Haggart Construction Ltd. et al. v. Canadian Imperial Bank of Commerce et al., (1998) 213 A.R. 241 (QB)

• Judge: Binder, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: January 08, 1998
• Citations: (1998), 213 A.R. 241 (QB)

Haggart Constr. Ltd. v. CIBC (1998), 213 A.R. 241 (QB)

MLB headnote and full text

Temp. Cite: [1998] A.R. TBEd. JA.029

Haggart Construction Ltd. and David Haggart (plaintiffs) v. The Canadian Imperial Bank of Commerce, Marvin Behiel, A.A. Higginson, A.N. Grant, A.J. Ingle, Herbert Smith and Bob Sander (defendants)

(Action No. 8903-08507)

Indexed As: Haggart Construction Ltd. et al. v. Canadian Imperial Bank of Commerce et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Binder, J.

January 8, 1998.

Summary:

The plaintiffs, Haggart and Haggart Con­struction Ltd., obtained a line of credit from the defendant bank in 1980. The outstanding balance was not to exceed 75% of the com­pany's re­ceivables. On March 20, 1989, the bank became aware that the loan was out of mar­gin and in breach of the condition to the extent of $108,000. On April 5, 1989, the bank called the loan by demanding payment. Haggart was subsequently forced to discon­tinue the com­pany's business. The plaintiffs sued the bank and several bank employees alleging that the bank wrongfully called the loan, froze the company's account and failed to provide the plaintiffs with a reasonable time to pay the outstanding balance. The plaintiffs also alleged defamation by the defendants with respect to statements made regarding Hag­gart's gambling.

The Alberta Court of Queen's Bench held that the bank failed to provide the plaintiffs with reasonable notice and/or time to pay and that the failure more than minimally contributed to the company's going out of business. The court awarded the plaintiffs damages for past and future loss of income and punitive damages. The defamation claim was dismissed.

Banks and Banking - Topic 5152

Loans - Duties of bank - Reasonable notice of requirement to pay - The plaintiffs, Haggart and Haggart Construction Ltd., obtained a line of credit from the defen­dant bank in 1980 - The outstanding bal­ance was not to exceed 75% of the com­pany's receivables - On March 20, 1989, the bank became aware that the loan was out of margin and in breach of the condi­tion to the extent of $108,000 - On April 5, 1989, the bank called the loan by de­manding payment and froze the company's account - Haggart was subsequently forced to discontinue the company's business - The Alberta Court of Queen's Bench held that the bank failed to provide the plain­tiffs with reasonable notice and/or time to pay and that the failure more than mini­mally contributed to the company's going out of business - The court rejected the bank's argument that it should be judged in accordance with 1989 standards, rather than 1997 - The court awarded the plain­tiffs damages for past and future loss of income and punitive damages, but declined to award general damages for embarrass­ment, emotional turmoil, etc. - See para­graphs 1 to 86 and 107 to 120.

Creditors and Debtors - Topic 1065

Debtors' rights - Before payment - Reason­able notice of requirement to pay - [See Banks and Banking - Topic 5152 ].

Damages - Topic 1310

Exemplary or punitive damages - Negli­gence - [See Banks and Banking - Topic 5152 ].

Damages - Topic 1420

Special damages - Loss of business income - General - [See Banks and Banking - Topic 5152 ].

Damages - Topic 1532

General damages - Elements of general damages - Mental distress or emotional upset - [See Banks and Banking - Topic 5152 ].

Libel and Slander - Topic 2983

Defences - Qualified privilege - When available - The plaintiffs, Haggart and Haggart Construction Ltd., obtained a line of credit from the defendant bank - A Mr. Sharp advised Behiel, the bank manager, that he had seen Haggart in Las Vegas and that Haggart "was in bad shape and had lost a lot of money" - Behiel advised an inspector in the bank's credit department that he had been advised that Haggart had recently incurred gambling losses of between $30,000 to $40,000 - The state­ment re­garding the gambling losses was repeated by bank employees in internal documents - The bank subsequently called the plain­tiffs' loan by demanding payment - The plaintiffs sued the bank and its employees for, inter alia, defamation - The Alberta Court of Queen's Bench held that if the statements regarding Haggart's gambling were defamatory, they were protected by qualified privilege where the defendants believed the statements were true and there was no intent to deceive or mislead - See paragraphs 87 to 97.

