COURT FILE AND PARTIES

COURT FILE NO.: 18387/13

DATE: 2013-10-21

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Bercell Integrated Technologies Ltd.

Plaintiff

(Respondent Party)

– and –

Yvon Chartrand, Guy Chartrand, Maurice Chartrand and Collette Chartrand, carrying on business as “Chartrand Equipment” and 450477 Ontario Limited

Defendants

(Moving Parties)

David L. Lanthier, for the Plaintiff/ Respondent Party

Shaun Laubman, for the Defendants / Moving Parties

HEARD: October 16, 2013, by video in Sudbury. Cochrane matter.

DECISION ON MOTION

R.D. Gordon j.:

Overview

[1] The Defendants have brought a motion for summary judgment in which they seek dismissal of the Plaintiff’s claim against Yvon Chartrand, Guy Chartrand, Maurice Chartrand and Collette Chartrand on the basis that all contractual dealings with the Plaintiff were by the corporate defendant. They take the position that the claim against these individual defendants is entirely without merit and can be determined in their favour without the requirement of a trial.

Background

[2] For a period of time beginning in 2009, the Plaintiff provided goods and services to a business named Chartrand Equipment. Other than occasionally dealing with the comptroller for Chartrand Equipment (Dennis Peroni) the Plaintiff dealt directly with the personal defendants Yvon Chartrand, Guy Chartrand and Collette Chartrand.

[3] In addition to providing goods and services to the business, the Plaintiff contends that it was often asked to provide goods and services to the individual defendants personally and to submit the related invoices to Chartrand Equipment for payment.

[4] There was no written contract governing the relationship between the Plaintiff and Defendants. Goods and services were rendered on a running account basis. The account went into arrears in 2012 and this action ensued.

[5] Although also at issue between the parties is the true status of accounts and whether there were deficiencies in the goods and services provided by the Plaintiff, the issue on this motion is this: Who were the contracting parties?

The Position of the Defendants

[6] The Defendants contend that Chartrand Equipment is, and has always been, the business name of the defendant 450477 Ontario Limited. They assert that the Plaintiff was aware of the corporation or ought reasonably to have known it was dealing with a corporation and rely upon the following:

For a period of time in the 1990’s, Chartrand Equipment was the registered business name for the corporation, and although the registration expired in 1999, the corporation has continued to use the business name since.
The corporation publically represents itself as carrying on business under the name Chartrand Equipment.
The website of Chartrand Equipment refers to the business in several places as a “company”.
The Plaintiff was paid with cheques upon which it was written that Chartrand Equipment is a division of the corporation.
The proposal for services initially submitted by the Plaintiff referred to Chartrand Equipment as a “company” in several places.
The Plaintiff was able to discern the existence of the corporation through its Google search.
The Plaintiff had to have known it was dealing with a corporation or it would not have initiated a business name search prior to beginning the action.

The Position of the Plaintiff

[7] The Plaintiff contends that it had never been advised that Chartrand Equipment was a corporation, was unaware that it was a corporation, and simply knew the business to be operated by the individual defendants. When payment of its account ceased, counsel for the Plaintiff undertook a registered business name search for “Chartrand Equipment”, which revealed no record of an active business name registration or corporation similar to that name.

[8] Just prior to the Statement of Claim being issued, the Plaintiff completed a Google search for Chartrand Equipment and discovered a comment on a labour law decision in which it had been involved. That decision referenced “450477 Ontario Ltd. Chartrand Equipment”, and so, out of an abundance of caution, the numbered company was included in the Statement of Claim as a defendant.

Applicable Law

[9] Incorporation insulates the individuals involved in a business from many of the liabilities of the business. However, if one expects to benefit from this protection, then others must, at a minimum, be informed in a reasonable manner that they are dealing with a corporation and not an individual [see Truster v. Tri-Lux Fine Homes Ltd., 1998 3497 (ONCA)]. The onus is upon the Defendants to satisfy the court on a balance of probabilities that their efforts to inform the Plaintiff that it was a corporate entity were reasonable such that the Plaintiff either knew or ought reasonably to have known it was dealing with a corporation.

[10] Rule 20.04 of the Rules of Civil Procedure provides that the court shall grant summary judgment if it is satisfied there is no genuine issue requiring a trial with respect to a claim or defence. In Combined Air Mechanical Inc. v. Flesch, the Ontario Court of Appeal clarified the scope of the summary judgment rule and identified two categories of claims to which it can apply: The first are claims that are without merit, and the second are those which can be determined without requiring a full trial.

