Royal Bank of Canada v. Speight, 2006 NSSC 151

• Judge: Robertson, J.
• Court: Supreme Court of Nova Scotia (Canada)
• Case Date: December 21, 2005
• Jurisdiction: Nova Scotia
• Citations: 2006 NSSC 151;(2006), 243 N.S.R.(2d) 391 (SC)

Royal Bk. v. Speight (2006), 243 N.S.R.(2d) 391 (SC);

    772 A.P.R. 391

MLB headnote and full text

Temp. Cite: [2006] N.S.R.(2d) TBEd. MY.011

Royal Bank of Canada (plaintiff/defendant by counterclaim) v. Wayne Speight and Ronalda Speight (defendants/plaintiffs by counterclaim)

(SH 251572; 2006 NSSC 151)

Indexed As: Royal Bank of Canada v. Speight

Nova Scotia Supreme Court

Robertson, J.

May 16, 2006.

Summary:

The Royal Bank of Canada sued the Speights as guarantors of an operating loan agreement with a company that had gone out of business. The Speights filed a defence and counterclaim in negligence. The bank sought summary judgment.

The Nova Scotia Supreme Court granted summary judgment for the bank. The Speights were entitled to proceed with their negligence claim.

Guarantee and Indemnity - Topic 2665

Discharge and other defences of surety - Acts of creditor - Acts affecting surety's risk - Roadmaster had an operating loan agreement with the Royal Bank of Canada - The Speights signed a guarantee - In February 2005, the bank put Roadmaster's chequing account on deposit only status and failed to honour cheques - Roadmaster went out of business - In July 2005, the bank demanded payment of $68,673.15 and sued the Speights on the guarantee - The Speights filed a defence and counterclaim in negligence, alleging a material alteration of risk arising from the bank's failure to give notice of the change in Roadmaster's account status - The bank sought summary judgment - The Nova Scotia Supreme Court granted summary judgment for the bank - The defence had not raised an arguable issue for trial - There was no suggestion of deceit or that the Speights were misled or wrongfully induced to sign the guarantee - Apart from the insufficient notice argument, the defence did not disclose any subsequent material alteration in the contract that would release the Speights - Regarding notice, some months had passed between the change to deposit only status and the bank's demands for payment - See paragraphs 23 to 31.

Practice - Topic 5706

Judgments and orders - Summary judgments - Counterclaim or set-off - Roadmaster had an operating loan agreement with the Royal Bank of Canada - The Speights signed a guarantee - In February 2005, the bank put Roadmaster's chequing account on deposit only status and failed to honour cheques - Roadmaster went out of business - In July 2005, the bank demanded payment of $68,673.15 and sued the Speights on the guarantee - The Speights filed a defence and counterclaim in negligence, alleging a material alteration of risk arising from the bank's failure to give notice of the change in Roadmaster's account status - The bank sought summary judgment - The Nova Scotia Supreme Court granted summary judgment for the bank - To make a finding respecting the sufficiency of the Speights' defence, it was necessary to consider the degree of connection between the claims - The causes of action were more distinct than those where a claim and counterclaim arose out of a single contract - It was not manifestly unjust to require the Speights to honour their guarantee before the counterclaim came to trial - See paragraphs 17 to 22.

Cases Noticed:

Purdy v. Fulton Ins. Agencies (1991), 105 N.S.R.(2d) 421; 284 A.P.R. 421; 1991 CarswellNS 74 (C.A.), refd to. [para. 17].

Telford v. Holt (1987), 78 N.R. 321; 81 A.R. 385; 46 R.P.R. 234; 41 D.L.R.(4th) 385; 37 B.L.R. 241 (S.C.C.), refd to. [para. 20].

Singer v. Sommex Maritime Ltd. (1996), 148 N.S.R.(2d) 118; 429 A.P.R. 118 (S.C.), refd to. [para. 21].

Pax Management Ltd. et al. v. Canadian Imperial Bank of Commerce (1992), 141 N.R. 324; 15 B.C.A.C. 81; 27 W.A.C. 81; 1992 CanLII 27 (S.C.C.), refd to. [para. 23].

Manulife Bank of Canada v. Conlin et al. (1996), 203 N.R. 81; 94 O.A.C. 161; 1996 CanLII 182 (S.C.C.), refd to. [para. 23].

Bauer v. Bank of Montreal, [1980] 2 S.C.R. 102; 32 N.R. 191; 110 D.L.R.(3d) 424, refd to. [para. 25].

Royal Bank of Canada v. Nobes (1982), 49 N.S.R.(2d) 634; 96 A.P.R. 634 (C.A.), refd to. [para. 27].

Authors and Works Noticed:

Chitty on Contracts (24th Ed. 1977), vol. 1, p. 362, para. 813 [para. 26].

Counsel:

James Rossiter, for the plaintiff/defendant by counterclaim;

Michael J. O'Hara, for the defendants/plaintiffs by counterclaim.

This application was heard on December 21, 2005, in Halifax, Nova Scotia, by Robertson, J., of the Nova Scotia Supreme Court, who delivered the following written decision on May 16, 2006.