Canada v. Bezan Cattle Corporation

Canada v. Bezan Cattle Corporation
Court (s) Database
Federal Court Decisions
Date
2021-05-04
Neutral citation
2021 FC 397
File numbers
T-985-19
Decision Content
Date: 20210504
Docket: T-985-19
Citation: 2021 FC 397
Toronto, Ontario, May 4, 2021
PRESENT: Mr. Justice Andrew D. Little
BETWEEN:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
Plaintiff
and
BEZAN CATTLE CORPORATION,
BARBARA BEZAN AND LAYTON BEZAN
Defendants
JUDGMENT AND REASONS
[1] The plaintiff has moved for summary judgment under Rules 213-215 of the Federal Courts Rules, SOR/98-106 in the amount of $399,305.54, plus interest and costs, against the defendant Bezan Cattle Corporation (“BCC”) and the individual defendants Barbara Bezan and Layton Bezan.
[2] The defendants requested that the Court dismiss the motion and the action against them entirely, or alternatively that the Court send the matter to trial.
[3] The defendants raise cattle in Saskatchewan. Each of the individual defendants is a 50% shareholder in BCC. Each is also a 50% shareholder in another company called Bezan Feeders Inc. (“BFI”). As described in detail below, the corporations made applications for an agricultural advance payment under the Agricultural Marketing Programs Act, RSC 1997, c 20 (the “AMPA”). Two advance payments were made. The plaintiff now seeks recovery of the aggregate sum paid, with accrued interest.
[4] For the reasons that follow, I conclude that there is no genuine issue for trial. Summary judgment is granted against BCC. Although the affidavits submitted by the defendants contained evidence of alterations to the application forms related to the loans, the uncontradicted evidence shows that that the claimed amounts were advanced and BCC clearly and unequivocally agreed to repay those amounts. It failed to do so and the plaintiff is entitled to judgment.
[5] The action against the individual defendants, Barbara Bezan and Layton Bezan, is dismissed. The Joint and Several Guarantees executed by the individual defendants are not enforceable as a result of subs. 31(2) of the Saskatchewan Farm Security Act, S.S. 1988-89, c. S-17.1.
I. Events Leading to this Motion
[6] The plaintiff’s claim arises from two payments made under the AMPA in 2008. Manitoba Livestock Cash Advance Inc. (“MLCA”) served as an administrator of advance payments made to agricultural producers under the AMPA. An advance payment program permitted livestock producers to receive advance payment for their animals before their sale. The amount of money advanced was based on the inventory of livestock during the relevant production period and had to be repaid within 12 to 18 months when the livestock was sold.
[7] The federal Minister of Agriculture and Agri-Food acted as guarantor of the advances. If the producer did not repay, MLCA could call upon the Minister to repay the amounts owing. When that payment occurs, under the AMPA the Minister becomes subrogated to the rights of MLCA and can seek repayment directly from the borrower: AMPA, subs. 23(2).
[8] In 2008, the defendants’ livestock business was badly affected by reports of bovine spongiform encephalopathy (“BSE”) in cattle – known by some as “mad cow” disease. The individual defendants caused their companies to make applications for two advance payments. The advances have not been repaid. The Minister has reimbursed MLCA and seeks payment from the defendants in this proceeding.
[9] The events relating to the two advances must be set out in detail to resolve the issues raised on this motion for summary judgment. The facts are taken principally from the Affidavit of Jo-anne Schell, a Program Manager for MLCA, sworn on July 7, 2020 and the affidavits of Barbara Bezan and Layton Bezan, both sworn on September 14, 2020. Jim Juacalla, the administrator at MLCA, did not provide evidence on this motion.
[10] Neither party cross-examined any affiant.
The Emergency Advance Payment
[11] On April 9, 2009, the defendants Layton and Barbara Bezan submitted a written application to MLCA for an emergency advance payment (the “Emergency Advance” or “EA”) in the amount of $45,938.88 on behalf of BCC. That application included a Repayment Agreement stipulating that BCC was to repay the EA within 12 months of the advance being issued. The application also required the Bezans to execute a “Joint and Several Guarantee” in respect of the advance, which they executed on April 9, 2008 at Regina, Saskatchewan.
[12] On April 23, 2008, MLCA executed the EA application. The signatory was Jim Juacalla, who signed the Administrator Attestation portion of the EA application on behalf of MLCA.