[11] On a motion for summary judgment, once a defendant establishes there is no genuine issue requiring a trial in respect of a claim, the plaintiff bears the evidentiary burden of presenting evidence showing that a trial is required. Both parties must put their “best foot forward” and cannot rely on mere allegations in the pleadings.

[12] In essence, the question before me is whether the Defendants have established that the Plaintiff knew or ought reasonably to have known it was dealing with a corporate entity, and whether I can make that determination in their favour without the necessity of a trial.

Analysis

[13] The Defendants point out that the corporation properly registered its business name in the 1990’s and has carried on business as Chartrand Equipment without interruption since. However, that evidence is of little probative value without some evidence that this would have been expected to come to the attention of the Plaintiff. In fact, as the evidence of the Plaintiff establishes, a business name search done prior to the issuance of the claim did not disclose that Chartrand Equipment was the business name for anyone. As we now know, the corporation’s business name registration expired some fourteen years ago.

[14] Although the Defendants point out that Chartrand Equipment holds itself out publically as the business name for the corporation, they have provided no supporting documents that one would expect to come to the attention of the Plaintiff in the ordinary course of business. Notable in their absence are such things as business signage showing the corporate name, business letterhead or invoices showing the corporate name, and business advertisements showing the corporate name. In fact, they produced no document that one would reasonably expect to come to the attention of the Plaintiff and which contained the corporate name other than the cheques paid to the Plaintiff in payment of their account from time to time. In that regard, although the use of corporate cheques is one factor to consider when determining whether a party it contracted with was a corporation, such cheques alone have generally been found to be insufficient notice [for example, see 3253791 Canada Inc. v. Armstrong (2002), 2002 14651 (ON SC), 27 B.L.R. (3d) 230 (Ont. S.C.); Pennelly Ltd. v. 449483 Ontario Ltd. (1986), 20 C.L.R. 145 (Ont. H.C.); and de la Torre v. 1093641 Ontario Limited, 2013 ONSC 1355].

[15] The Defendants point out that the website for Chartrand Equipment refers to it as a “company” in several places. Although this is true, that same website does not anywhere refer to Chartrand Equipment being the business name for the corporation and nowhere makes any mention of the corporation. In any event, the website filed as evidence is copyright 2013, which is after the claim was issued. I have no evidence of what the website looked like during the relevant time periods.

[16] Although it is true that the Plaintiff’s proposal to the Chartrand Equipment referred to it as a “company” in places, this is far from definitive proof that the Plaintiff knew it was dealing with a specific corporate body.

[17] Although the Plaintiff was able to discern the existence of the corporation by reviewing a labour relations case commentary that appeared when it made a Google search of Chartrand Equipment, I have no evidence to establish that this commentary was online during the relevant period. In addition, I question whether the ability to uncover the corporate existence in this fashion can constitute reasonable effort on the part of the Defendants to inform the Plaintiff of the corporation’s existence.

[18] Finally, although Plaintiff’s counsel undertook a business name search to determine what “Chartrand Equipment” really was, that cannot be conclusive proof the Plaintiff knew it was a corporation. It could just as easily have been a sole proprietorship or a partnership.

[19] None of the factors cited by the Defendants is determinative on its own. Nor are they determinative when considered together.

[20] In all, I am unable to find on the evidence before me that there is no genuine issue for trial relative to the Plaintiff’s knowledge of the entity it was dealing with. I cannot determine that there is no merit to its claim that it dealt solely with the individual defendants and had no knowledge of the corporation.

[21] That being said, the evidence establishes no legal basis to substantiate a claim against Maurice Chartrand. The Plaintiff does not allege having dealt with him in providing goods and services and has provided no evidence of his involvement in the business other than its understanding that it was a family run business. In these circumstances, the claim against him is without merit and cannot succeed. There is no requirement for a trial to make that finding.

Conclusion

[22] The Plaintiff’s claim against Maurice Chartrand is dismissed. The Defendants’ motion is otherwise dismissed.

[23] If the parties are unable to agree on costs they may make written submissions to me, not to exceed five page each, within forty five days.

Mr. Justice Robbie D. Gordon

Released: October 21, 2013