Rebel Heart Water Hauling Ltd. v. Southside Equipment Sales Ltd., 2003 ABQB 226

JudgeWatson, J.
CourtCourt of Queen's Bench of Alberta (Canada)
Case DateMarch 10, 2003
Citations2003 ABQB 226;(2003), 337 A.R. 286 (QB)

Rebel Heart Water v. Equipment Sales (2003), 337 A.R. 286 (QB)

MLB headnote and full text

Temp. Cite: [2003] A.R. TBEd. MR.067

Rebel Heart Water Hauling Ltd. (plaintiff) v. Southside Equipment Sales Ltd. (defendant) and Kylan Edward Cody, K.C. Trucking Ltd., Robert James Whittaker and Jean Victoria Whittaker (third parties)

(No. 0003 13895; 2003 ABQB 226)

Indexed As: Rebel Heart Water Hauling Ltd. v. Southside Equipment Sales Ltd.

Alberta Court of Queen's Bench

Judicial District of Edmonton

Watson, J.

March 10, 2003.

Summary:

The Whittakers loaned Cody money to purchase a truck subject to a security agreement. Cody sold the truck to Southside Equipment Sales Ltd., allegedly having told Southside that the truck was clear of financial encumbrances. Southside sold the truck to Rebel Heart Water Hauling Ltd. The Whittakers seized the truck pursuant to their security agreement. Rebel Heart paid the Whittakers over $16,000 to buy out their claim. Rebel Heart commenced an action against Southside. Southside filed a defence and commenced third party proceedings against the Whittakers, claiming that it was unaware of the encumbrance and did not find the encumbrance when it did a serial number search of the Personal Property Registry. The Whittakers sought to quash the third party notice, claiming that it disclosed no cause of action (rule 129(1)(a)), or alternatively they should be granted summary judgment (rule 159(2)).

The Alberta Court of Queen's Bench struck the third party notice.

Personal Property - Topic 6083

Security interests - Registration - Validity of - Serial numbers - [See first Practice - Topic 1138 ].

Practice - Topic 1138

Parties - Third party or subsequent party procedure - Third party notice - Striking out of - The Whittakers loaned Cody money to purchase a truck - The Whittakers registered a security agreement but there was a mistake in the serial number - Cody sold the truck to Southside which in turn sold the truck to Rebel Heart - The Whittakers seized the truck - Rebel Heart paid the Whittakers over $16,000 to buy out their claim - Rebel Heart sued Southside - Southside filed a defence and commenced third party proceedings against the Whittakers, claiming that it did not find the encumbrance when it did a serial number search of the Personal Property Registry because of the error in the serial number - The Whittakers sought to quash the third party notice - The Alberta Court of Queen's Bench struck the third party notice - The court held that there was no triable issue as between Southside and the Whittakers as to the validity and efficacy of the Whittakers' registration and its priority over Southside - A reasonable researcher of the registry would have learned of the Whittakers' security agreement to the degree necessary to make further inquiries - The court held further that the error in the registration did not give rise to an action in negligence - See paragraphs 1 to 81.

Practice - Topic 1138

Parties - Third party or subsequent party procedure - Third party notice - Striking out of - The plaintiffs sued the defendants and the defendants issued a third party notice - The third parties filed a statement of defence on February 16, 2001 and on July 18, 2001, filed a notice to admit facts - The defendant filed a reply to the notice to admit facts on August 16, 2001 - On December 13, 2002, the third party filed a notice of motion seeking either to quash the third party notice or to be granted summary judgment - The defendants raised rule 68 which provided that "a third party may at any time before he defends ... move to set the notice aside" - The Alberta Court of Queen's Bench held that there would be no prejudice to the defendant if the court adjusted the strictures of rule 68 and allowed the third party to invoke the rule, notwithstanding that the third party had filed a statement of defence - See paragraphs 28 to 41.

Torts - Topic 3

Negligence - What constitutes a negligence action - [See first Practice - Topic 1138 ].