[13] On April 24, 2008, MLCA made an Emergency Advance in the amount of $100,000, less a holdback, tags and an administration fee. MLCA deposited the payment into BCC’s bank account with the Bank of Montreal.
[14] Mr Bezan and Ms Bezan both testified on this motion that BCC “did not want to apply” for $100,000 but only for $45,938.88. However, Ms Bezan testified that their other company, BFI, was in “desperate need” of funds due to the volatility of the cattle market and effects caused by outbreaks of BSE. She testified that Jim Juacalla at MLCA advised her that he would get them as much funding as he could; however, “because BFI was a new company, it might be hard to get an advance out quickly”. Ms Bezan testified that she told Mr Juacalla that BCC could not support more than the $45,938.88 applied for, so it had to be BFI that would apply for any additional advance (i.e., any additional amounts up to $100,000).
[15] Ms Schell testified that BCC was eligible up to $100,000 based on the information in the application about the quantity of livestock expected to be produced. Ms. Schell’s affidavit also advised that in her experience, it was not unusual for MLCA representatives to contact producers applying for an advance if it appeared the producer was eligible for a larger advance than the one they had requested. While she did not have first-hand knowledge of whether Mr Juacalla contacted either of the Bezans to obtain their permission, in Ms Schell’s view, there was no reason for him to alter their application without first doing so.
[16] Both Ms Bezan and Mr Bezan testified that they did not authorize any changes to the application form for the Emergency Advance, nor did they authorize the higher requested advance. However, neither one contested that the money was advanced, received and used. Neither of the Bezans testified that they raised any objection with MLCA to the quantum or to the transfer of the funds to BCC’s Bank of Montreal account (rather than to BFI) at the time in April 2008.
[17] Ms Bezan testified that she noticed that when the Emergency Advance funds were advanced to BCC, the amount was almost $100,000. She testified that “knowing the additional funds were for BFI, BCC made payments on behalf of BFI including an immediate payment on a BFI account receivable”. In addition, over “a couple of months, BCC paid over the excess advance amount to BFI”.
[18] By letter to BCC dated May 21, 2008, MLCA confirmed the Emergency Advance payment in the amount of $100,000 ($98,513.50 net of holdback, administrative fee and tags) and enclosed a copy of the modified EA Application. The letter noted that the advance was a 12-month loan and would mature on April 24, 2009. The defendants’ evidence did not contest that they received this letter.
The Continuous Flow Advance Payment
[19] On or around April 29, 2008, the Bezans submitted an application for another advance from the MLCA, this time on behalf of BFI for a Continuous Flow Operation Advance (the “CF Advance”) for $200,521.64. Like the EA application, the CF Advance application also included a Repayment Agreement stipulating that BFI had to repay the CF Advance within 12 months. The application also required the Bezans to execute a “Joint and Several Guarantee” in respect of the advance, which they did on April 29, 2008 at Regina, Saskatchewan.
[20] On May 21, 2008, MLCA (Jim Juacalla) executed the Administrator Attestation portion of the CF application.
[21] At some point, someone modified the CF application to make BCC the producer applying for the advance instead of BFI. The application shows the use of white-out. The specific timing of this change is not in the evidence.
[22] Mr Bezan and Ms Bezan both testified that they did not authorize any changes to the application documents nor did they authorize anyone at MLCA to substitute BCC as the borrower in lieu of BFI. The affidavits of both Mr Bezan and Ms Bezan acknowledged a telephone call between Ms Bezan and Mr Juacalla of MLCA concerning the amount of the CF Advance being limited to $200,000 because BFI was a “new entity”.
[23] MLCA’s files also contained handwritten notes, which were the subject of evidence from Ms Schell and from Jeff Rockburne, a Program Manager at Agriculture and Agro-Food Canada for the Advance Payments Program in the western Canadian provinces. I will return to this evidence below.
[24] On May 27, 2008, MLCA deposited the CF Advance in the amount of $200,000, less a holdback and administration fee, into BFI’s bank account at TD Canada Trust. No witness testified specifically about why the payment was made into BFI’s account rather than BCC’s. Ms Bezan did not testify about the use of that money by BCC or BFI or otherwise in the defendants’ business.
[25] By letter addressed to BCC dated August 25, 2008, MLCA confirmed the CF Advance of $200,000 ($197,200 net of holdback, administrative fee and tags) and enclosed a copy of the revised CF Advance application. The letter noted that the advance was a 12-month loan and would mature on May 27, 2009. The defendants’ evidence did not contest that they received this letter and its enclosure, or that the enclosure was the revised application.
