Royal Bank of Canada v. 4445211 Manitoba Ltd. et al., 2015 SKQB 261

• Judge: Danyliuk, J.
• Court: Court of Queen's Bench of Saskatchewan (Canada)
• Case Date: September 01, 2015
• Jurisdiction: Saskatchewan
• Citations: 2015 SKQB 261;(2015), 483 Sask.R. 149 (QB)

Royal Bk. v. 4445211 Man. (2015), 483 Sask.R. 149 (QB)

MLB headnote and full text

Temp. Cite: [2015] Sask.R. TBEd. OC.033

Royal Bank of Canada (plaintiff) v. 4445211 Manitoba Ltd., Kellie Damphousse, Raymond Damphousse, Kathleen Litton, Ryan Litton and 6538399 Manitoba Ltd. (defendants)

(2015 Q.B.G. No. 1648; 2015 SKQB 261)

Indexed As: Royal Bank of Canada v. 4445211 Manitoba Ltd. et al.

Saskatchewan Court of Queen's Bench

Judicial Centre of Saskatoon

Danyliuk, J.

September 1, 2015.

Summary:

The plaintiff bank sued the defendants for monies owing under a demand loan and a line of credit. The plaintiff also sued the guarantors of the two debts. The defendants filed one statement of defence. The defendants admitted the line of credit and demand loan, but disputed the amounts owing and argued that the plaintiff agreed to renegotiate and rewrite the terms of the loans to permit repayment over a number of years. The plaintiff brought two applications to strike the statement of defence: one on the ground that it failed to disclose a reasonable cause of defence and the second on the ground that it was frivolous, vexatious and/or an abuse of the court's process. The defendants argued that as statutory mandatory mediation had not occurred, the court had no jurisdiction to hear the applications.

The Saskatchewan Court of Queen's Bench allowed the applications and struck the statement of defence as failing to disclose a reasonable cause of defence and as being frivolous, vexatious and/or an abuse of process. The requirement of statutory mandatory mediation did not preclude an application to strike the statement of defence. The issue of the amount owing was sent to a Registrar for a reference.

Contracts - Topic 3502

Performance or breach - Obligation to perform - Good faith - Exercise of - The plaintiff sued the defendants for monies owing under a demand loan and line of credit - Some defendants gave personal guarantees - The defendants filed a single statement of defence - Although they admitted the loan and line of credit, they disputed the amount owing - The defence was a dispute of the amount owing and the plaintiff's failure to renegotiate new terms that would allow the defendants a longer time of repay - The Saskatchewan Court of Queen's Bench struck the statement of defence as failing to disclose a reasonable cause of defence and as being frivolous, vexatious and/or an abuse of process - The dispute of the amount owing was not a defence - The amount could be determined by a reference - The common law duty to act honestly and in good faith applied to the plaintiff's exercise of its contractual duty, but did not apply to negotiations to extinguish or vary those same duties - The plaintiff did not contractual bind itself to renegotiate payment of the amounts owing if the defendants defaulted - The common law duty did not eliminate a party's self-interest in acting pursuant to a contract - The defendants did not allege a lie or intentional dishonesty by the plaintiff - See paragraphs 22 to 47.

Practice - Topic 2210

Pleadings - Striking out pleadings - Time for objection or application - [See Practice - Topic 2243 ].

Practice - Topic 2230

Pleadings - Striking out pleadings - Grounds - Failure to disclose a cause of action or defence - [See Contracts - Topic 3502 ].

Practice - Topic 2231

Pleadings - Striking out pleadings - Grounds - False, frivolous, vexatious or scandalous - [See Contracts - Topic 3502 ].

Practice - Topic 2243

Pleadings - Striking out pleadings - Bars - General (incl. mandatory mediation) - The plaintiff sued the defendants for monies owing under a demand loan and line of credit - The loans were personally guaranteed by some of the defendants - The defendants filed a single statement of defence - The plaintiff brought two applications to strike the statement of defence: one on the ground that it failed to disclose a reasonable cause of defence and the second on the ground that it was frivolous, vexatious and/or an abuse of the court's process - The defendants argued that as statutory mandatory mediation had not occurred, the court had no jurisdiction to hear the applications - The Saskatchewan Court of Queen's Bench held that the requirement of statutory mandatory mediation did not preclude the applications - The court stated that "This is a circumstance where it is appropriate that these applications proceed prior to mediation. These applications may well be dispositive of the action. The parties are already aware of alternate dispute resolution options; indeed that is central to the defendants' position. Given the purpose of Rule 7-9 of The Queen's Bench Rules , the mandatory mediation provisions ought not to delay the plaintiff." - See paragraphs 7 to 11.

Counsel:

Nolan J. Dooley, for the plaintiff;

T. Joshua Morrison, for the respondents.

These applications were heard before Danyliuk, J., of the Saskatchewan Court Of Queen's Bench, Judicial District of Saskatoon, who delivered the following judgment on September 1, 2015.