Norcan Limited v. Lebrock et al., [1972] SCR 26

Supreme Court of Canada

Norcan Limited v. Lebrock et al., [1972] S.C.R. 26

Date: 1971-04-27

Norcan Limited (Plaintiff) Appellant;

and

Harold Lebrock (Defendant) Respondent.

and

Harold Goltman and Alphonse Raymond, Jr. (Intervenants).

1971: March 29; 1971: April 27.

Present: Fauteux C.J. and Abbott, Spence, Pigeon and Laskin JJ.

ON APPEAL FROM THE COURT OF QUEEN’S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC

Capias ad respondendum—Motion to quash—Intention to defraud creditors—Question of fact—Onus on plaintiff not discharged—Code of Civil Procedure, art. 895, 898, 919.

A writ of capias ad respondendum was issued on an affidavit alleging that the defendant was immediately about to leave the province of Quebec with intent to defraud his creditors in general and the plaintiff company in particular. The defendant was duly arrested but released on furnishing sureties. His petition to quash the writ and to discharge the bondsmen, was granted by the Superior Court. This judgment was affirmed by a majority judgment of the Court of Appeal. The defendant was not represented before this Court at the hearing of the appeal, but, by judgment of this Court ([1969] S.C.R. 665) his bondsmen were granted leave to intervene and were represented by counsel.

Held: The appeal should be dismissed.

The intention to defraud the creditors in general and the plaintiff in particular, is a question of fact. The onus was on the plaintiff to establish such intention. The trial judge and the Court of Appeal held that it had failed to discharge that onus. Those findings should not be disturbed.

APPEAL from a majority judgment of the Court of Queen’s Bench, Appeal Side, province of Quebec, affirming a judgment of Nadeau J. Appeal dismissed.

J.G. Stewart, Q.C., for the plaintiff, appellant.

[Page 27]

J.M. Schlesinger, Q.C., for the intervenants.

The judgment of the Court was delivered by

ABBOTT J.—This appeal is from a majority judgment of the Court of Appeal, Montgomery J.A., dissenting, which confirmed a judgment of the Superior Court, maintaining respondent’s petition to quash a writ of Capias ad Respondendum, issued on the affidavit of the president of plaintiff company, on the grounds that respondent was immediately about to leave the Province of Quebec with intent to defraud his creditors in general and appellant in particular.

The facts, as to which there is little dispute, are set out in the reasons of Montgomery J.A. as follows:

Plaintiff instituted its proceedings in March 1966. The affidavit in support of the issue of the writ (Art. 898) was made by Plaintiff’s president, the witness McNaughton, on 16th March. From this and from the declaration it appears that, under the terms of a contract with Plaintiff (Exhibit P-1), Defendant had undertaken to pay $50,000 to the Mise‑en‑cause Bank of Commerce to the exoneration of Plaintiff, that Defendant was in default to make payments on account of this sum and that the balance owing, including interest, was $26,855. It is further stated that Defendant was indebted to the Mise‑en‑cause Mercantile Bank for a total amount of $8,325 on three notes (Exhibit P-2) payable to Plaintiff and endorsed by it to that bank. It is declared in the affidavit that Defendant had negotiated the sale of one of his principal assets, being the controlling interest in American Mercury Corporation, that he had announced his intention of moving to England, that he had stated that he regarded his indebtedness to the banks as of no importance, that he was trying to sell his only remaining asset in Canada, being the controlling interest in Delta Minerals Corporation, that he was giving up his office in Montreal and that he had sub-leased his living quarters.

The last paragraph of the affidavit (No. 8) is in the following terms:

“The defendant is immediately about to leave the Provinces of Quebec and Ontario with intent to defraud his creditors in general and the plaintiff in particular, and the defendant is also secreting

[Page 28]

and making away with, and is immediately about to secrete and make away with his property, with intent to defraud his creditors in general or the plaintiff in particular, and the plaintiff will thereby be deprived of its recourse against the defendant.”

This substantially reproduces the wording of paras. 1 & 2 of Art. 895 C.C.P.

Defendant was duly arrested but was shortly thereafter released on furnishing sureties (Art. 910). He made a petition to quash dated 22nd March. While he in general terms denied that he was indebted to Plaintiff, he did not expressly deny his indebtedness to the banks. He alleged that he had never attempted to conceal his intention of moving to England and that the allegations of the affidavit were false.

The defendant was not represented before us at the hearing of this appeal but, by judgment of this Court, his bondsmen were granted leave to intervene under Rule 60, and were represented by counsel.

The question to be determined upon the petition to quash was whether, at the time the writ was issued, the defendant was about to leave the province with intent to defraud his creditors in general and the plaintiff in particular. Such an intention is, of course, a question of fact. On the petition to quash, the onus was on the appellant to establish such intention, and the learned trial judge and the majority in the Court of Appeal held that it had failed to discharge that onus. I am not prepared to disturb those findings.

I would dismiss the appeal but, in the circumstances, without costs.

Appeal dismissed without costs.

Solicitors for the plaintiff, appellant: Stewart, McKenna, Lefebvre, Loriot, Phelan & Cornish, Montreal.

Solicitor for the intervenants: J.M. Schlesinger, Montreal.