Stays of Default and the Rollover Application
[26] No repayments were made on the advances by May 2009. The loans went into default.
[27] On May 19, 2009, BCC executed a Stay of Default Agreement, providing for a stay of default for the 2008 advances. This document was signed by both Mr and Ms Bezan for the producer, BCC.
[28] By letter dated November 30, 2010, MLCA advised BCC that it had determined that BCC had an advance from the 2008 production period and that the Minister had granted a new stay of default effective October 1, 2010. The letter set out the terms of repayment and the details of the 2008 advance:
Advance outstanding: $300,000.00
Interest outstanding to date on the interest-bearing portion: $10,509.47
[29] MLCA’s letter requested that the Bezans read and sign the attached acknowledgement document. The letter advised that if the producer is a corporation, only the signing authority needed to sign it. The acknowledgement document had to be returned with an administration fee of $500 by no later than December 31, 2010.
[30] On December 20, 2010, Mr Bezan on behalf of “Layton & Barbara Bezan, BEZAN CATTLE CORP” signed the acknowledgement document securing a second stay of default. BCC’s cheque for $500 payable to MLCA dated December 20, 2010 and signed by Ms Bezan is in the record.
[31] On May 6, 2011, MLCA sent a letter to BCC proposing the option of entering into a repayment schedule or completing an application for a rollover.
[32] On May 30, 2011, BCC submitted a Roll-over Application Form signed by Mr Bezan and Ms Bezan, asking to roll over $197,200 of the advances to the current production period. However, BCC did not submit all the paperwork required to formalize the rollover.
[33] Following written notices to BCC by letters dated August 25, 2011 and September 9, 2011 asking it to provide the required documentation, MLCA notified BCC by letter dated November 1, 2011 that it was in default of the EA and CF Advances.
[34] MLCA’s letter dated November 1, 2011 also stated that “[c]urrently you owe $300,000, plus interest to-date in the amount of $17,977.12”. The letter requested that an attached settlement agreement be completed to repay the outstanding advance within a five-year period.
The Settlement Agreement
[35] On November 1, 2011, BCC executed an “Advance Payments Program (APP) Settlement Agreement Between Defaulted Producer and MLCA” (the “Settlement Agreement”). Mr Bezan and Ms Bezan both signed on behalf of BCC.
[36] The Settlement Agreement confirmed that BCC owed MLCA $300,000 and interest at specified rates for specified periods. Repayment was to be made at a rate of $500 per month on the 15th of every month beginning on August 15, 2012, plus lump sum payments of $60,000 per year for 5 years when calves are sold.
[37] On August 29, 2012, MLCA received the executed Settlement Agreement and twelve monthly payment cheques from BCC. Ms Schell signed the Settlement Agreement on behalf of MLCA.
[38] From August 2012 to July 2013, BCC made the monthly payments of $500 payments to MLCA, consistent with the terms of the Settlement Agreement. It made no further payments to MLCA.
[39] Eleven of the monthly cheques are reproduced in the record for this motion. Each one bears the name “Bezan Cattle Corporation”. Each one is signed by Mr Bezan on behalf of BCC.
Enforcement Steps
[40] By letter dated May 30, 2014, MLCA advised BCC that it had requested that the Minister honour the guarantee of the 2008 advances and that the advance was now a debt payable to the Crown.
[41] On August 13, 2014, following a request by MLCA, the Minister paid out the guarantee to MLCA pursuant to subs. 23(2) of the AMPA.
[42] On June 18, 2019, the Minister brought its claim against the Defendants for $419,036.12, plus interest and costs.
II. Summary Judgment under the Federal Courts Rules
Legal Principles
[43] If the Court is satisfied that there is no genuine issue for trial, it shall grant summary judgment under Rule 215(1) of the Federal Courts Rules. There is no genuine issue for trial if there is no legal basis to the claim, or if the judge has the evidence before him or her that is required to fairly and justly adjudicate the dispute: Manitoba v Canada, 2015 FCA 57 (Stratas JA), at para 15; Burns Bog Conservation Society v Canada (Attorney General), 2014 FCA 170 (Gauthier JA), at paras 35-36; Hryniak v Mauldin, 2014 SCC 7, [2014] 1 SCR 87, at para 66.
