Sukloff v. A.H. Rushforth & Co., [1964] SCR 459

Supreme Court of Canada

Sukloff v. A.H. Rushforth & Co., [1964] S.C.R. 459

Date: 1964-04-28

Louis N. Sukloff (Plaintiff) Appellant;

and

A.H. Rushforth & Company Limited, Rest Plan Properties Limited, Guaranty Trust Company of Canada, and J.S. Whitehead, Trustee of the Estate of A.H. Rushforth & Company Limited and Rest Plan Properties Limited (Defendants) Respondents.

1963: October 7, 8, 9; 1964: April 28.

Present: Cartwright, Abbott, Judson, Ritchie and Hall JJ.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Bankruptcy—Money advanced for operations of companies in consideration of share in profits—Subsequent bankruptcies of companies—Loan claim—Security obtained for part of advance by way of equitable assignment—Bankruptcy Act, R.S.C. 1952, c. 14, s. 98—The Partnerships Act, R.S.O. 1960, c. 288, s. 4.

A scheme to finance the acquisition and resale of apartment house properties consisted in obtaining options on such properties and the promotion of syndicates to acquire them, the purchase money to be raised by the sale by one R or his company of units in the syndicates, which were secured under the provisions of deeds of trust pursuant to which a trust company was to carry out the purchase on behalf of each syndicate, pay the expenses and arrange for the reimbursement of the amount of any deposits which had been paid in consideration of obtaining the options.

The plaintiff S advanced moneys to R Co. and R P Co. under an agreement the terms of which were put in writing in a letter dated July 31, 1958. The letter was signed by R, as president of R Co., and stated that after the payment of the sums advanced by S and expenses, all profits were to be divided equally between S and R. By the latter part of October, neither of two proposed property purchases had been completed and, more money being required, S advanced a further sum of $5,000 to R Co. and R P Co. on October 31, 1958, under the terms of

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a written agreement entered into between him and the two companies and bearing that date.

After reciting that S had paid to the two companies under terms of the agreement of July 31, 1958, a sum of $45,000 of which $35,000 “is represented by preferred shares in Rest Plan Properties Limited”, and that the companies required an additional $5,000, this agreement provided, inter alia, for the repayment of $35,000 on the closing of the purchase of either of the two properties, which sum was to be paid out of moneys being disbursed by the G Trust Co. to R P Co. under the terms of its trust agreements with respect to the said properties. The balance of $15,000 was to be paid on the closing of the purchase of the remaining property which sum was to be disbursed by the trust company as aforesaid. On the same date, R P Co. gave a written direction to the trust company to pay S the sum of $35,000 from the moneys due on the closing of either purchase. It later purported to revoke this direction. The purchase of one of the properties was completed and after payment of the purchase price there remained in the hands of the trust company a sum of $55,000 to be paid to the person or persons entitled thereto.

S brought action for recovery of $50,000 in December 1958, but in March 1960 R Co. and R P Co. made assignments in bankruptcy. S was granted leave to continue the action and the trustee in bankruptcy was added as a party defendant. The action was dismissed at trial and an appeal from the trial judgment was also dismissed by the Court of Appeal.

Held: The appeal should be allowed.

The two agreements of July 31 and October 31, 1958, taken together with the assignment to the trust company of October 31, constituted a valid equitable assignment of a future chose in action which was so assigned for the express purpose of providing S with security for the advance by way of loan which he made to the defendant companies. The provisions of s. 98 of the Bankruptcy Act and s. 4 of The Partnerships Act had no application to that part of the advance secured by this assignment. Badeley v. Consolidated Bank (1888), 38 Ch. D. 238, applied.

There was no validity in the plea that the assignment was void as constituting a fraudulent preference.

S was entitled to be paid $35,000 from the fund held by the trust company, and as to the $5,000 advanced on October 31, 1958, he was entitled to rank pari passu with the general creditors because at the time of that advance no stipulation was made for him to share in the profits of the company. As to the balance of the claim, S was postponed to the general creditors under s. 98 of the Bankruptcy Act.

APPEAL from a judgment of the Court of Appeal for Ontario[1], dismissing an appeal from a judgment of Spence J. Appeal allowed.

J.J. Robinette, Q.C., for the plaintiff, appellant.

Hon. R.L. Kellock, Q.C., and D.J. Wright for the defendants, respondents: A.H. Rushforth & Co. Ltd., Rest Plan Properties Ltd., and J.S. Whitehead.

