Independent Wholesale Ltd. v. Steinke and 418452 Alberta Ltd., (1996) 180 A.R. 58 (QBM)

• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: February 05, 1996
• Citations: (1996), 180 A.R. 58 (QBM)

Independent Wholesale Ltd. v. Steinke (1996), 180 A.R. 58 (QBM)

MLB headnote and full text

Independent Wholesale Ltd. (plaintiff) v. Rob Steinke and 418452 Alberta Ltd. (defendants)

(Action No. 9503-20134)

Indexed As: Independent Wholesale Ltd. v. Steinke and 418452 Alberta Ltd.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Funduk, Master in Chambers

February 5, 1996.

Summary:

Steinke was the sole principal of a com­pany that owed the plaintiff $22,557.13. The plaintiff demanded payment. An agreement was reached whereby the company was given time to pay ($1,000 per month) and Stein­ke executed a promissory note for the full amount, making him co-extensively liable. The company defaulted and was now out of business. The plaintiff applied for summary judgment against Steinke on the promissory note.

A Master of the Alberta Court of Queen's Bench granted summary judgment for the amount of the missed payments as of the date the action was commenced.

Contracts - Topic 1602

Formation of contract - Mistake, misun­derstanding or misrepresentation - Non est factum - Bar - Carelessness or negligence - A Master of the Alberta Court of Queen's Bench stated that "where the creditor is (1) an innocent party, whether 'second' or 'third', and (2) the signatory was careless in signing the document, and (3) the credi­tor relied on that document to do or not do something, the signatory is precluded from relying on a defence of non est factum." - See paragraph 74.

Contracts - Topic 2861

Consideration - What constitutes - Steinke was the sole principal of a company that owed the plaintiff $22,557.13 - The plain­tiff demanded payment - An agreement was reached whereby the company was given time to pay ($1,000 per month) and Steinke executed a promissory note for the full amount - Steinke pleaded that there was no consideration - A Master of the Alberta Court of Queen's Bench held that there was consideration - The Master stated that "consideration need not flow to the promisor. All that is necessary is that there be consideration by the promisee. ... The company is given time to pay a due debt. Giving a debtor time to pay a due debt can be consideration. ... Third, an antecedent debt or liability of a third party can be valuable consideration for a note." - See paragraphs 8 to 21.

Negotiable Instruments - Topic 6065

Promissory notes - Requirements of - Independent legal advice - Steinke was the sole principal of a company that owed the plaintiff $22,557.13 - The plaintiff demanded payment - An agreement was reached whereby the company was given time to pay ($1,000 per month) and Steinke executed a promissory note for the full amount - Steinke pleaded that the note was invalid where he was not advised to obtain independent legal advice - A Mas­ter of the Alberta Court of Queen's Bench stated that "it cannot be said as a matter of law that just because an accommodation maker is a surety he should be told to get independent legal advice" - Steinke was "careless in signing the note if he did not 'appreciate' what he was doing" - See paragraphs 29 to 80.

Negotiable Instruments - Topic 7450

Promissory notes - Consideration - Suffi­ciency - Debt of another - [See Contracts - Topic 2861 ].

Negotiable Instruments - Topic 7701

Promissory notes - Defences - General - Steinke was the sole principal of a com­pany that owed the plaintiff $22,557.13 - The plaintiff demanded payment - An agreement was reached whereby the com­pany was given time to pay ($1,000 per month) and Steinke executed a promissory note for the full amount - Steinke pleaded that the note was in sub­stance a guarantee and invalid for noncompliance with the Guarantees Ac­knowledgment Act - A Master of the Alberta Court of Queen's Bench held that the Act did not apply to an accommoda­tion maker of a promissory note - See paragraphs 22 to 27.

Negotiable Instruments - Topic 8303

Promissory notes - Payment - Acceler­ation of debt - A promissory note calling for payment of the debt in monthly instal­ments did not contain an acceleration clause - Accordingly, the full amount was not due on default - A debtor defaulted - The creditor sued and sought summary judgment for the full amount owing on the note - A Master of the Alberta Court of Queen's Bench held that the lack of an acceleration clause limited the creditor to summary judgment for the missed pay­ments as of the date the action was com­menced - See paragraphs 81 to 88.