[44] The onus is on the party seeking summary judgment to establish that there is no genuine issue for trial. Parties responding to motions for summary judgment are required to “put their best foot forward” in their response: Gupta v Canada, 2021 FCA 31 (Boivin JA), at para 29; Milano Pizza Ltd. v 6034799 Canada Inc., 2018 FC 1112 (Mactavish J.), at paras 34, 112 and 148. Indeed, that is the burden on both parties: Canmar Foods Ltd. v TA Foods Ltd., 2021 FCA 7 (de Montigny JA), at para 27; Miller v Canada, 2019 FCA 61 (Laskin JA), at paras 17 and 40. In Canmar, de Montigny JA observed that the responding party cannot rest on its pleadings and “must come up with specific facts showing that there is a genuine issue for trial” (at para 27). The Court “is entitled to assume that the parties to the motion have put their best foot forward and that, if this case were to go to trial, no additional evidence would be presented”: Milano Pizza, at para 105 (quoting Rude Native Inc. v Tyrone T. Resto Lounge, 2010 FC 1278 (Russell J.), at para 16). This implies that the parties should adduce all of their evidence in support of or in response to the motion.
[45] In Milano Pizza, Mactavish J. also set out the following summary judgment principles, at paragraphs 36-40 (citations excluded):
[36] As noted above, to be “fair and just”, the record before the motions judge must permit the judge to find the facts necessary to resolve the dispute: … Summary judgment should therefore not be granted where the necessary facts cannot be found, or where it would be unjust to do so.
[37] The jurisprudence is clear that issues of credibility ought not to be decided on motions for summary judgment. Generally, a judge who hears and observes witnesses giving evidence orally in chief and under cross-examination will be better positioned to assess the witnesses’ credibility and to draw the appropriate inferences than a judge who must depend solely on affidavits and documentary evidence: …
[38] Without hearing oral evidence, a motions judge faced with a genuine issue for trial cannot properly assess credibility or sift through and weigh the evidence: … Consequently, cases should go to trial where there are serious issues with respect to the credibility of witnesses: …
[39] That said, “the mere existence of apparent conflict in the evidence does not preclude summary judgment”. Judges have to take a “hard look” at the merits of the case and decide if there are issues of credibility that need to be resolved: …
[40] Judges dealing with motions for summary judgment must, moreover, proceed with care, as the effect of the granting of summary judgment will be to preclude a party from presenting any evidence at trial with respect to the issue in dispute. In other words, the unsuccessful party will lose its “day in court”: …
See also Rallysport Direct LLC v 2424508 Ontario Ltd., 2019 FC 1524 (Fuhrer J.), at para 42.
[46] As noted in Milano Pizza, at paragraph 39, the Court is required to take a “hard look” at the evidence on a summary judgment motion: see also Manitoba v Canada, at para 26. In Suntec Environmental Inc. v Trojan Technologies Inc., 2004 FCA 140 (Pelletier JA), the Court of Appeal confirmed the requirement to take a “hard look” at the merits and, if possible, make findings of fact and law if the materials allow it (at para 10).
[47] Where there are important factual disputes that cannot be resolved without determining questions of witness credibility and the inferences to be drawn from conflicting evidence, a trial is the preferable means to a sound resolution of the dispute, rather than summary judgment: TPG Technology Consulting Ltd v Canada, 2013 FCA 183 (Sharlow JA), at para 3. Thus, if there is a credibility issue to be resolved, it should not be decided on a summary judgment motion: Newman v Canada, 2016 FCA 213, at para 57; MacNeil Estate v Canada (Indian and Northern Affairs Department), 2004 FCA 50, [2004] 3 FCR 3 (Sharlow JA), at para 32; Suntec Environmental, at paras 20 and 28-29. A credibility issue arises when an issue must be decided by selecting the evidence of one witness over another (Suntec Environmental, at paras 23 and 27-28) or if the credibility of a witness is put into issue through cross-examination and the witness’s evidence must not be believed to reach a conclusion (at paras 25-26).