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The judgment of the Court was delivered by

RITCHIE J.:—This is an appeal from a judgment of the Court of Appeal for Ontario¹ dismissing an appeal from a judgment rendered at trial by Spence J. whereby he had dismissed the plaintiff’s action for the recovery of $50,000 allegedly loaned to A.H. Rushforth and Company Limited, (hereinafter referred to as the Rushforth Company) and Rest Plan Properties Limited (hereinafter referred to as “Rest Plan”) which the appellant claims to have been secured as a first lien on certain moneys lodged with the Guaranty Trust Company of Canada, in the course of providing the necessary financing for the purchase of two apartment houses in the City of Toronto.

The circumstances giving rise to this litigation may be summarized as follows:

In the summer of 1958 the appellant Sukloff entered into an arrangement with one A.H. Rushforth and the Rushforth Company (of which Rushforth and his appointees were the sole shareholders) to finance the acquisition and resale of apartment house properties in the City of Toronto. The scheme consisted in obtaining options on such properties and the promotion of syndicates to acquire them, the purchase money to be raised by the sale by A.H. Rushforth or his company of units in the syndicates, which were secured under the provisions of deeds of trust pursuant to which the Guaranty Trust Company of Canada was to carry out the purchase on behalf of each syndicate, pay the expenses including a commission to Rushforth and arrange for the reimbursement of the amount of any deposits which had been paid in consideration of obtaining the options.

In June 1958, Rushforth engaged in the promotion of two particular syndicates known as “Park Lane Apartments” and “Cliffview Apartments”, Sukloff advancing the money required for the deposits on the options and for preliminary expenses. The agreement under which the advances were made was originally oral but was subsequently reduced to writing in a letter dated July 31, 1958, which was drafted by Sukloff. As I have said, deposits on the options for the Cliffview and Park Lane properties of $10,000 and $25,000 respectively were made with moneys provided by Sukloff.

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The letter of July 31 reads as follows:

Mr. Louis Sukloff,

157 Old Forest Hill Road,

Toronto, Ontario.

Dear Mr. Sukloff,

In consideration of your having advanced the capital necessary for the operations of A.H. Rushforth & Company Limited, A.H. Rushforth & Company Limited agrees as follows:

(1) After payment of all legitimate obligations and expenses incurred in the normal course of its business the Company shall reimburse the whole amount or such amount as may conveniently be available to L.N. Sukloff with interest at 10%.

(2) In addition the Company shall cause to be issued to any Trustee nominated by L.N. Sukloff, 50% of the shares of A.H. Rushforth & Company Limited and or such other companies as may be formed or controlled by A.H. Rushforth & Company Limited and such issue shall be made as and when required by L.N. Sukloff. It being the intention that all profits after payment of the sums advanced by L.N. Sukloff and legitimate expenses as aforesaid be divided equally between L.N. Sukloff and A.H. Rushforth.

(3) The said Trustee shall retain the shares of L.N. Sukloff in trust for L.N. Sukloff—subject to such disposition of them as L.N. Sukloff may direct.

(4) Neither L.N. Sukloff nor A.H. Rushforth agree either directly or indirectly to purchase any property or engage in any similar activities without first giving A.H. Rushforth & Company Limited the right of first refusal. In the event of any dispute arising between L.N. Sukloff and A.H. Rushforth which cannot be resolved between the parties the matter shall be referred to arbitration.

(5) It is acknowledged that the sums advanced as aforesaid to date is:

(6) Any other or further sums will be acknowledged by A.H. Rushforth & Company Limited by separate receipt.

                                                                                             Yours very truly,

                                                                                        (sgd) A.H. Rushforth

                                                                                             A.H. Rushforth             Pres.

At that time advances of $25,000 had been made by Sukloff and, in fact, a further advance of $20,000 was made on the following day, August 1, 1958, and a receipt for that amount endorsed on the letter of July 31st.

Apparently, in order to comply with requirements of the Ontario Securities Commission, a company, Rest Plan Properties Limited, was incorporated on August 6, 1958, and organized on August 8, 1958. It is clear from the record that

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the sole business of this company was to acquire the two options on the Cliffview and Park Lane properties and to transfer them to the syndicate, the Commission apparently taking the position that this should not be done in the name of the Rushforth Company, the promoter of the two syndicates.

