ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-37653
DATE: 2015-08-05
BETWEEN:
Jacob Van Halteren
Plaintiff
– and –
De Boer Tool Inc.
Defendant
John W. Findlay, for the Plaintiff
Tyler H. McLean, for the Defendant
HEARD: September 19th, 2013, August 21th, 2014 and June 26th, 2015 at Hamilton Sopinka
RULING
PARAYESKI, J.
[1] The plaintiff moves for summary judgment as against the defendant in respect of monies loaned to, or invested in, the corporate defendant. The defendant asks that the plaintiff’s summary judgment motion be dismissed and that I grant it summary judgment dismissing the plaintiff’s claim “to the extent that it is based on the Original Promissory Note & a Loan”. The latter request is as obtuse as the phraseology used suggests.
[2] There are not many facts that are not in dispute, however, there is agreement that in late 2002, the plaintiff advanced to the defendant the sum of $500,000.00, or approximately that amount. The parties chose to document the transaction by means of a promissory note. Many of its terms are incomprehensible and unexplained. The note bears a “date of issue”, that being September 1st, 2002. It is also “dated” November 20th, 2003. Further, it is described as being “in force until a share agreement is put into place”, whatever that may have been intended to mean. No cogent explanation was ever provided.
[3] The note does have a clear “principal amount” of $500,000.00 and an unequivocal promise to pay “on Demand or by September 1, 2006 whichever shall occur first”.
[4] On November 21st, 2005 the parties “resigned” the note, leaving the payment terms intact.
[5] The defendant says the plaintiff demanded payment on January 5th, 2006 and again on February 20th, 2006. The plaintiff acknowledges at least the latter demand. No payment was ever made.
[6] The plaintiff admits to having made some handwritten alterations to the 2003 note and/or the re-executed note of 2005. These alterations are immaterial for present purposes.
[7] In essence, the limitation period for bringing an action based upon a promissory note runs for two years from the due date or the day following demand, if demand is the triggering event. The commencement date can be altered by means of acknowledgment of the indebtedness during the currency of the limitation period. Such acknowledgment sets a new commencement date for the two year period to run. Acknowledgment made after the expiry of the two year limitation date is of no practical effect.
[8] Taking the better case scenario for the plaintiff, we begin with a demand on February 20th, 2006. That obviously predates September 1st, 2006. The limitation, without acknowledgment, would run out on February 21st, 2008.
[9] It is common ground that no acknowledgment took place before February 21st, 2008. The Notice of Action in this matter was not issued until October 17th, 2012, i.e. significantly after expiry of the limitation period just described.
[10] The defendant argues that the present claim was not actually started until October 3rd, 2014, when the plaintiff amended his pleadings. That is immaterial under the circumstances, as I shall describe.
[11] Any of the acknowledgments of the debt which the plaintiff asserts the defendant has made took place after the expiration of the limitation period, and are thus ineffective as a means of extending it.
[12] The plaintiff says, however, that the parties met on November 21st, 2008 and that a wholly new promissory note was signed. It contained a promise to pay “on Demand or by November 21st, 2010”, with no mention of “the earlier of”. It also contained the following paragraph “The undersigned [both the plaintiff and the defendant’s president are said to have signed below] agrees that the (2) two year limitation period contemplated pursuant to the Limitations Act of Ontario shall not start to run unless and until there has been a default following demand”, whatever that may mean in the context of the promise to pay clause described above. In any event, the plaintiff takes the position that by commencing the action by a Notice of Action issued on November 17th, 2012, he came within a two year limitation period that ran until November 21st, 2012, i.e. two years from the November 21st, 2010 date set out in the “new” note.
[13] The defendant denies that its president signed the promissory note of November 21st, 2008. The alleged signature of the president was examined by a handwriting expert. It was his opinion that the signature “is a simulation”, essentially traced from a genuine signature. On the basis of that opinion, I find that the promissory note of November 21st, 2010 is a forgery.
[14] This forgery has four significant consequences as follows:
The November 2010 note cannot form the basis of any valid claim. That the action was arguably commenced within two years of a date shown on its face is meaningless;
The said note cannot serve as any kind of acknowledgment of the debt;
The tendering of the forged note by the plaintiff disentitles him to any of the alternate equitable relief he advances. He does not come to the Court with the proverbial “clean hands”; and
Where the evidence of the plaintiff and the defendant differs, I prefer and accept that of the defendant.
[15] The plaintiff also submits that I consider the transaction purely as a loan, i.e. without the promissory notes as factors. When questioned about the terms of that loan, however, the plaintiff asserted that they simply mirror the terms of the notes. Accordingly, the same analysis applies, and any claim based on a pure loan is similarly statute barred.
[16] The plaintiff’s motion for summary judgment is dismissed. The defendant is entitled to the relief it seeks, which is dismissal of the plaintiff’s claim “to the extent that it is based on the Original Promissory Note & a Loan”. It is not the task of this court to intuit the practical ramifications of that request.
[17] If the parties cannot agree upon costs, they may make brief written submissions to me in that regard. The submissions, if any, shall not be longer than three typewritten pages in length each, not including a costs outline. The defendant’s submissions are due on or before September 1st, 2015. The plaintiff’s submissions are due on or before September 15th, 2015. The submissions are to be forwarded to my attention at the John Sopinka Courthouse at Hamilton.
PARAYESKI, J.
Released: August 5, 2015
COURT FILE NO.: 12-37653
DATE: 2015-08-05
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Jacob Van Halteren
Plaintiff
– and –
De Boer Tool Inc.
Defendant
REASONS FOR JUDGMENT
MDP:co
Released: August 5, 2015