COURT FILE NO.: 15-64227

DATE: 2015-11-12

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: HENRI NADEAU, Plaintiff

AND:

ANGELO CAPERELLI, JACQUES CHATELAIN, and 2292819 ONTARIO INC, Defendants

BEFORE: Honourable Justice Timothy Ray

COUNSEL: Hank Witteveen, Counsel, for the Plaintiff

Thomas Curran, Counsel, for the Defendants, Caperelli and 2292819 Ontario Inc.

HEARD: November 10, 2015

ENDORSEMENT

[1] The plaintiff moves for summary judgement on his statement of claim. The defendants oppose judgement on the ground that they have a good defence.

[2] The plaintiff’s claim against the defendants is as assignor of a promissory note in the amount of $70,000 in favour of 1117251 Ontario Inc. (“111”) who it is claimed made the assignment in favour of the plaintiff. The plaintiff was the sole owner and directing mind of 111. The authenticity and legality of the promissory note is note in question.

[3] The defendant’s position in his statement of defence is that the assignment to the plaintiff is unenforceable on the ground that it was intended to defraud creditors and the assignment is invalid. While the defendants did not plead the Limitations Act, nor that the Plaintiff had no cause of action when he started his action, the defendants raise these defences in their materials and their factum.

[4] The plaintiff’s motion record includes an affidavit from the plaintiff along with various exhibits. The defendant includes his affidavit along with exhibits. The parties elected not to conduct cross-examinations.

[5] Following, is a brief chronology.

a. In June, 2011, 111 sold its nursing home to the defendant Caperelli. It was an asset purchase. The defendant and the plaintiff failed to execute a bulk sales declaration as contemplated by the Bulk Sales Act, and several creditors of 111 remained unpaid. The defendants were not and are not creditors of the plaintiff.

b. October 19, 2011, the individual defendants signed a promissory note in favour of 111 in the amount of $70,000. The due date was July 21, 2013. No interest was payable if paid by the due date.

c. November 1, 2011, 111 made an assignment to the plaintiff. Following are the relevant terms.

“The Corporation is advised that it has a possible claim in respect to deposit monies paid under terms of the subject agreement dated April 1^st, 2011.

The Corporation hereby transfers, sets over, and assigns all its rights to the foregoing claim to and for the benefit of the shareholder Henri Nadeau, for his own use and entitlement absolutely, on the proviso that the proceeds of such claim, if any, shall be applied to and credited to his shareholder loan.”

d. March 31, 2015, the plaintiff notified the defendants of the assignment of the promissory note, and demanded payment by April 15, 2015. No payment was made.

e. May 7, 2013, the current action was commenced.

f. August 13, 2015, Statement of Defence of the defendants.

g. September 1^st, 2015, a further assignment was executed by 111 in favour of the plaintiff. The relevant terms are as follows:

“The Corporation purported to execute an assignment of its remaining assets to Henri Nadeau as at November 1, 2011;

The Corporation failed to specifically mention a promissory note dated October 19, 2011 owing from Angelo Caperelli and Jacques Chatelain to the Corporation which note did not fall due until July 21, 2013.

The Corporation wishes to further evidence its intention to assign all its assets to Henri Nadeau in consideration of his shareholder loans to the Corporation including the aforesaid promissory note.

Therefore witness.

The Corporation hereby transfers, sets over, and assigns all its rights in any remaining assets including without limitation the promissory note mentioned above to and for the benefit or the shareholder Henri Nadeau, for his own use and entitlement absolutely, on the proviso that the proceeds of such claim, if any, shall be applied to and credited to his shareholder loan.”

h. September 4, 2015. “The plaintiff launched his motion for summary judgement supported by the affidavit of the plaintiff sworn September 1, 2015. Paragraph 5 reads as follows: “Since 111 was no longer active it was decided that its assets would be transferred to me. Attached hereto and marked as Ex. B to this, my affidavit, is a copy of the assignment in question. Although it was intended that all of the assets would be assigned, the promissory note which is the subject of this action was not yet due and was inadvertently omitted from the assignment. Consequently, a further assignment was entered into wherein the subject promissory note was specifically assigned to me. A copy of this assignment is attached as Ex. C to this, my affidavit.”

[6] The defendants’ argument that 111 could not make the assignment because it was insolvent fails. There is no legal principle to support that submission. The defendants did not seriously pursue that argument.

[7] However, the defendants’ contention that the plaintiff’s action is prescribed; and further that in light of the language of the assignment of November 1, 2011, the plaintiff had no cause of action at the time of the commencement of these proceedings, bears further scrutiny. The plaintiff’s position is that the assignment of September 1, 2015 was merely correcting the earlier assignment, and therefore, any inadequate language was made adequate. It became clear as the argument proceeded that these latter two issues required further argument with reference to relevant authorities. I am satisfied that further evidence is not required unless the parties believe that there needs to be a better evidentiary record for the limitation period argument. Subject to this, the parties are satisfied the record is sufficient. I am satisfied that there is no genuine issue requiring a trial and that this matter can be disposed of with further submissions. Consequently, and being mindful of Hyrniak v. Mauldin[^1], I make the following orders:

a. Adjourned to December 23, 2015 at 9.30 am for further submissions (2 hours).

b. The issues for submission will include:

i. Can an action based on the assignment of a promissory note be based solely on an unwritten intention?

ii. What effect, if any, is the assignment of September 1, 2015 on the assignment of November 1, 2011?

iii. Is the action prescribed by the Limitations Act? On this issue, and this issue alone, the parties are at liberty to cross-examine the opposite party, if so advised.

iv. Is the plaintiff entitled to a judgement against the defendants in accord with his statement of claim?

Honourable Justice Timothy Ray

Date: November 12, 2015

[^1]: (2014), 2014 SCC 7, 366 D.L.R.(4^th) 641, 46 C.P.C. (7^th) 217 (S.C.C)