Cases Noticed:

Raypath Resources Ltd. v. Toronto-Domin­ion Bank (1996), 184 A.R. 125; 122 W.A.C. 125 (C.A.), affing. (1995), 170 A.R. 109 (Q.B.), refd to. [para. 13].

Wallace v. United Grain Growers Ltd. (1997), 219 N.R. 161; 123 Man.R.(2d) 1; 159 W.A.C. 1 (S.C.C.), refd to. [para. 77].

Royal Bank of Canada v. Got (W.) Associ­ates Electric Ltd. et al. (1997), 196 A.R. 241; 141 W.A.C. 241 (C.A.), affing. [1994] 5 W.W.R. 337; 150 A.R. 93 (Q.B.), refd to. [para. 77].

Bank of Nova Scotia v. Dunphy Leasing Enterprises Ltd. (1991), 120 A.R. 241; 8 W.A.C. 241; 83 Alta. L.R.(2d) 289 (C.A), refd to. [para. 77].

Murano v. Bank of Montreal (1995), 20 B.L.R.(2d) 61 (Ont. Gen. Div.), refd to. [para. 77].

Canadian Imperial Bank of Commerce v. Quesnel Machinery Ltd. (1985), 62 C.B.R. 91 (B.C.S.C.), refd to. [para. 78].

Whonnock Industries Ltd. v. National Bank of Canada (1987), 67 C.B.R. 179 (B.C.C.A.), refd to. [para. 78].

Botiuk v. Bardyn et al., [1995] 3 S.C.R. 3; 186 N.R. 1; 85 O.A.C. 81; 126 D.L.R.(4th) 609, refd to. [para. 96].

Horrocks v. Lowe, [1975] A.C. 135 (H.L.), refd to. [para. 96].

Vorvis v. Insurance Corporation of British Columbia, [1989] 1 S.C.R. 1085; 94 N.R. 321; 58 D.L.R.(4th) 193; [1989] 4 W.W.R. 218; 36 B.C.L.R.(2d) 273; 90 C.L.L.C. 14,035; 25 C.C.E.L. 81, refd to. [para. 119].

Jackson and Parkview Holdings Ltd. v. Trimac Industries Ltd. et al. (1993), 138 A.R. 161; 8 Alta. L.R.(3d) 403 (Q.B.), refd to. [para. 122].

Mister Broadloom Corp. (1968) Ltd. v. Bank of Montreal (1983), 1 O.A.C. 52; 44 O.R.(2d) 368 (C.A.), reving. (1979), 25 O.R.(2d) 198 (H.C.), refd to. [Appen­dix].

Ronald Elwyn Lister Ltd. v. Dunlop Canada Ltd., [1982] 1 S.C.R. 726; 42 N.R. 181, refd to. [Appendix].

Sidorsky et al. v. CFCN Communications Ltd. et al. (1994), 158 A.R. 161 (Q.B.), refd to. [Appendix].

R.G-H. and W.G-H. v. Christison et al., [1997] 1 W.W.R. 641; 150 Sask.R. 1 (Q.B.), refd to. [Appendix].

Moises v. Canadian Newspaper Co., [1997] 1 W.W.R. 337; 76 B.C.A.C. 263; 125 W.A.C. 263 (C.A.), refd to. [Appen­dix].

418215 Ontario Ltd. v. Canadian Uniform Ltd. et al. (1997), 35 O.T.C. 177 (Gen. Div.), refd to. [Appendix].

Hill v. Church of Scientology of Toronto and Manning, [1995] 2 S.C.R. 1130; 184 N.R. 1; 84 O.A.C. 1; 126 D.L.R.(4th) 129, refd to. [Appendix].