Cases Noticed:

Bank of Montreal v. Danial and Danial (1983), 46 A.R. 64 (Q.B. Master), refd to. [para. 9].

Pae On v. Lau Yiu Long, [1980] A.C. 614 (P.C.), refd to. [para. 9].

Couldery v. Bartrum (1881), 19 Ch. D. 394 (C.A.), refd to. [para. 11].

J.D.F. Builders et al. v. Albert Pearl (Management) Ltd., [1975] 2 S.C.R. 846; 3 N.R. 215; 49 D.L.R.(3d) 422, refd to. [para. 11].

Bank of British Columbia v. Turbo Resources Ltd. (1983), 46 A.R. 22 (C.A.), refd to. [para. 13].

Mollot v. Monette and Mollot (1981), 39 N.R. 451; 128 D.L.R.(3d) 577 (S.C.C.), refd to. [para. 14].

Alberta (Treasury Branches) v. Bate (1996), 180 A.R. 161 (Q.B. Master), refd to. [para. 22].

Alberta Agricultural Development Corp. v. Tiny Tym's Poultry Ltd. et al. (1989), 97 A.R. 321 (Q.B.), dist. [para. 26].

Canadian Imperial Bank of Commerce v. 3L Trucking Ltd. et al. (1993), 147 A.R. 146 (Q.B.), refd to. [para. 32].

Canadian Imperial Bank of Commerce v. 3L Trucking Ltd. et al. (1995), 165 A.R. 96; 89 W.A.C. 96 (C.A.), refd to. [para. 34].

Canadian Imperial Bank of Commerce v. 3L Trucking Ltd. et al. (1995), 176 A.R. 245 (Q.B.), refd to. [para. 34].

Hongkong Bank of Canada v. 414577 Alberta Ltd. and Fife (1995), 167 A.R. 321 (Q.B. Master), refd to. [para. 37].

Lloyds Bank v. Bundy, [1975] Q.B. 326 (C.A.), refd to. [para. 38].

National Westminster Bank v. Morgan, [1985] 1 A.C. 686 (H.L.), refd to. [para. 38].

MacKay v. Bank of Nova Scotia et al. (1994), 20 O.R.(3d) 698 (Gen. Div.), refd to. [para. 38].

Bank of Montreal v. Featherstone, Cooke and Cross et al. (1989), 33 O.A.C. 377; 58 D.L.R.(4th) 567 (C.A.), refd to. [para. 58].

Marvco Color Research Ltd. v. Harris and Harris, [1982] 2 S.C.R. 774; 45 N.R. 302; 141 D.L.R.(3d) 577, refd to. [para. 61].

Saunders v. Anglia Building Society, [1971] A.C. 1004 (H.L.), refd to. [para. 65].

Canadian Imperial Bank of Commerce v. Chang, Kim and Noah Trading Co. (1995), 64 A.R. 56; 40 Alta. L.R.(2d) 315 (Q.B.), refd to. [para. 69].

Royal Bank of Canada v. Gill (1986), 6 B.C.L.R.(2d) 359 (S.C.), refd to. [para. 69].

Bank of Montreal v. McIntosh, [1995] 10 W.W.R. 726; 136 Sask.R. 89 (Q.B.), refd to. [para. 70].

Prudential Trust Co. v. Cugnet, [1956] S.C.R. 914, refd to. [para. 71].

Polish Combatants' Association Credit Union v. Moge (1980), 9 D.L.R.(4th) 60 (Man. C.A.), refd to. [para. 81].

Ashley v. Royal Bank of Canada (1984), 32 R.P.R. 275 (N.S.T.D.), refd to. [para. 82].

Counsel:

J.E.B. Johnston, for the plaintiff;

M.L. Engelking (Campbell & Co.), for the defendant, Rob Steinke.

This application was heard before Funduk, Master in Chambers, of the Alberta Court of Queen's Bench, Judicial District of Edmon­ton, who delivered the following judgment on February 5, 1996.