The Plaintiff’s Motion for Summary Judgment
[48] The plaintiff submitted that there are no genuine issues for trial and that judgment should be granted against the defendants. On the merits of its claim, the plaintiff referred to fundamental contract law doctrines of offer, acceptance and consideration to support its position that the agreements between MLCA and the defendants are valid and enforceable. According to the plaintiff, the defendants applied for the advances, in effect making an offer. The modifications to the loan applications (principally, the increase from $45,938.88 to $100,000 in the EA application and the replacement of BFI with BCC in the CF Advance application) constituted a counteroffer from MLCA to the defendants backed by the advances as consideration. On this view, the defendants accepted the counteroffer by their subsequent conduct, namely the execution of several documents agreeing to be responsible for the advance payments, including the stay of default agreement, the acknowledgment document, the Settlement Agreement and by BCC making payments under the Settlement Agreement.
[49] In response, the defendants submitted that this Court should deny the request for summary judgment and summarily dismiss the claim in its entirety. In the alternative, they plead that the case presents genuine issues for trial. On the merits, the defendants submitted that the agreements in relation to the advance payments are void because MLCA made unilateral and material alterations to the agreements, to which the defendants did not consent. Those alterations included the amount of the EA Advance and the change from BFI to BCC as the Producer (borrower) in the CF Advance documentation. In their written submissions on this motion, the defendants characterized those alterations as fraudulent.
Is there a genuine issue for trial?
[50] The defendants’ written submissions did not identify any credibility issues that would preclude summary judgment in this matter. In arguing that summary judgment was not warranted, the defendants listed certain “evidentiary issues” that they argued should “shake the confidence of the Court”:
neither Mr Juacalla nor another employee of Agriculture and Agri-Food Canada provided an affidavit. Mr Juacalla is easily accessible, despite the fact that he no longer works for MLCA. Adverse inferences should be drawn against the plaintiff for failing to provide those affidavits;
the plaintiff claimed that the handwritten notes in MLCA’s files from May 2008 were purportedly written by Mr Jim Juacalla, but the notes also refer to “Jim” and it is unlikely that the author would refer to himself in the third person;
Ms Schell commented on the handwritten notes in her affidavit, but she did not provide evidence about her own memories even though she appears to have participated in one of the telephone calls described in the notes;
Mr Rockburne did not testify about an important point he appeared to make (according to the notes) concerning paying all of the CF Advance to BCC;
there was an unexplained discrepancy between the amount owed (about $342,000) and the amount MLCA requested from the Minister (about $320,000);
the defendants suggested that additional evidence may have been withheld because the plaintiff omitted to present evidence that the CF Advance was paid to BCC (rather than to BFI).
[51] In my view, none of these points precludes the Court from granting summary judgment. None of the points raises any issues of credibility or presents an issue of fact or law that cannot be determined with confidence on this motion. I note:
the defendants did not articulate exactly what inference the Court should draw against the plaintiff for the absence of certain witnesses’ evidence;
the unexplained discrepancy in the amount owing is not relevant or material. As the plaintiff submitted in reply, it is apparently a result of differing interest rates agreed between different parties; and
the defendants’ point about withheld evidence is speculation.
[52] The defendants’ “evidentiary issues” arising from the May 2008 handwritten notes can be addressed together. The handwritten notes state:
May 23/08
Spoke to Jeff about Bezan Feeders Inc. and Bezan Cattle Corporation. Two companies are applying for an advance with the two same shareholders for both company (sic). Jeff said to relate the two companies and that they only get a max of $400,000.00 for both. Jeff suggested to do advance on Bezan cattle Corp so that it doesn’t require to be related
May 26/08
Jim and Jo-anne spoke to Jeff regarding the attributions with the company. Jeff said that they can only get $200,000.00 int bear. Producers is owing an APP $100,000.00
May 26/08
Spoke to Producer about advancing $200,000. Producer agreed to the amount.
[53] These notes appear to suggest that MLCA was considering both BFI and BCC together in late May 2008 and that the suggestion to make BCC the borrower for the CF Advance may have come from MLCA, not the Bezans. The second entry on May 26, 2008, appears to corroborate the Bezans’ testimony about a call between Ms Bezan and Mr Juacalla concerning the amount of the CF Advance just before the funds were transferred on May 27, 2008.
[54] Although the defendants did not object the admissibility of the handwritten notes, the notes have not been authenticated by their author. They appear on their face to have been made in late May 2008 in the ordinary course of business. I am also aware of the limitations on a witness refreshing their memory from another person’s notes and the requirements for notes to constitute a past recollection recorded.
[55] Although neither Ms Schell nor Mr Rockburne wrote the notes, both commented on their contents, Ms Schell to advise about their likely author (Mr Juacalla) and to comment on the contents based on her own experience dealing with producers and advance payments, and Mr Rockburne to say that he had no memory of the conversations but that what was recorded in the notes was consistent with what he usually would have said.