Wagner and Ksiazek v. Lim (1994), 158 A.R. 241 (Q.B.), refd to. [Appendix].

O'Malley v. O'Callaghan et al. (1992), 128 A.R. 28 (Q.B.), refd to. [Appendix].

Sapiro v. Leader Publishing Co. [1926] 2 W.W.R. 268, refd to. [Appendix].

Halls v. Mitchell, [1928] 2 D.L.R. 97 (S.C.C.), refd to. [Appendix].

Royal Bank of Canada v. Sparrow Electric Corp., [1997] 1 S.C.R. 411; 208 N.R. 161; 193 A.R. 321; 135 W.A.C. 321, refd to. [Appendix].

Athey v. Leonati et al., [1996] 3 S.C.R. 458; 203 N.R. 36; 81 B.C.A.C. 243; 132 W.A.C. 243, refd to. [Appendix].

Penvidic Contracting Co. v. International Nickel Co. of Canada Ltd., [1976] 1 S.C.R. 267; 4 N.R. 1; 53 D.L.R.(3d) 748, refd to. [Appendix].

Olson v. New Home Certification Program of Alberta (1986), 69 A.R. 356 (Q.B.), refd to. [Appendix].

Moore v. Edmonton (City) et al. (1997), 202 A.R. 81 (Q.B.), refd to. [Appendix].

Ares v. Venner, [1970] S.C.R. 608, refd to. [Appendix].

R. v. Khan, [1990] 2 S.C.R. 531; 113 N.R. 53; 41 O.A.C. 353; 59 C.C.C.(3d) 92; 79 C.R.(3d) 1, refd to. [Appendix].

Canadian Pacific Railway v. Calgary (City), [1971] 4 W.W.R. 241 (Alta. C.A.), refd to. [Appendix].

R. v. Monkhouse (1988), 83 A.R. 62; 56 Alta. L.R.(2d) 97 (C.A.), refd to. [Ap­pendix].

Barclay Construction Corp. v. Bank of Montreal (1989), 65 D.L.R.(4th) 213 (B.C.C.A.), refd to. [Appendix].

Kavcar Investments Ltd. v. Aetna Finan­cial Services Ltd. and Coopers Lybrand (1989), 35 O.A.C. 305; 70 O.R.(2d) 225 (C.A.), refd to. [Appendix].

Toogood v. Sprying (1834), 1 C.M. & R. 181; 149 E.R. 1044 (Exch.), refd to. [Appendix].

Adam v. Ward, [1917] A.C. 309 (H.L.), refd to. [Appendix].

Sun Life Assurance Co. of Canada v. Dalrymple, [1965] S.C.R. 302, refd to. [Appendix].

Pleau v. Simpsons-Sears Ltd. (1977), 15 O.R.(2d) 436 (C.A.), refd to. [Appendix].

Greenan v. Minneapolis Threshing Machine Co. (1929), 24 Alta. L.R. 274 (C.A.), refd to. [Appendix].

Netupsky v. Craig, [1973] S.C.R. 55, refd to. [Appendix].

Horrocks v. Rowe, [1974] 2 W.L.R. 282 (H.L.), refd to. [Appendix].

Authors and Works Noticed:

Brown, Raymond E., The Law of Defama­tion in Canada (2nd Ed. 1994), pp. 1-15, 16-29 to 16-30 [para. 96]; 25-10 [Appen­dix].

Sopinka and Lederman, The Law of Evi­dence in Civil Cases, pp. 515, 516 [Ap­pendix].

Waddams, The Law of Damages, pp. 13-1 to 13-3 [Appendix].

Counsel:

K.D. Wakefield and K. Burt (Milner Fen­erty), for the plaintiffs;

A.H. Lefever and C. Killick-Dzenick (Reynolds, Mirth, Richards & Farmer), for the defendants.

This action was heard before Binder, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following decision on January 8, 1998.