Peter had always worked for others as an employee and while he saw the merit of a regular paycheque, paid vacation and other benefits, he decided that he wanted to go into business for himself. He wanted to be in charge of his work and if business went well, he hoped to profit greatly. He debated whether he should form a sole proprietorship or a company. He liked the sound of having his own company and so decided to create one. Wanting to save money, he got the required blank forms from the internet, completed them, conducted the required search for an acceptable company name and filed his documents with the corporate registry.

When Peter was filling out the Articles of Incorporation, he intentionally put in a clause that said that his company would not be allowed to borrow more than $10,000 from any financial institution. He did that to prevent himself from getting into too much debt as he had run into debt problems in his personal life in the past. Peter asked his girlfriend Molly and his brother Wally if they wanted to be officers and directors in his new company. Molly and Wally liked the idea of a fancy title with little or no responsibility and both said yes. The incorporation documents listed the following:

President - Peter

Vice-President - Wally

Secretary - Molly

Treasurer - Molly

Directors - Peter, Wally and Molly

Shareholders - Peter - 90%; Wally - 5%; Molly - 5%

The incorporation documents were filed and a few days later, Peter received the Certificate of Incorporation which indicated that his company, Able Landscaping Ltd., was now a registered Alberta corporation. Peter's home was listed as the registered office for the company. Peter then set up a company bank account at the Toronto Dominion Bank ("TD") and obtained a company Visa card from TD with a $10,000 credit limit.

In order to commence business operations, Peter had to purchase some equipment. Peter already had a Dodge pick-up truck worth $10,000 registered in his own name so he used that for his company business as well as his personal needs. He had to buy a trailer to hold his landscaping equipment and went to DEF Trailers Ltd. for that purpose. DEF had a suitable trailer for Peter's purposes and Peter purchased it for $7,500 using his new TD company credit card to pay $2,000 down and the rest on monthly payments. The purchase contract was made out in the name of Peter's Landscaping Ltd. Peter also had to buy some mowers and related equipment and purchased all of those items at Home Depot for $2,450, all on his company TD Visa.

Now that Peter had a truck, trailer and equipment, he was ready to start his business. Peter was successful in getting a number of commercial and residential customers right away and in fact had so much business that he had to hire two employees, Bart and Melissa, to get the work done. Both Bart and Melissa were employees of the company and their paycheques reflected that arrangement.

As business continued to grow, it was necessary for Peter to buy a second truck and trailer and load it with landscaping equipment. To make these purchases, Peter needed to borrow money from the bank. He went to the TD Bank and asked for a loan to his company in the amount of $35,000. The bank said that it would be prepared to loan that much money to Able Landscaping Ltd. but that since Able had not made that much money yet, Peter would have to sign a personal guarantee for the full $35,000. Because Peter could not see any problems with this and because he needed the equipment in order to expand his business, he signed the loan agreement and the personal guarantee. A Chevy truck, a trailer and all of the necessary equipment was purchased with the advanced funds and business continued as usual.

Peter, Wally and Molly often purchased lottery tickets together with the stated intention that they would equally share any winnings. Peter and Wally had not contributed to the lottery ticket purchases for over four months and so Molly continued to buy them on her own. As luck would have it, one of Molly's tickets won! Molly received a cheque for $5,000,000 from the Alberta Lottery Corporation. Peter and Wally asked for their share and Molly pointed out that they had not paid any money into the lottery purchases for over four months and had not purchased any tickets for the group. She said that the ticket she won on was her own personal ticket and that she was not going to share.

One day, while Bart and Melissa were driving the Dodge truck and trailer to a jobsite, they were involved in a motor vehicle collision. Bart was distracted by looking down at his smartphone and drove into an intersection without stopping for the stop sign. The Able truck broadsided another vehicle, being operated by Alphonse. Alphonse had been lawfully proceeding through the intersection. Thankfully, there were no injuries to Bart and Melissa but Alphonse's vehicle suffered $8,000 in damages and Alphonse suffered from whiplash.

Due to poor money management by Peter, Able Landscaping Ltd. fell behind on its loan payments to TD Bank. TD Bank notified Peter that his company was in default on the $35,000 loan and they wanted their money. When Able failed to pay, TD demanded that Peter pay the money owed ($33,500), relying on the personal guarantee. Peter also failed to make all required payments to DEF Trailers Ltd and they wanted the outstanding amount of $4,500 paid to them.

Bart and Melissa were each owed $5,000 in wages by Able Landscaping Ltd. They wanted their money and kept Peter's Chevy truck as collateral for the money owed to them.

You have a line-up outside your office door as you are a brilliant lawyer, all the more brilliant for having taken the Business Law course at the University of Lethbridge as part of your Management degree before going to Harvard Law School on a full scholarship.

For each of the following people and businesses, please advise them as to whether they have a cause(s) of action in relation to their claim, against whom and why. Also advise them on the likelihood of success in any such litigation. Further, advise them of any recommended alternate courses of action they could pursue.

1. TD Bank is owed $33,500.