By the latter part of October, neither of the property purchases had been completed and, more money being required, Sukloff advanced a further sum of $5,000 to the Rushforth Company and Rest Plan Company on October 31, 1958, under the terms of a written agreement entered into between him and the said two companies and bearing that date.

After reciting that he, Sukloff, had paid to the two companies under terms of the agreement of July 31, 1958, a sum of $45,000 of which $35,000 “is represented by preferred shares in Rest Plan Properties Limited”, and that the said two companies required “an additional sum of $5,000 to continue the sale of Units of Participation” in Cliffview and Park Lane, this agreement provided—

Now THEREFORE in consideration of the advance of Five thousand dollars ($5,000.00) by the party of the First Part to the Companies of the Second Part, other valuable consideration, and the mutual considerations herein appearing, the parties hereto agree as follows:—

1. The Companies of the Second Part acknowledge receipt from the Party of the First Part of the sum of $50,000.00 being the sum of Forty-five thousand dollars ($45,000.00) already advanced as referred to above and the sum of Five thousand dollars ($5,000.00) being advanced on the signing of this agreement and undertaking to repay same on the times as set out below along with interest at ten per cent (10%) per annum on the amount or amounts outstanding from time to time.

2. The Companies of the Second Part agree to repay to the Party of the First Part the sum of Thirty-five thousand dollars ($35,000.00) on the closing of the purchase of either the said Cliffview property or the said Park Lane property whichever shall occur first, which sum is to be paid out of the moneys being disbursed by Guaranty Trust Company of Canada to Rest Plan Properties Limited under the terms of its Trust Agreements with respect to the said properties.

3. The Companies of the Second Part agree to repay to the Party of the First Part the balance of Fifteen thousand dollars ($15,000.00) plus interest at the rate of ten percent (10%) per annum on the full amount advanced as aforesaid on the closing of the purchase of the Cliffview property or the Park Lane property, whichever shall second occur, which sum is to be disbursed by the Guaranty Trust Company of Canada as aforesaid.

4. In the event that either or both the purchase of the Cliffview property and Park Lane property are not closed then the Companies of the Second Part covenant and agree to repay the said sum of Fifty thousand dollars ($50,000.00) as soon as funds are available it being understood that if the said purchases are not closed as aforesaid and if either or both the

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deposits paid out therein are returned, then the said deposits in full will be paid over to the Party of the First Part, forthwith but if the Thirty five thousand dollars ($35,000.00) is paid by the Companies of the Second Part under Clause 2 hereof then the payment of moneys as provided under this Clause 4 shall not apply.

5. The Payment by the Companies of the Second Part to the Party of the First Part of the sum of thirty-five thousand dollars ($35,000.00) under this agreement shall constitute redemption by Rest Plan Properties Limited of its outstanding preference shares in the name of the Party of the First Part.

6. On receipt by the Party of the First Part of the return of the full amount of capital invested namely Fifty thousand dollars ($50,000.00), plus interest at the rate of ten percent (10%) per annum as aforesaid the Party of the First Part will surrender to the Companies of the Second Part all rights and title he may have to interests in the Companies of the Second Part under the terms of the agreement as set out in the letter dated July 31, 1958 as aforesaid and to release the Companies of the Second Part from all claims, costs, damages and liabilities arising from the said agreement other than the return of the capital and interest as aforesaid and to transfer to A.H. Rushforth all outstanding shares in the Companies of the Second Part.

7. In conclusion of the covenants herein set out the Companies of the Second Part and their Directors shall be absolved entirely of any further responsibility or liability to the said Party of the First Part in connection herewith.

8. This agreement shall enure to the benefit of and be binding upon the parties hereto, their heirs, executors, administrators and/or assigns respectively.

On the same date, October 31, 1958, the Rest Plan Company gave a written direction to the trust company to pay to Sukloff “the sum of thirty-five thousand dollars ($35,000) from the moneys due to us on the closing of the purchase of either Cliffview Apartments, Pell Street, Scarborough, or Park Lane Apartments, 110 St. Clair Avenue West, Toronto, whichever occurs the first”. It later purported to revoke this direction.

The purchase of the Cliffview property was never completed but that of the Park Lane property was completed on December 19, 1958, and after payment of the purchase price there remained in the hands of the trust company a sum of $55,000 to be paid to the person or persons entitled thereto.