Cases Noticed:

Herr et al. v. Herr (1991), 121 A.R. 176 (Q.B.), refd to. [para. 29, footnote 3].

Alberta Energy Co. v. Daniel Industries Inc. et al. (1989), 100 A.R. 74 (C.A.), refd to. [para. 31, footnote 4].

Leoppky v. McWilliams (2001), 281 A.R. 281; 248 W.A.C. 281 (C.A.), refd to. [para. 31, footnote 5].

Metz v. Breland et al. (1990), 110 A.R. 25 (C.A.) refd to. [para. 32, footnote 6].

Queen (D.J.) v. Cognos Inc., [1993] 1 S.C.R. 87; 147 N.R. 169; 60 O.A.C. 1, refd to. [para. 33, footnote 7].

Hercules Management Ltd. et al. v. Ernst & Young et al. (1997), 211 N.R. 352; 115 Man.R.(2d) 241; 139 W.A.C. 241 (S.C.C.), refd to. [para. 33, footnote 8].

Donoghue v. Stevenson , [1932] A.C. 562 (H.L.), refd to. [para. 34, footnote 9].

Canada (Attorney General) v. Stahl, [1999] A.R. Uned. 252 (Q.B.), refd to. [para. 46, footnote 12].

Allied-Signal Inc. v. Dome Petroleum Ltd. et al. (1991), 122 A.R. 321 (Q.B.), refd to. [para. 46, footnote 13].

Northland Bank v. Willson et al., [1997] A.J. No. 274 (Q.B.), refd to. [para. 47, footnote 14].

Canada Deposit Insurance Corp. et al. v. Prisco et al. (1994), 158 A.R. 305 (Q.B.), refd to. [para. 48, footnote 16].

Northland Bank (Liquidation) et al. v. Willson et al. (1998), 233 A.R. 341 (Q.B.), refd to. [para. 48, footnote 17].

Northland Bank (Liquidation) v. Hongkong Bank of Canada (1991), 120 A.R. 296; 8 W.A.C. 296 (C.A.), refd to. [para. 48, footnote 18].

V.A.H. v. Lynch et al. (2000), 255 A.R. 359; 220 W.A.C. 359 (C.A.), refd to. [para. 48, footnote 19].

Ghermezian v. Corey Developments Inc. et al. (2001), 302 A.R. 47 (Q.B.), refd to. [para. 49, footnote 20].

Auctioneers' Association of Alberta v. Hunter (2002), 309 A.R. 290 (Q.B. Master), refd to. [para. 50, footnote 21].

North Sun Mortgage Corp. v. Crossley, [2002] A.R. Uned. 74 (Q.B. Master), refd to. [para. 50, footnote 22].

Canadian Western Bank v. 612284 Alberta Ltd. et al., [2003] A.R. Uned. 78 (Q.B. Master), refd to. [para. 50, footnote 23].

Huppertz v. Hemmerling Estate et al. (2003), 320 A.R. 306; 288 W.A.C. 306 (C.A.), refd to. [para. 50, footnote 24].

Buchan v. Saskatchewan Government Insurance (1997), 161 Sask.R. 47 (Q.B.), refd to. [para. 53, footnote 25].

General Motors Acceptance Corp. of Canada Ltd. v. Trans Canada Credit Corp. (1994), 147 A.R. 333 (Q.B. Master), refd to. [para. 53, footnote 29].

Caisse Horizon Credit Union Ltd. v. 528740 Alberta Ltd. et al. (1996), 182 A.R. 360 (Q.B. Master), refd to. [para. 53, footnote 30].

Case Power & Equipment v. 366551 Alberta Inc. (Receivership) (1994), 157 A.R. 212; 77 W.A.C. 212 (C.A.), refd to. [para. 54, footnote 31].

Elmcrest Furniture Manufacturing Ltd. v. Price Waterhouse Ltd. (1985), 41 Sask.R. 125; 5 P.P.S.A.C. 22 (Q.B.), refd to. [para. 55].

