Paine (J.R.) and Associates Ltd. et al. v. Cairns et al., (1987) 82 A.R. 323 (QB)

• Judge: Andrekson, J.
• Court: Court of Queen's Bench of Alberta (Canada)
• Case Date: October 01, 1987
• Citations: (1987), 82 A.R. 323 (QB)

Paine & Assoc. Ltd. v. Cairns (1987), 82 A.R. 323 (QB)

MLB headnote and full text

J.R. Paine and Associates Ltd., 83460 Holdings Ltd. and J.R. Paine Holdings Ltd. v. Mary Anne Cairns, Solus Herbal Products Inc., Katherine Lodge Inc., Craig Cairns and Orville Neufeld

(No. 8703 06602)

Indexed As: Paine (J.R.) and Associates Ltd. et al. v. Cairns et al.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Andrekson, J.

October 1, 1987.

Summary:

On March 13, 1987, a company sued an employee for wrongful conversion of $330,000.00 in unaccounted for funds. The amount was later amended to $576,000.00. The company, believing that the employee and others intended to remove assets from the jurisdiction, obtained a variety of interlocutory orders. On March 13, 1987, the court enjoined the employee from disposing of her residence and from disbursing funds from two Canada Trust bank accounts. The court also ordered the attachment of all the employee's personal property. A second order issued that day froze all Canada Trust bank accounts standing in the employee's name. Pursuant to the writ of attachment, the sheriff seized chattels from the employee's home and one of her companies. On March 25, 1987, the company added two companies controlled by the employee as defendants. On March 27, 1987, an order was obtained to seal all Bank of Nova Scotia safety deposit boxes in the employee's name. On March 30, 1987, the company added the employee's son and common law husband as defendants. On the same date the company obtained a further order enjoining all financial institutions from dispensing any monies from accounts standing in the names of any of the defendants. A writ of attachment was issued against all the personal property of the son and common law husband. The company also obtained a preservation order under rule 467 against all property belonging to or registered in the name of any of the defendants. The employee applied for an order to set aside the various writs of attachment. All the defendants applied to set aside the March 30 order. The employee applied to set aside the March 13 and 27 orders. The company applied for a mareva injunction against all defendants to restrain the removal of any assets from the jurisdiction.

The Alberta Court of Queen's Bench rescinded the writs of attachment and the preservation order under rule 467. The court ordered that the March 13, 27 and 30 injunctions be continued, subject to the companies undertaking to indemnify the defendants should the injunctions be found to be improper. The court exercised its equitable jurisdiction and granted an injunction to prevent fraud on the court and on an adversary. The injunction restrained all the defendants from disposing of, encumbering or removing any assets from the jurisdiction. The court ordered the sheriff to continue to hold the previously seized assets pursuant to the injunction.

Creditors and Debtors - Topic 2624

Absconding debtors - Attachment of property - Conditions precedent - Intention to defraud - Rule 485 provided for writs of attachment respecting the property of absconding debtors - Rule 485 required the plaintiff to swear positively that the debtor intended to abscond, remove or conceal assets - The Alberta Court of Queen's Bench rescinded a writ of attachment on the ground that the affidavit in support of issuance of the writ provided only general evidence respecting the debtor's intention - The court stated that it was insufficient to depose merely that the debtor "may" dispose of assets - See paragraphs 35 to 42.

Creditors and Debtors - Topic 2625

Absconding debtors - Attachment of property - Conditions precedent - Claim for recovery of debt - Rule 485 provided for attachment of assets of an absconding debtor - Rule 485 applied only where the plaintiff's claim was for recovery of a debt - The Alberta Court of Queen's Bench held that "debt" required a sum certain or a sum readily ascertainable - The court held that a claim for conversion of monies was not a claim in debt, because it was a tort action where the quantum of damages must be proved - The court rescinded a writ of attachment issued under rule 485 - See paragraphs 20 to 31.

Creditors and Debtors - Topic 2627

Absconding debtors - Attachment of property - Conditions precedent - Corroborative evidence - Rule 485 provided for writs of attachment against the property of absconding debtors - In addition to the plaintiff's affidavit, rule 485 required a second affidavit by a person well acquainted with the debtor to corroborate that the debtor intended to abscond, had absconded, etc. - The Alberta Court of Queen's Bench held that the second affidavit could only be dispensed with by the court where such corroborative evidence existed notwithstanding the lack of the second affidavit - The court rescinded a writ of attachment where no such corroborative evidence existed and there was no second affidavit - See paragraphs 32 to 34.

