COURT OF APPEAL FOR ONTARIO
BORINS, BLAIR and LAFORME JJ.A.
B E T W E E N :
BENDIX FOREIGN EXCHANGE CORP.
Evan L. Tingley for the appellant
Plaintiff (Appellant)
- and -
INTEGRATED PAYMENT SYSTEMS CANADA INC.
J. Alan Aucoin and Pauline W. Wong
for the respondent
Defendant (Respondent)
A N D B E T W E E N:
INTEGRATED PAYMENT SYSTEMS CANADA INC.
Plaintiff by Counterclaim
- and -
BENDIX FOREIGN EXCHANGE CORP., DRSHAN SIDHU (doing business as SIDHU CUSTOMER SERVICE) and DRSHAN SIDHU
Defendants by Counterclaim
HEARD: May 6, 2005
On appeal from the order of Justice Katherine E. Swinton of the Superior Court of Justice dated October 5, 2004.
BORINS J.A.:
1The appellant, Bendix Foreign Exchange Corp. (“Bendix”), appeals from a summary judgment granted pursuant to rule 76.07(9) of the Rules of Civil Procedure dismissing its claim against Integrated Payment Systems Canada Inc. (“IPS”). Bendix is a currency exchanger. IPS is an agent of Western Union and an issuer of money orders on its own behalf and on behalf of Western Union. Bendix had sold foreign exchange to a person that paid for them, in part, by 31 instruments bearing the title “Western Union Canadian Money Order” issued by IPS and/or Western Union, payable to Bendix each in the face amount of US $1,000 and bearing the signature “D. Sidhu”. The money orders had been stolen by Mr. Sidhu from IPS, for whom he was a money order agent doing business under the name Sidhu Customer Service. Bendix disclaimed knowledge of the theft.
2When Bendix, through its bank, presented the money orders to IPS for collection, IPS countermanded payment on the ground that they had been stolen by Mr. Sidhu. As a result, Bendix brought this action against IPS under the Simplified Procedure in Rule 76 of the Rules of Civil Procedure to recover the face value of the money orders. Its claim was based on the ground, as a payee of the money orders, that it was a holder in due course of the money orders within the meaning of s. 55 of the Bills Exchange Act, R.S.C. 1985, c. B-4, and was therefore entitled to recover their face value from IPS pursuant to s. 73 of the Act. This ground was based on the proposition that a money order is a bill of exchange within the meaning of s. 16(1) of the Act. The motion judge concluded that a money order is not a bill of exchange. Accordingly, she granted the summary judgment dismissing the appellant’s claim.
3There is very little Canadian jurisprudence defining the legal status of a money order in the contemporary world of commerce in which a money order is the commercial instrument of necessity for persons of modest means who do not have a bank account. It would appear to be the opinion of academic commentators that the courts have provided no authorative definition of money orders or bank drafts, which are referred to as remittance instruments as their purpose is that of a payment instrument. It has been suggested that the payee of a remittance instrument may have a claim to be regarded as a holder in due course so long as the payee gives value to the remitter. See, e.g., M. H. Ogilvie, Canadian Banking Law, 2nd ed. (Carswell, 1999) at pp. 728 and 731; Bradley Crawford, Crawford & Falconbridge – Banking & Bills of Exchange, 8th ed. (Canada Law Book: Toronto, 1986) at pp. 1005‑1007.
4We were not provided with any modern decisions of this court that legally defined a money order and, in particular, whether a money order is, or can become, a bill of exchange within the meaning of the Bills of Exchange Act. Because of the frequent use of money orders in the realm of commerce, particularly in the currency exchange business, counsel have submitted that it would be of assistance to the public, the bar and the bench if the court were to take this opportunity to define the status of a money order. Indeed, in his affidavit filed on behalf of the appellant, Mr. Holzberg, who has 22 years of experience in the currency exchange business, states that it is the custom and practice of the currency exchange business to treat money orders, bank drafts and certified cheques as equivalent to cash. He stated that if such instruments can be countermanded, it would defeat the purpose of money orders and render them the equivalent of uncertified personal cheques.