[56] I do not find the evidence in or concerning the notes to be salient, especially given the contents of Mr Rockburne’s and Ms Schell’s affidavits. As a result, any possible additional evidence that the plaintiff allegedly could or should have filed arising from the notes, or the witnesses’ testimony about them, would be of little value. The absence of this possible evidence as raised by the defendants in their list of “evidentiary issues” does not cause me to lose confidence in the other evidence in the record for this motion.
[57] Returning to the broader issue of a genuine issue for trial, the defendants have not raised any argument that there is a credibility issue to decide as between the evidence of the two witnesses, or that another genuine and appropriate issue exists for a trial. Considering also the record on this motion and the parties’ submissions, it would be an unnecessary use of the parties’ time and resources, as well as the Court’s, to send this matter to trial. Given the legal obligation on each party to put their best foot forward, and the contents of the motion records filed by the parties, the Court has the evidence to adjudicate this dispute fairly and justly on the record.
III. Should Judgment be granted against BCC on the merits?
[58] The plaintiff contends that after the defendants completed the application forms for the CF Advance, MLCA made a counteroffer that specified the amount of the advance and stated that BCC would be responsible for repayment, to which the plaintiffs agreed. The defendants submit that the agreements are void because MLCA unilaterally and fraudulently made material alterations to the terms of the two Repayment Agreements. The defendants also raise issues of economic duress and an unconscionable bargain. I will address these issues in turn.
Was there an enforceable agreement between BCC and MLCA?
(i) Did BCC’s conduct demonstrate an agreement with MLCA?
[59] The plaintiff relied on Saint John Tug Boat Co. v. Irving Refining Ltd., [1964] SCR 614 to support its position that BCC’s conduct constituted acceptance of MLCA’s counteroffer. In that decision, the Supreme Court of Canada concluded that an objective approach is required to determine whether a course of conduct constitutes acceptance of an offer. On the facts, a contract had been formed as a result of an oil refinery operator, Irving Refining Ltd., acquiescing to the continued provision of a tug boat’s services after an express agreement between them had expired (as summarized by the Supreme Court recently in Owners, Strata Plan LMS 3905 v Crystal Square Parking Corp., 2020 SCC 29 (Côté J., for the majority), at para 30).
[60] In the Strata Plan decision, after referring to Saint John Tug Boat, the Supreme Court stated that parties’ reasonable expectations are generally protected in the common law of contracts, which means that “a subjective mutual consensus is neither necessary nor sufficient for the creation of an enforceable contract” and that “a person may be bound by contractual obligations that she did not intend (subjectively) to assume”: Strata Plan, at para 31, citing Waddams, The Law of Contract (7th ed. 2017), at §§92 and 146. The Supreme Court observed that at common law, the risk arising from one party’s reasonable reliance on the existence of an agreement is allocated to the party whose conduct gave rise to a reasonable expectation that a contract between the parties would be legally binding: at para 31.
[61] In Saint John Tug Boat, the parties had an agreement for standby tug services in June and July 1961 based on terms in letters in March of that year. Irving had not accepted the proposed terms but did pay the plaintiff’s invoices as rendered. From July 31, 1961, to February 28, 1962, the tug boat company provided further standby service and issued invoices. Irving did not pay those invoices. The trial judge found requests for payment from the tug boat company and no written or verbal notification from Irving that it refused to pay during that period. The trial judge concluded that Irving had acquiesced to have the tugs on standby service on the terms set out in the earlier agreement, to avoid demurrage charges on Irving’s tankers.
[62] At the Supreme Court, the question to be determined in Saint John Tug Boat was whether Irving’s course of conduct from the end of July to February of the following year constituted a continuing acceptance of the offer so as to give rise to a binding contract to pay for the stand-by tug services at the rate specified in the invoices. At pages 621-622, Ritchie J. concluded that Irving “must be taken to have known” that the tug was being kept standing by for Irving’s use until the end of February 1962 and that the tug company expected to be paid as set out in the monthly invoices. From Irving’s course of conduct, it was reasonable to conclude that it accepted the continuing services on the terms proposed in the March 1961 correspondence. The tug company was entitled to recover the sums charged in the invoices as being “money due pursuant to a contract which was concluded by [Irving’s] own acquiescence”.
