DATE: 20050117

DOCKET: C41490

COURT OF APPEAL FOR ONTARIO

RE:

HUGH MORRIS and GLENDA MORRIS carrying on business as GLENHUGH ENTERPRISE (Plaintiffs/Respondents) – and – CALL THE CAR ALARM GUYS INC. and DON BARRIE also known as TERENCE ARTHUR BARRIE (Defendants/ Appellants)

BEFORE:

WEILER, MOLDAVER and SIMMONS JJ.A.

COUNSEL:

Igor Ellyn, Q.C.

for the appellant

David M. Woolcott

for the respondent

HEARD & RELEASED ORALLY:

January 13, 2005

On appeal from judgment of Justice Lorna-Lee Snowie of the Superior Court of Justice dated February 12, 2004.

E N D O R S E M E N T

[1] The issue on this appeal is whether the trial judge erred in holding the appellant personally liable on a contract with his company on the basis that he had agreed to be a principal debtor and in granting judgment against him as well as his company in the amount of $89,969.11 plus post-judgment interest.

[2] In our opinion, the trial judge erred in holding the appellant personally liable on the contract. Paragraph 8 when read in conjunction with the signing line on the contract is ambiguous. Paragraph 8 states: “The signatory” of the contract is personally liable. At the end of the contract the name Don Barrie is typed on the line reading: “Full name of Signatory”. Underneath are printed the words, “For and on Behalf of Call The Alarm Guys Inc.” The contract does not say “ For and on Behalf of Call the Alarm Guys As Well As Personally”. The omission suggests that the contract is being signed in a representative capacity only and may be seen as a contradiction of paragraph 8. The implication is reinforced by the fact that opposite the line “Title of Signatory” are the words “Secretary/Treasurer”.

[3] The respondent admits knowing that he was dealing with a corporation. Corporations can only enter into contracts by a person signing on their behalf. Having regard to the ambiguity in the contract, the doctrine of contra proferentum applies to assist the appellant.

[4] Further, the respondent told the appellant that he was signing a credit application. There was discussion about whether the time for payment should be 30 or 90 days. The title of the document reads “Standard Conditions of Agreement”. The respondent never drew to the appellant’s attention that his standard form made the person signing on behalf of the company personally liable and the form itself did not draw the reader’s attention to the provision in question.

[5] We see no merit in the appellant’s further submission that the trial judge was biased.

[6] In all the circumstances, we would allow the appeal, set aside the judgment and order that the action as against Don Barrie personally be dismissed with costs here and in the court below. We fix those costs at $1500 for the trial all inclusive and $ 5000 for the appeal all inclusive.

[7] There is no appeal from the decision of Snowie J. respecting judgment being entered against the corporation. In this regard, however, the respondent concedes that the calculation of interest on the debt should be calculated at the rate of 18% annually as opposed to compounded monthly at the rate of 1.5%. We accept the undertaking of counsel for the respondent that an adjustment will be made.

“K. M. Weiler J.A.”

”M. J. Moldaver J.A.”

“Janet M. Simmons J.A.”