Miller, McClelland Ltd. v. Barrhead Savings and Credit Union Ltd. (1995), 165 A.R. 106; 89 W.A.C. 106 (C.A.), refd to. [para. 56, footnote 32].

Primus Automotive Financial Services Canada Ltd. v. Kirkby (Bankrupt) (1998), 213 A.R. 208 (Q.B.), refd to. [para. 57, footnote 33].

General Motors Acceptance Corp. of Canada Ltd. v. Trans Canada Credit Corp. (1994), 147 A.R. 333 (Q.B. Master), refd to. [para. 58, footnote 35].

Alberta Treasury Branches v. Triathlon Vehicle Leasing (1992), 134 A.R. 100 (Q.B.), refd to. [para. 58, footnote 36].

Paquette (Bankrupt), Re (1994), 152 A.R. 286 (Q.B.), refd to. [para. 58, footnote 37].

Anns v. Merton London Borough Council, [1978] A.C. 728 (H.L.), refd to. [para. 62, footnote 38].

Nielsen v. Kamloops (City) and Hughes (1984), 54 N.R. 1 (S.C.C.), refd to. [para. 62, footnote 39].

Watkins v. Olafson et al. (1989), 100 N.R. 161; 61 Man.R.(2d) 81 (S.C.C.), refd to. [para. 64, footnote 40].

Wallace v. United Grain Growers Ltd., [1997] 3 S.C.R. 701; 219 N.R. 161; 123 Man.R.(2d) 1; 159 W.A.C. 1, refd to. [para. 64, footnote 41].

Bow Valley Husky (Bermuda) Ltd. et al. v. Saint John Shipbuilding Ltd. et al. (1997), 221 N.R. 1; 158 Nfld. & P.E.I.R. 269; 490 A.P.R. 269 (S.C.C.), refd to. [para. 64, footnote 42].

Viridian Inc. v. Dresser Canada Inc. et al. (2002), 312 A.R. 93; 281 W.A.C. 93 (C.A.), refd to. [para. 66, footnote 44].

Hunt v. T & N plc et al. (1990), 117 N.R. 321 (S.C.C.), refd to. [para. 68, footnote 45].

Edwards et al. v. Law Society of Upper Canada et al. (2001), 277 N.R. 145; 153 O.A.C. 388 (S.C.C.), refd to. [para. 71, footnote 46].

Cooper v. Registrar of Mortgage Brokers (B.C.) et al. (2001), 277 N.R. 113; 160 B.C.A.C. 268; 261 W.A.C. 268 (S.C.C.), refd to. [para. 71, footnote 47].

Cooper v. Hobart et al. - Cooper v. Registrar of Mortgage Brokers (B.C.) et al.

Agrium Inc. et al. v. Chubb Insurance Co. of Canada et al. (2002), 318 A.R. 355 (Q.B.), refd to. [para. 71, footnote 48].

Statutes Noticed:

Rules of Court (Alta.), rule 68 [para. 28]; rule 129(1)(a) [para. 68]; rule 159(2) [para. 49].

Authors and Works Noticed:

Cuming, Ronald C.C., and Wood, Roderick J., Alberta Personal Property Security Act Handbook (4th Ed. 1998), pp. 396 to 417 [paras. 53, 75, footnotes 26, 49].

Stevenson, W.A., and Côté, J.E., Civil Procedure Guide (1996), p. 716 [para. 45, footnote 11].

Stevenson, W.A., and Côté, J.E., Alberta Civil Procedure Handbook (2000), p. 125 [para. 45, footnote 11].

Counsel:

Geoffrey N.W. Edgar (Witten LLP), for the plaintiff;

Michael G. Bates, Scott Hall, student-at-law, for the defendant/respondent;

Douglas G. Young, for the third party, K.C. Trucking Ltd. (did not participate in this motion);

Brent W. Mielke (Shtabsky & Tussman), for the third parties, Robert James Whittaker and Jean Victoria Whittaker, applicants.

This application was heard before Watson, J., of the Alberta Court of Queen's Bench, Judicial District of Edmonton, who delivered the following judgment on March 10, 2003.

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