[63] This Court has applied or referred to the contract law principles in Saint John Tug Boat in Ehler Marine & Industrial Service Co. v “M/V Pacific Yellowfin” (The), 2015 FC 324 (Simpson J.), at para 26; Blais v Canada (Attorney General), 2004 FC 1638 (Harrington J.), at para 26; and Trans Tec Services Inc. v. LYUBOV ORLOVA (The), 2001 FCT 958 (Mackay J.), at paras 14-18.
[64] In the present case, the evidence demonstrates much more than the acquiescence that gave rise to contractual obligations in Saint John Tug Boat. The Bezans took action themselves – positive steps – that affirmed that it was BCC’s obligation to repay the total amounts owed to the plaintiff under the EA Advance and the CF Advance. There is clear and unequivocal, repeated evidence over a long period of time demonstrating that both parties reasonably expected, and BCC agreed in substance, that BCC would be legally responsible to repay (as discussed further below). In addition, the defendants did not raise any issue as to the amount owing or whether BCC was the correct borrower before the commencement of this proceeding, despite many opportunities to do so. The Bezans’ testimony on this motion also did not question that MLCA advanced the money in the quantum claimed for repayment.
[65] I will not repeat the chronology of events set out already. Instead, I will highlight the following.
[66] By the end of April 2008, the Bezans had caused BCC to apply for emergency funding and MLCA had transferred the EA Advance of almost $100,000 to BCC. At least some of that money had “immediately” been used to pay an account receivable of BFI. From the Bezans’ perspective, money advanced to one of their companies (BCC) could be used by another company (BFI) even while the first was contractually responsible for repayment.
[67] Starting in May 2008, MLCA sent correspondence to BCC (to the attention of the Bezans) that confirmed BCC’s responsibility to repay the two advances. The correspondence started with MLCA’s confirmation letters dated May 21 and August 25, 2008, with enclosures. In total there are eight letters addressed to BCC from MLCA concerning its liability to repay money advanced.
[68] In addition, the Bezans caused BCC to be bound by signing legal documents in relation to the stays of default, the acknowledgement agreement and the Settlement Agreement. Those documents confirm not only the quantum of money owed, but that BCC is required to repay that amount. In total, there are four documents executed by one or both of Mr Bezan and Ms Bezan that confirmed that BCC was responsible to repay the advances, not counting the executed applications for the EA Advance and the CF Advance in April/May 2008. Those four documents are dated in May 2009, December 2010, May 2011 and November 2011.
[69] The terms of the Settlement Agreement, executed by the Bezans on behalf of BCC, included the following clear and substantive provisions that confirmed the parties’ respective understanding and agreement:
Between (Name of Producer): Bezan Cattle Corporation
And (Name of Administrator): Manitoba Livestock Case Advance, Inc.
Settlement Agreement
Whereas the Producer has defaulted with respect to the advance given to the Producer by the Administrator in the amount of $300,000 dollars for the agricultural product in the 2008 production period …
Whereas the Producer owes the Administrator the amount of $300,000 dollars including interest on any interest-free advances from the date of the advance (May 26, 2008) to the date of default (July 1, 2011) …
[…]
Repayment of debt shall be made as follows:
$500.00 dollars on the 15th day of each month beginning on AUGUST 15, 2012 + LUMP-SUM PAYMENTS OF $60,000/YEAR FOR FIVE YEARS WHERE CALVES ARE SOLD (USUALLY IN THE DECEMBER TO FEBRUARY TIMEFRAME NORMALLY DECEMBER OR JANUARY)
[…]
Where the Producer has breached any term of this settlement agreement, the Producer shall consent to the Administrator taking judgement against the Producer in the amount of $300,000 representing the amount of the principal owing on the advance and accumulated interest to the day of the breach, plus interest at a rate…
[Original emphasis throughout.]
The words in capital letters in this excerpt and the reference to $500.00 were added in handwriting.
[70] As described already, BCC began to perform the terms of the Settlement Agreement. BCC made monthly payments of $500 by cheque to MLCA for a year, from August 2012 to July 2013. Eleven of the 12 monthly cheques were reproduced in the record for this motion. Each cheque bears the pre-printed name “Bezan Cattle Corporation”. Each one is made out in handwriting and is signed by Mr Bezan on behalf of BCC.