Sukloff’s contention is that under the agreement of October 31,1958, and the direction given by Rest Plan and Rushforth companies to Guaranty Trust bearing the same date, he had acquired by way of equitable assignment a first lien on the said fund of $55,000 held by the Guaranty Trust Company to the extent of $35,000 with interest at 5% from

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December 19, 1958. The existence and enforceability of such charge or lien is the principal question at issue on this appeal.

This action was commenced by writ of summons dated December 29, 1958, but in the month of March, 1960, both the Rushforth and Rest Plan Companies made assignments for the benefit of their creditors under the provisions of the Bankruptcy Act, and J.S. Whitehead having been appointed trustee of their estates, leave was granted to continue the action and the said J.S. Whitehead as such trustee was added as a party defendant. The plaintiff also claims that he is entitled to rank as a creditor in the bankruptcy of the two defendant companies for the sum of $15,000 plus interest.

The trustee raised the following, amongst other, defences:

1. That the sums claimed were advances for the purpose of carrying on a business and as such were contributions to capital and could not be recovered until the trade creditors had been paid in full and in fact that the plaintiff and the two defendant companies were partners;

2. That either Rest Plan was insolvent at all material times since the execution of the agreement of October 31 or the redemption of its preferred shares pursuant to para. 5 of that agreement would have rendered it insolvent and accordingly the redemption was prohibited pursuant to s. 27(12) of The Corporations Act, R.S.O. 1960, c. 71.

3. That the agreement and the direction to Guaranty Trust Company of October 31 were void pursuant to the provisions of s. 2 of The Fraudulent Conveyances Act, R.S.O. 1950, c. 148;

4. That the plaintiff, Sukloff, is not entitled to recover anything in respect of advances made by him until the claims of all other creditors of the bankrupt companies have been satisfied, and in this regard the trustee relies upon the provisions of s. 98 of the Bankruptcy Act, R.S.C. 1952, c. 14, and ss. 3 and 4 of The Partnerships Act, R.S.O. 1960, c. 288.

In the course of his reasons for judgment, Spence J. made the express finding that although it was intended that Sukloff and A.H. Rushforth should be partners, the appellant never entered into any such relationship with either of the two limited companies, and that his relationship with these companies was confined to that of a lender or financier

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who had a right to share in the profits, if any, of the undertakings of these companies. I am satisfied that this is the proper conclusion on the evidence, but the learned trial judge and the Court of Appeal took the view that the relationship was one to which s. 98 of the Bankruptcy Act and s. 4 of The Partnerships Act were directly applicable so as to postpone the claim of the appellant to the rights of the trade creditors of the companies. Section 98 of the Bankruptcy Act reads as follows:

Where a lender advances money to a borrower engaged or about to engage in trade or business under a contract with the borrower that the lender…shall receive a share of the profits arising from carrying on the trade or business and the borrower subsequently becomes bankrupt the lender of the money is not entitled to recover anything in respect of the loan until the claims of all other creditors of the borrower have been satisfied.

Section 4 of The Partnerships Act is to the same effect containing as it does, the provision that:

…the lender of the loan is not entitled to recover anything in respect of his loan. until the claims of the other creditors of the borrower…for valuable consideration in money or money’s worth, are satisfied.

These statutes appear to find their origins in “An Act to amend the Law of Partnership” (frequently referred to as Bovill’s Act) passed in England in 1865 as c. 86 of 28-29 Victoria. By s. 5 of that Act it is provided:

In the event of any such Trader as aforesaid being adjudged a Bankrupt, or taking the Benefit of any Act for the Relief of Insolvent Debtors, or entering into an Arrangement to pay his Creditors less than Twenty Shillings in the Pound…the Lender of any such Loan as aforesaid shall not be entitled to recover any Portion of his Principal, or of the Profits or Interest payable in respect of such Loan…until the Claims of the other Creditors of the said Trader for valuable Consideration in Money or Money’s Worth, have been satisfied.

