst & Young et al., [1997] 2 S.C.R. 165; 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241; 146 D.L.R.(4th) 577, refd to. [para. 47].

Eikelenboom v. Holstein Association of Canada (2004), 226 N.S.R.(2d) 235; 714 A.P.R. 235; 2004 NSCA 103, refd to. [para. 47].

Gilbert v. Giffin (2010), 296 N.S.R.(2d) 183; 940 A.P.R. 183; 2010 NSCA 95, refd to. [para. 47].

Campbell v. Lienaux et al. (1998), 167 N.S.R.(2d) 196; 502 A.P.R. 196 (C.A.), refd to. [para. 47].

Goldman et al. v. Devine et al., [2007] O.A.C. Uned. 184; 156 A.C.W.S.(3d) 1042; 2007 ONCA 301, refd to. [para. 47].

DeBlacquiere v. Becker (1858), 8 U.C.C.P. 167 (U.C.C.P.), refd to. [para. 49].

McGuire (W.J.) v. Bridger (1914), 49 S.C.R. 632, refd to. [para. 49].

R. v. Little (1926), 2 D.L.R. 1056 (Ont. H.C.), refd to. [para. 49].

Michigan State Bridge Commission v. Point Edward (Village), [1939] O.J. No. 248 (C.A.), refd to. [para. 49].

Donna Rae Ltd. v. Seaboard G.M. Diesel Ltd. (1979), 29 N.S.R.(2d) 413; 45 A.P.R. 413 (C.A.), refd to. [para. 49].

Hiscock v. Maritime Life Assurance Co. (1999), 171 Nfld. & P.E.I.R. 168; 525 A.P.R. 168 (Nfld. C.A.), refd to. [para. 49].

Berryere v. Fireman's Fund Insurance Co. (1965), 51 D.L.R.(2d) 603 (Man. C.A.), refd to. [para. 50].

Royal Bank of Canada v. 1277520 Ontario Inc. et al., [2001] O.T.C. Uned. 17 (Sup. Ct.), refd to. [para. 50].

Winnipeg City Assessor et al. v. Licharson et al. (2005), 195 Man.R.(2d) 234; 351 W.A.C. 234; 2005 MBCA 95, refd to. [para. 50].

Jodrey Estate v. Nova Scotia and British Columbia and Quebec (Attorneys General), [1980] 2 S.C.R. 774; 32 N.R. 275; 41 N.S.R.(2d) 181; 76 A.P.R. 181, refd to. [para. 53].

Covert et al. v. Minister of Finance - see Jodrey Estate v. Nova Scotia and British Columbia and Quebec (Attorneys General).

Kosmopoulos et al. v. Constitution Insurance Co. of Canada et al., [1987] 1 S.C.R. 2; 74 N.R. 360; 21 O.A.C. 4, refd to. [para. 55].

B.G. Preeco I (Pacific Coast) Ltd. v. Bon Street Holdings Ltd., [1989] B.C.J. No. 1032 (C.A.), refd to. [para. 57].

Edgington v. Mulek Estate et al. (2008), 266 B.C.A.C. 56; 449 W.A.C. 56; 2008 BCCA 505, refd to. [para. 58].

Sutherland (Robert D.) Architects Ltd. v. Montykola Investments Inc. et al. (1995), 142 N.S.R.(2d) 137; 407 A.P.R. 137 (S.C.), refd to. [para. 61].

Lockharts Ltd. v. Excalibur Holdings Ltd. and Baron Developments Ltd. (1987), 83 N.S.R.(2d) 181; 210 A.P.R. 181 (T.D.), refd to. [para. 61].

Clarkson Co. v. Zhelka et al., [1967] 2 O.R. 565 (H.C.), refd to. [para. 67].

Buanderie centrale de Montréal Inc. et autres v. Montréal (Ville) et autres, [1994] 3 S.C.R. 29; 171 N.R. 191; 63 Q.A.C. 191, refd to. [para. 68].

Aluminum Co. of Canada Ltd. v. Toronto (City), [1944] S.C.R. 267, refd to. [para. 68].

Halifax (City) v. Halifax Harbour Commissioner, [1935] S.C.R. 215, refd to. [para. 68].

Toronto (City) v. Famous Players' Canadian Corp., [1936] S.C.R. 141, refd to. [para. 68].

Smith, Stone & Knight Ltd. v. Birmingham Corp., [1939] 4 All E.R. 116 (K.B.), refd to. [para. 68].

Bow Valley Husky (Bermuda) Ltd. et al. v. Saint John Shipbuilding Ltd. et al. (1995), 130 Nfld. & P.E.I.R. 92; 405 A.P.R. 92 (Nfld. C.A.), refd to. [para. 69].

Adams v. Cape Industries plc, [1990] Ch. 433 (C.A.), refd to. [para. 69].

Gregorio v. Intrans-Corp. and Paccar of Canada Ltd. (1994), 72 O.A.C. 51; 18 O.R.(3d) 527 (C.A.), refd to. [para. 70].

Goldman, Sachs & Co. v. Sessions et al. (1999), 13 B.C.T.C. 369 (S.C.), refd to. [para. 76].

Kravontka v. Capital Regional Health Authority et al. (2002), 319 A.R. 277; 2002 ABQB 652, refd to. [para. 78].

Lameman et al. v. Canada (Attorney General) et al. (2006), 404 A.R. 349; 394 W.A.C. 349; 66 Alta. L.R.(4th) 243; 2006 ABCA 392, refd to. [para. 79].

Authors and Works Noticed:

Bowstead and Reynolds on Agency (17th Ed. 2001), pp. 8-070 [para. 52]; 8-074 [para. 53].

Fridman, Gerald Henry Louis, Canadian Agency Law (2009), pp. 4 [paras. 18, 51]; 159, 160 [para. 52].

VanDuzer, J. Anthony, The Law of Partnerships and Corporations, Publications for Professions (1997), p. 100 [para. 64].

Counsel:

Franco P. Tarulli, for the appellant;

Tim Hill and Dianna M. Rievaj, for the respondent, Carol Launt.

This appeal was heard on April 1, 2011, at Halifax, N.S., before Hamilton, Farrar and Bryson, JJ.A., of the Nova Scotia Court of Appeal.

On July 15, 2011, the judgment of the Court was delivered and the following opinions were filed:

Farrar, J.A. (Hamilton, J.A., concurring) - see paragraphs 1 to 34;

Bryson, J.A., dissenting - see paragraphs 35 to 89.