[71] Thus, on thirteen occasions, BCC paid MLCA by cheque either to pay down the advances or to pay an administrative fee. (The other was the administration fee mentioned above.)
[72] Despite all of these contacts with MLCA over the years, all with BCC, and in addition to signing documentation that bound BCC to repay, the defendants adduced no evidence that they ever raised any issue or objected to the quantum of the debt owed or about BCC being the primary obligor to repay the two advances.
[73] In addition, there is no evidence that either party considered BFI to be responsible for repayment of the two advances. There are no letters from MLCA to BFI, nor any letters or cheques from BFI to MLCA, nor any letters from either Mr Bezan or Ms Bezan to MLCA that refer to BFI as a borrower after May 2008.
[74] There is no documentary evidence – prior to this lawsuit – indicating that Mr Bezan or Ms Bezan ever advised MLCA or the Minister that they, or BCC, believed that BFI was the proper counterparty to MLCA for either of the Repayment Agreements.
[75] Applying the contract law principles set out in Saint John Tug Boat and Strata Plan, I conclude that BCC, by its conduct, agreed with MLCA to repay the EA Advance and the CF Advance in accordance with the terms of the Repayment Agreement.
(ii) The Defendants’ Fraud Allegation
[76] The defendants alleged that MLCA’s alterations to the application documents constituted a fraud and that the agreement was therefore void, referring to Collins v Melfort Credit Union (1995), 133 Sask R 166 (QB), aff’d (1996), 144 Sask R 67 (CA).
[77] The circumstances of Collins are markedly different from the present case. In Collins, the credit union altered documents when it discovered that a borrower/mother was in financial difficulty or when it was served with papers concerning the mother’s insolvency, in order to enable the credit union to seize trust money of her children to repay the mother’s loan. The credit union applied to the Court to rectify the documents in equity, which the Court denied because the documents had been altered after the fact in an effort to keep the money out of the bankrupt mother’s assets. The Court also found the documents void, which led to the seized money being reinstated to the children’s account.
[78] By contrast, in this case, the defendants received the EA Advance and the CF Advance that they requested under a statutory program designed to assist farmers in financial need. As Ms Bezan’s affidavit confirmed, the effects of BSE had made their financial situation dire. There is no debate about whether MLCA advanced the money it now claims. There is no evidence that MLCA made alterations to the documents to obtain a financial benefit for MLCA or any individual. Any issue as to whether one corporation qualified for the advances under the programs is a matter between MLCA and the Minister or MLCA and its employees. I am unable to conclude that the circumstances give rise to any fraud as understood in Collins.
[79] The defendants also referred to CIBC v Skender (1985), 67 BCLR 126 (CA), a decision concerning the enforceability of a guarantee when a bank employee filled in the blanks in a guarantee. While the precise issue and facts in Skender were different from the present case, the conclusion reached here is consistent with the reasoning of Lambert JA (at paragraphs 10-15).
(iii) The Evidence of Alterations to the Application Documents
[80] I acknowledge the Bezans’ testimony that they did not authorize the changes to the application documentation in relation to the two advances. I accept that they did not “authorize” those changes. If a single post-advance confirmation letter from MLCA to BCC were the only evidence of BCC’s alleged commitment to repay the funds and there were no documents signed by the Bezans on behalf of BCC, or payments by BCC, or letters to BCC about its liability to pay, or evidence that BFI was the borrower, the situation might be different and the evidence of oral discussions between the Bezans and MLCA representatives in May 2008 might arguably affect the outcome of this proceeding.
[81] But that is not the evidence before the Court on this summary judgment motion. The Court is required to have a hard look at all of the evidence and must assume that both parties have presented all the evidence they can to advance their positions. The Bezans did not testify as to conversations in May with MLCA representatives (with one exception, as noted above). The Bezans’ evidence about unauthorized alterations to the application documents does not affect the overwhelming weight of the documentary evidence that through their own actions after May 2008, they agreed that BCC was the entity that was legally responsible for repayment. In short, their alteration evidence on this motion does not alter the substance of the legal agreement between the parties, either as to the quantum to be repaid or as to which corporate entity must repay it.
[82] I note also that the evidence disclosed that the Bezans were aware of the corporate entities they used. They operated their farming business through at least three different corporate entities, including BCC and BFI (see Ms Bezan’s letter dated April 29, 2008). They do not suggest in their submissions or evidence that they did not understand the different obligations agreed to by the different corporations; to the contrary, their evidence and position about not author