Laidlaw J.A., speaking on behalf of the Court of Appeal in this case, expressed the view that the moneys advanced by the appellant were not intended to be a mere loan of money, but rather that they were a contribution to the capital of a business enterprise in which the appellant had a personal and business interest, and in this regard he relied upon the decision of Rommer J. in In re Meade[2], in which the Court of Appeal in England followed the case of In re Beale[3]. In re Meade was a case in which a woman who was

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living with the debtor Meade as his wife, entered into a riding academy business with him and furnished him with the money to buy the riding academy and much of the equipment. The intention was that the two persons concerned should live together on the property and operate the business together living on the proceeds thereof. Laidlaw J.A. cites this case as authority for the proposition that:

Where a person has authorized the employment of his assets in a business he cannot prove in competition with the creditors of the business in respect of the assets so authorized to be employed.

In my opinion, the key to the decision in the Meade case appears to be furnished by the following comment on the appellant’s argument which occurs towards the end of Mr. Justice Rommer’s judgment where he says:

The truth of the matter is that the whole foundation of Mr. Davies’ argument is undermined by the realization that the moneys which the appellant advanced did not constitute, and were never intended to constitute, a loan at all. They represented her contribution to the capital of a business enterprise in which she plainly had an interest herself; and in my judgment she is no more entitled, as against the ordinary creditors of the business, to prove in respect of her contribution than the proprietor is entitled to prove in respect of his.

In Halsbury’s Laws of England, 3d ed., vol. 2 at p. 495, the cases of Meade and Beale are cited as authority for the proposition that:

If a person advances money to another not by way of loan but as a contribution to the capital of a business carried on for their joint benefit, the person who has made the advance, even though he is not a partner in the business and has received no share of the profits as such, is debarred from proving in the bankruptcy of the recipient of the money in competition with the creditors of the business.

As I have indicated, I do not construe Mr. Sukloff’s role as that of one who was supplying capital for a business carried on for the joint benefit of himself and the two limited companies. On the other hand, effect must be given to the terms of the assignment of October 31, 1958, which was addressed Guaranty Trust Company and reads as follows:

We A.H. Rushforth & Company Limited and Rest Plan Properties Limited hereby authorize and direct you to pay to the order of Louis N. Sukloff, 157 Old Forest Hill Road, Toronto, the sum of Thirty-five thousand dollars ($35,000.00) from the moneys due to us on the closing of the purchase of either Cliffview Apartments, Pell Street, Scarborough or Park Lane Apartments, 110 St. Clair Avenue West, Toronto, whichever occurs the first and this shall be your good and sufficient authority for so doing.

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The evidence does not satisfy me that the companies were insolvent at the time when this assignment was given and it appears to me to constitute valid security for part of the advance made by the appellant.

In the course of the argument before this Court, counsel for the appellant made reference to the case of Badeley v. Consolidated Bank[4], which, as I understand it, was not drawn to the attention of either of the Courts below. That was a case in which the plaintiff advanced money to a contractor to enable him to carry out a contract with a railway company for the construction of a railroad and the parties executed a deed by which the contractor assigned to the plaintiff all his machinery, plant, etc., and all shares and debentures he might receive from the company to secure the repayment of the loan. The deed also provided that the plaintiff should receive 10 per cent interest on his money and 10 per cent of the net profits. Having held that the plaintiff and the railway company were not partners in the undertaking, Cotton L.J., commenting on the provisions of s. 5 of Bovill’s Act, had this to say:

Mr. Wallis says the Plaintiff is here seeking to recover within the meaning of the section. In my opinion he is not seeking to recover any principal or interest. These words must mean, recover as against the property of the debtor not comprised in the security. If there is a security then insisting upon that security is not recovering principal and interest from the debtor. It may enable him ultimately to get it; but insisting upon the security and realizing the security, or, in my opinion, taking any proceedings which are necessary in order to recover that which is comprised in the security, cannot be said to be recovering principal or interest within the meaning of that section. In my opinion, that section only means that the lender shall not come in and rank with other creditors in the bankruptcy independently of any security he has in respect of the principal, interest or profits. He is not in any way prevented from insisting upon his security…

It appears to me that Badeley’s case provides a very close analogy to the present circumstances and that the reasoning advanced by the Court of Appeal in England in that case in relation to Bovill’s Act applies with equal force to the provisions of s. 98 of the Bankruptcy Act and s. 4 of The Partnerships Act. It is, however, argued on behalf of the respondent that the principle of Badeley’s case does not apply where the security is taken, as were the equitable assignments in this case, after the original loan. I can see nothing in either Badeley’s case or in Ex parte Sheil[5] to limit their application to cases in which the taking of security is contemporaneous

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with the making of an advance, and in any event, the present case is marked by the fact that a further advance of $5,000 was made at the time of the taking of the security on October 31, 1958.