5While I agree with counsel that a judicial definition of a money order would be welcomed in the commercial community, I do not feel that the court is able to provide a definition on the basis of the record on this appeal. The modest record, in part, is a result of the strictures imposed by rule 76.04 which, inter alia, preclude cross‑examination of a deponent on an affidavit under rule 39.02 and the examination of a witness on a motion under rule 39.03 in proceedings under Rule 76.
6Because of the commercial importance of this issue, I feel that a judicial definition of a money order is best decided by a trial court which will have the benefit of a complete record, including any expert testimony on the subject that the parties may provide. This is not in any way intended to be a criticism of the motion judge who considered and applied the test for summary judgment under rule 76.07(9). In my view, had the motion judge been asked to decline summary judgment under rule 76.07(9)(b) on the ground that it would be in the interest of justice to have the legal status of a money order decided by a trial judge who would have the advantage of a complete record, she might well have granted that request. Although this is not a rule 21.01(1)(b) motion, matters of law which have not been fully settled or which have not had the benefit of contemporary judicial consideration ought not to be disposed of at the interlocutory stage of the proceedings: Spasic Estate v. Imperial Tobacco Inc. (2000), 2000 17170 (ON CA), 188 D.L.R. (4th) 577 at para. 23 (Ont. C.A.).
7I am satisfied that this is an appropriate course to apply rule 76.07(9)(b). As I have noted, the test for summary judgment under Rule 76 is in rule 76.07(9), which reads as follows:
(9) The presiding judge shall grant judgment on the motion unless,
(a) he or she is unable to decide the issues in the action without cross‑examination; or
(b) it would be otherwise unjust to decide the issues on the motion.
8Although there are a number of helpful Superior Court of Justice decisions that have considered rule 76.07(9)(b), as yet there is no decision of this court that has provided a discursive interpretation of this subrule. However, I find instructive the comments of this court in McGill v. Broadview Foundation (2001), 6 C.P.C. (5th) 109 (Ont. C.A.) at para. 4:
The purpose of rule 76.07 is to allow the parties to bring forward a relatively inexpensive application for summary judgment. Evidence to be considered includes the affidavits of the parties, any supporting material that can properly be placed before the court and the affidavits of witnesses. Summary judgment can only be granted when all of the evidence reviewed in total upon applying the principles of justice and fairness demonstrates a clear case wherein the motions judge may enter judgment. In circumstances where the case is not clear or where it dictates that justice and fairness would suggest otherwise, it is appropriate for the judge to refer the matter to trial [emphasis added].
This passage has been applied in many Superior Court decisions.
9As in McGill, it is my opinion that justice and fairness suggest that it is appropriate to refer this case to trial for the reasons that I have stated.
10In my view, this is not an appropriate case in which to embark upon an interpretation of the test for summary judgment in rule 76.07(9). Not only is it unnecessary to do so for the purpose of deciding the appeal, counsel did not have the opportunity of assisting us in this regard.
11I would note that counsel for the appellant did submit that the exceedingly brief endorsement of this court in Canadian Imperial Bank of Commerce v. Wong, [2000] O.J. No. 2547 is authority for the proposition that a consideration of whether there is a genuine issue for trial is part of the test for summary judgment under rule 76.07(9). It is not clear to us from the endorsement, however, whether the court’s reference to a genuine issue for trial was in relation to the Rule 20 appeal of the matter that was before it, or to the Rule 76 appeal of the matter before it. We think that this decision is best confined to the facts of the particular case.
12In the result, I would allow the appeal, set aside the summary judgment and order that this action proceed to trial. In the particular circumstances of this case I feel that it is appropriate that the parties bear their own costs of the motion and the appeal.
RELEASED: June 6, 2005 (“SB”)
“S. Borins J.A.”
“I agree R. A. Blair J.A.”
“I agree H. S. LaForme J.A.”