Injunctions - Topic 1619

Interlocutory or interim injunctions - Preventing fraud on the court and on an adversary - A company brought an action against an employee and others for wrongful conversion of $576,000.00 in unaccounted for monies - The company had obtained interlocutory injunctions, writs of attachment and a preservation order against all the defendants to restrain the disposition, encumbrance or removal of assets from the jurisdiction - The Alberta Court of Queen's Bench held that where there was "substantial evidence" that the defendant employee defrauded or stole from the company, the court would grant an injunction to prevent fraud on the court and on an adversary - Pursuant to the injunction the court ordered that the defendants be restrained from disposing of, encumbering or removing any assets from the jurisdiction - The court also held that it had equitable jurisdiction under s. 13(2) of the Judicature Act to order the sheriff to continue to hold previously seized assets pursuant to the injunction - See paragraphs 61 to 72.

Injunctions - Topic 1683

Interlocutory or interim injunctions - Continuation of - Requirements - A plaintiff applied to continue several interlocutory injunctions - The defendant submitted that the plaintiff misled the court on several matters, therefore the injunctions should not be continued - The Alberta Court of Queen's Bench referred to the statement that "if there is less than full and accurate disclosure in a material way or if there is a misleading of the court on material facts in the original application, the court will not exercise its discretion in favour of the plaintiff and continue the injunction" - The court continued the injunctions where there was no evidence of the plaintiff misleading the court - See paragraphs 46 to 60.

Practice - Topic 3377

Interim proceedings - Preservation of property - When preservation order available - A preservation order was available under rule 467 only where there was a dispute as to title of specific property - The Alberta Court of Queen's Bench rescinded a preservation order granted to a plaintiff in a tort action for wrongful conversion of monies - The court held that the action did not involve a title dispute to specific property; money was not unique enough to require preservation in a specific form - See paragraphs 43 to 45.

Cases Noticed:

Lukian v. Shankoff, [1945] 1 W.W.R. 345 (Sask. K.B.), refd to. [para. 23].

Fitzgerald and Powell v. Warner (1912), 2 W.W.R. 299 (Sask. D.C.), refd to. [para. 23].

Meadow Lake Car Sales v. Michaud (1978), 17 A.R. 361; 7 Alta. C.R. 289 (D.C.), refd to. [para. 23].

Aetna Financial Services v. Fiegelman, [1985] 1 S.C.R. 2; 56 N.R. 241; 15 D.L.R.(4th) 161, appld. [para. 23].

Noble v. Lashbrook, [1918] 1 W.W.R. 919 (Sask. C.A.), refd to. [para. 26].

Connors v. Egli, [1923] 3 W.W.R. 999 (Alta. S.C.), refd to. [para. 27].

Larue v. Larue (1976), 2 A.R. 446 (S.C.T.D.), refd to. [para. 29].

In Re National Health (Whites Case), [1949] 1 W.W.R. 981, refd to. [para. 30].

Scott v. Mercantile Accident Insurance Company (1892), 8 T.L.R. 320 (Q.B.), refd to. [para. 45].

Amax Potash Ltd. v. Government of Saskatchewan, [1976] 6 W.W.R. 61; 11 N.R. 222 (S.C.C.), refd to. [para. 45].

Chitel v. Rothbart (1982), 141 D.L.R.(3d) 258 (Ont. C.A.), refd to. [para. 47].

Mills and Mills v. Petrovic (1980), 118 D.L.R.(3d) 367, consd. [para. 63].

Robert Reiser v. Nadore Food Processing (1977), 25 C.B.R.(N.S.) 162 (Ont. H.C.J.), refd to. [para. 64].

Fern Brand Waxes v. Pearl (1972), 29 D.L.R.(3d) 662 (Ont. C.A.), refd to. [para. 69].

Parmar Fisheries v. Parceria Maritima Esperanca L.D.A. (1982), 53 N.S.R.(2d) 338; 109 A.P.R. 338; 141 D.L.R.(3d) 498 (T.D.), refd to. [para. 71].

Z Ltd. v. A-Z, [1982] Q.B. 558, refd to. [para. 71].

Statutes Noticed:

Judicature Act, R.S.A. 1980, c. J-1, sect. 13(2) [para. 72].

Rules of Court (Alta.), rule 467 [para. 44]; rule 485 [para. 21].

Authors and Works Noticed:

Black's Law Dictionary [para. 31].

Counsel:

B. Zalmanowitz and N. Keeler, for the plaintiffs;

B.C. Scott, for the defendants, Mary Anne Cairns, Katherine Lodge Inc. and G. Woloszyn;

L.H. Merryweather, for the defendant Solus Herbal Products Inc.

These applications were heard before Andrekson, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following judgment on October 1, 1987: