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Assignment - Equitable. Cardtronics Canada ATM Management Partnership v. Dawson [invoice]
In Cardtronics Canada ATM Management Partnership v. Dawson (Div Court, 2024) the Ontario Divisional Court dismissed an defendant's appeal, this from a successful Small Claims invoice action.
Here the court addresses an invoice action where the contract was made with one party, but the invoice was issued by another - with no formal notice of assignment being sent to the debtor. While equitable assignment may have been the appropriate doctrine to advance here it was not mentioned:[19] The Appellant also contends that his contract, the ISO Transaction Processing Agreement dated June 15, 2015, was with Cardtronics Canada Ltd., which was not a party to this action. The only witness called by the Plaintiff was unable to explain the corporate structure and how Cardtronics Canada Ltd. was related to Cardtronics ATM, which sent out the invoice upon which the action was based.
[20] The ISO Transaction Processing Agreement was only one document that was an Exhibit at the trial. There was also the Purchase Order dated March 1, 2018, which was signed by the Defendant Dawson. This Purchase Order was the document by which Dawson ordered the 10 ATM machines. The Vendor is referred to only as “Cardtronics”. There was also an ATM Shipping Confirmation, which confirmed that “Cardtronics” had shipped the 10 ATM machines on March 7, 2018, and a Purolator Bill of Lading, a Purolator Shipping Confirmation and a Purolator Freight Proof of Delivery dated March 16, 2018. Finally, there was the Invoice sent from Cardtronics Canada ATM Management Partnership dated March 9, 2018.
[21] In my view, there was sufficient evidence upon which the trial judge could conclude that the Defendant purchased and took delivery of the ATM machines, and that the debt was owed to the corporate entity – Cardtronics ATM – that sent the invoice. It was not necessary for the Plaintiff’s witness to understand the intricacies of the corporate structure; the fact that the invoice went out from Cardtronics ATM was sufficient to prove that the debt was owed to that Plaintiff. The trial judge could reasonably infer from the evidence given that the ISO Transaction Processing Agreement signed by Cardtronics Canada Ltd. was assigned to Cardtronics ATM for collection, as alleged by the Plaintiff in its Statement of Claim. This was a finding of fact, and the trial judge did not make a palpable and overriding error in making this finding. Indeed, no other reasonable inference is available.
. Nadeau v. Caparelli
In Nadeau v Caparelli (Ont CA, 2016) the court discusses the requirements of equitable assignment in the context of an appeal from a summary judgment below:[18] The parties agreed no assignment of the Note took place from 111 to Nadeau that complied with s. 53(1) of the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34.[1] The issue on the motion then became whether Nadeau had demonstrated no genuine issue requiring a trial existed as to whether 111 had made an equitable assignment of the Note to Nadeau.
[19] Equity does not require a particular form to effect a valid assignment, but whatever form is used must clearly show an intention that the assignee is to have the benefit of the debt or chose in action assigned: Halsbury’s Laws of Canada, “Personal Property and Secured Transactions” (Markham: LexisNexis Canada, 2013), at HPS-110 and HPS-111; G.H.L. Fridman, The Law of Contract in Canada, 6th ed. (Toronto: Thomson Reuters Canada, 2011), at pp. 648-49. As summarized by Michael Furmston in Cheshire, Fifoot & Furmston’s Law of Contract, 16th ed. (Oxford: Oxford University Press, 2012), at p. 636:The transaction upon which the assignee relies need not even purport to be an assignment nor use the language of an assignment. If the intention of the assignor clearly is that the contractual right shall become the property of the assignee, then equity requires him to do all that is necessary to implement his intention. The only essential and the only difficulty is to ascertain that such is the intention. [Citations omitted.] ....
[27] DiGuilo clarified that there are four kinds of assignments: legal assignments of legal and of equitable choses in action, and equitable assignments of legal and of equitable choses. According to DiGuilo, the following principles determine whether an assignee must join an assignor as party to an action to enforce an assignment:(i) In the case of a legal assignment of either a legal or equitable chose – i.e. an assignment that complies with s. 53(1) of the Conveyancing and Law of Property Act – the assignee can sue alone: DiGuilo, at p. 397;
(ii) An assignee also can sue alone where there is an equitable assignment of an equitable chose in action. This followed from rule 89 (then rule 88) of the former Rules of Practice, R.R.O. 1980, Reg. 540, as amended, which stated: “An assignee of a chose in action may sue in respect thereof without making the assignor a party.” In DiGuilo, this court limited the scope of former rule 89 to equitable assignments of equitable choses in action (at p. 402-3);
(iii) In the case of an equitable assignment of a legal chose in action, however, the assignee must join the assignor as a necessary party (at pp. 397 and 403). [28] When, in 1985, the Rules of Practice were replaced by the Rules of Civil Procedure, former rule 89 gave way to what is now rule 5.03(3), which states:5.03(3) In a proceeding by the assignee of a debt or other chose in action, the assignor shall be joined as a party unless,
(a) the assignment is absolute and not by way of charge only; and
(b) notice in writing has been given to the person liable in respect of the debt or chose in action that it has been assigned to the assignee. [29] The motion judge did not refer to rule 5.03(3) in his reasons, and it is not clear that the parties drew his attention to it.
[30] The impact of rule 5.03(3) on the principles of joinder laid down in DiGuilo has not received prior consideration by this court. In the present case, the parties agreed the assignment of the Note did not meet the requirements of s. 53(1) of the CLPA. It follows that the assignment was an equitable assignment of a legal chose of action. While the principles stated in DiGuilo would require the joinder of the assignor for an action on such an assignment, in my view rule 5.03(3) modifies DiGuilo to the following extent: as long as the assignment was absolute and notice in writing was given to the appellants of the assignment, Nadeau was not required to join 111 as a party.
....
[32] Since the appellants contend the assignment of the Note did not meet the requirements of r. 5.03(3), I would conclude by observing that even if it did not, in the circumstances of this case there would be no reason to interfere with the motion judge’s conclusion that the appellants did not suffer any prejudice from the joinder of 111. An equitable assignee’s failure to add an assignor as a party would be an irregularity, leaving it open to the motion judge to “grant all necessary amendments or other relief, on such terms as are just, to secure the just determination of the real matters in dispute”: rule 2.01(1).
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