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DATA BUSINES

FORMS LTD V.
MACINTOSH

facts

DBFL
(Data)
ON

Credit
Line
Similar

No Express
Notice

Pakfold
NS

Registered

MacIntos
h
Business
Systems

Credit
Line
Dist: Appl

No Express
Notice

MacIntosh
Bus Sys.
Sole Prop:

(A division
of Maritime
Business
forms Lt

MacIntos
h
Business
Systems

Division

Maritime
Bus Forms
Ltd.

Cheque
Payee:
Data/Pakfold
Payer: Maritime
As we know that sole proprietorship is an legal entity with
one owner and carriers unlimited personal liabilities
Reg: July 22,
1982

Time of

Events

Timeline of events

issues

Issue # 1
Did the defendant, Glenn
Macintosh, contract for the
purpose of goods and
services in the amount
agreed upon, in his
personal capacity or as
agent for Maritime
business forms limited?

Issue # 2
If the plaintiffs are
successful are they
entitled to interest in what
amount?

Sole proprietorship
&
Corporation

Sole Proprietorship
The simplest form of a business is a sole proprietorship. One
person performs all the functions required for the successful
operation of the business and assumes all the liabilities.

Corporation
A corporation is a legal entity that is separate and distinct from
its owners. Corporations enjoy most of the rights and
responsibilities that an individual possesses; that is, a
corporation has the right to enter into contracts, loan and
borrow money, sue and be sued, hire employees, own assets
and pay taxes. It is often referred to as a "legal person."

Precedent
Trail Tire Service Ltd. v. Scobie
In
order
to
claim
limited
liability
protection, the party must give ample
notice to suppliers of the change in status
particularly where the new business is
carried on in the same premises and the
former name is used.
There must be no doubt left in the minds of
the supplier that what is being done is as
agents and officers of the new corporation

Application

Glenn MacIntosh never provided


express notice to either Data or Pakfold
that purchases made after the
incorporation were being by the
incorporated company.

Glen
MacIntos
h

Precedent
Gelhorn Motors Ltd. v. Yee and
Wilcox
the mere giving and acceptance of
cheques should not have led to an
inference that the corporation had
become the debtor in place of the
defendants.

Application
Over the course of 1980 to 1981, cheques
made to both Data and Pakfold were
imprinted with the name Maritime
Business Forms Ltd..
According to the case law shown above,
the manner in which the cheques were
provided would not be sufficient evidence
as to whom the actual debtor of that
account was.

An argument in favor of the


defendant
There is some evidence it suggests that
Data could have known the nature of
Macintoshs incorporation based on their
business communication
1. Cheques
2. Two letters that contained the
letterhead MARITIME BUSINESS
FORMS LTD. in large fonts

Decision

Law for Issue #2


Under

ss. 11, s. 38 paragraph (c) of the


Judicature Act as to whether or not the
plaintiff is responsible for undue delay in
litigation.
Although Judicature Act
orders court to reward interest, it allows
the court's discretion (ss.11 s38)
Notice: The parties have agreed the
total amount that is due and owing is
$14,155.71

Decision for Issue #2


10% interest was agreed upon in trial,
TheFIRST ACTION taken in good time,
SECOND ACTION delayed unreasonably
over which interest would have been
rewarded,
Therefore interest will be rewarded
for a period of two years only, at 10%
on $14,155.71.

Lifting the corporate veil


ALL conditions that must satisfy:
The individual must control the
corporation.
The control must have been exercised to
commit a fraud, a wrong, or a breach of
duty.
The misconduct must be the cause of the
plaintiffs injury.

Conclusion
Neither

Data Business Forms LTD or


Pakfold knew of the existence of
Maritime Business Forms LTD.
Data Business Forms LTD (Plaintiff) WINS
the case.
MacIntosh (defendant) ordered to pay
full amount owed + 10% interest for the
amount of 2 years.

Quiz
1. Does notice need to be given when a proprietorship is
incorporated, if it does not change the outcome of the business?
Yes!, It does not matter if the business is directly affected
or not. A company who has incorporated has the duty to
inform people who they are doing business with of the
change in their entity.
2. Does notice of incorporation have to be given orally or written?
It is highly recommended for businesses to let people who
they are doing business with a direct letter, call or notice.
However, as long as the changes made are extremely
apparent to the general public, it can be deemed
reasonable that sufficient notice has been given.

Discussion

What if Macitosh , Maritime business forms ltd.


didnt give the notice that they were limited
company
to Data/Pakfold
but however
the
defendant used it on several occasions when
payment of arrears was being sought by the plaintiff.
There was a long relationship between the parties
following the incorporation, furthermore defendants
account carried on the plaintiffs book was maritime
business forms ltd. And they are located in the same
area the defendant trucks and stationery bore had
their name written clearly. So what do you think was
plaintiff aware of it?

Best WISHES for the


EXAMS

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