The two agreements of July 31 and October 31, 1958, taken together with the direction addressed to the Guaranty Trust Company on October 31, in my opinion constitute a valid equitable assignment of a future chose in action which was so assigned for the express purpose of providing the plaintiff with security for the advance by way of loan which he made to the Rushforth and Rest Plan Companies, nor do I think that there is any validity in the plea that the assignment was void as constituting a fraudulent preference.

The agreement of October 31 states that $35,000 of the loan “is represented by preference shares in Rest Plan Properties Limited…” and it is contended that payment of this amount to the plaintiff would constitute a redemption of its preference shares by the company, and that such a transaction would contravene the provisions of s. 27(12) of The Corporations Act, R.S.O. 1960, c. 71, which provides that:

(12) Preference shares shall not be redeemed or purchased for cancellation by the company if the company is insolvent or if the redemption or purchase would render the company insolvent.

It appears to me that the preference shares in question were issued to Sukloff as additional security for his loan, and it is apparent from the provisions of para. 6 of the agreement of October 31, that they were to be surrendered upon payment of the $50,000 which Sukloff had advanced.

The purchase of the Park Lane property was completed on December 19, 1958, and on the principle that equity regards that to be done which ought to have been done, it appears to me that the rights of parties are to be considered as if the shares had been redeemed on that date. This being the case, it is clear that in seeking to invoke the provisions of s. 27(12) of The Corporations Act, the defendants assume the burden of proving that the Rest Plan Company was insolvent at that date, or that the redemption of their shares would have rendered it insolvent, and I am not satisfied that the evidence is sufficient to discharge this burden.

In view of all the above, I have formed the opinion that the appellant is entitled to be paid $35,000 from the fund now held by the Guaranty Trust Company, and that as to

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the $5,000 advanced on October 31, 1958, he is entitled to rank pari passu with the general creditors because at the time of that advance no stipulation was made for him to share in the profits of the company. As to the balance of his claim, I think that he is postponed to the general creditors having regard to the terms of the agreement and to the provisions of s. 98 of the Bankruptcy Act.

I would accordingly allow this appeal and direct that the plaintiff should have judgment against the Guaranty Trust Company of Canada in the sum of $35,000 with interest at the rate of 5 per cent per annum from December 19, 1958, and that it be declared that the plaintiff is entitled to rank as an ordinary creditor in the bankruptcy of the two respondent companies in the amount of $5,000.

The appellant should have his costs as against the Rushforth and Rest Plan Companies, but there should be no costs against Guaranty Trust Company of Canada which played the role of a stakeholder throughout the proceedings.

[Editorial note:—On a motion to vary the minutes of the above judgment, the hearing of which was commenced on June 8, 1964, and adjourned to June 15, 1964, the following judgment was delivered on June 29, 1964.]

The formal judgment of this Court delivered on April 28, 1964, is amended to read as follows:

“The appeal is allowed, the judgments in the Courts below are set aside and it is directed that judgment be entered providing that the appellant do recover from the respondent, Guaranty Trust Company of Canada the sum of $35,000 with interest at the rate of 5 per cent per annum from December 19, 1958, and declaring that the appellant is entitled to rank as an ordinary creditor in the bankruptcy of the respondent companies, A.H. Rushforth & Company, Limited and Rest Plan Properties Limited for the amount of $5,000 with interest at 5 per cent per annum from October 21, 1958. The appellant shall recover his costs throughout from J.S. Whitehead, Trustee of the estate of A.H. Rushforth and Company Limited and Rest Plan Properties Limited. The costs of the respondent Guaranty Trust Company of Canada of the trial of the appeal to the Court of Appeal and of the appeal to this Court shall be paid out of the fund in its

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hands and it is declared to be entitled to a lien therefor on that fund.”

There will be no order as to the costs of this application.

Appeal allowed.

Solicitors for the plaintiff, appellant: Allen, Hunter, Campbell & Regan, Toronto.

Solicitors for the defendants, respondents, A.H. Rushforth & Co. Ltd., Rest Plan Properties Ltd., and J.S. Whitehead: Blake, Cassels & Graydon, Toronto.

Solicitors for the defendant, respondent, Guaranty Trust Company of Canada: Landriau & Dean, Toronto.