“The scope was unreal” “The scope was unreal” The Chateau World Promissory Notes When consumers made the decision to join “the club”, financing arrangements were offered.  In addition to the contracts that were presented, financed members were also asked to sign promissory notes.  “It is just a legal promise to pay” members were told. While it is true that a promissory note is a promise to pay,  there are specific legal requirements to a promissory note- and the ones Chateau World asked people to sign,  were not promissory notes under the legal definition.   The Bills of Exchange Act defines a promissory note as: The very first issue with the Chateau World promissory notes is that they are riddled with conditions. As we see in  the legal definition above, promissory notes are unconditional.  Generally, promissory notes are very simple; Not much more complex than a cheque.  For example:  176. (1) A promissory note is an unconditional promise in writing made by one person to another person, signed by the maker, engaging to pay, on demand or at a fixed or determinable future time, a sum certain in money to, or to the order of, a specified person or to bearer. The format is flexible; both of these  examples are typical of a legally  binding promissory note. No  conditions, simple, to the point and  falling within the legal definition of a  promissory note.  Chateau World promissory notes are very different. They contain conditions, they begin with the statement “for value received” (which of course, at the time the “notes were signed, no value had been received and in most cases, no value ever was received.) The “promissory notes” used by the club were much different, and written more like contracts. The Chateau World “promissory notes” are, in fact,  nothing of the sort.  Riddled with conditions and anything but simple, this  document was never intended to be legally binding. It was  intended to convince members they were legally obligated  to pay. The club was never about what was true- it was about  what people could be made to believe.  If people believed they had no choice but to pay, then  they would do so... they banked on it. In 2007, a “promissory note” very much like the one you  see here was entered into evidence in Goodwin vs. Royal  Club et. al. At that time, Judge N.R. Hess made it very  clear that this is not a real promissory note and that it was  not enforcable as such. “No court would accept this  document as a promissory note” he explained “It is not  worth the paper it is written on.”  At best, one might argue that these are contracts, or  make up part of the Chateau World contracts. The club  had however, from the very start, breached it’s own  contracts with each and every member at signing.   The contracts represented the vacation properties as  being held in trust (which would have ensured that  members still had vacation properties even after the club  failed) But nothing of the sort was true. Andre Muran et.al.  were using the units at the properties for straw-man  mortgage fraud deals.  Click to enlarge When some members became wise to the game, and would  threaten the club with formal complaints to Service Alberta,  staff members would offer members the opportunity to walk  away from their memberships. The “voluntary surrender form”  was another bogus contract that was intended to make  members believe that they could only be released from their  membership agreements if they promised never to try and sue  the club and never to try and get their money back. It was an  unenforceable “contract”. The sole purpose, again, was to  make people believe that they could not do anything about the  fraud once they had discovered it.  This “contract” has the member promising not to share what  they know with a third party unless required to do so by court  order and willingly giving up any money they had paid. The  club would have people believe that legal action would be  taken against them if they breached this agreement.  In reality, it is not possible to contract out of the law. The activities were illegal and they knew it. This “contract” was,  like the “promissory note” never intended to be legally binding.  It was intended only to ensure the member believed they were  contractually obligated to keep quiet, never inform authorities  and never hold the club accountable for their crimes.  Interestingly, the above “voluntary surrender release” was dated 2009 and would  (presumably) create an agreement between the member and “Royal Club International”-  not Chateau World.  Royal Club International (another Andre Muran corporation) was struck from the corporate  registry in 2006. Andre Muran represented to Service Alberta that he had ceased  operating that corporation in 2005.  Crelogix and the Promissory Notes:... Travelers Acceptance (which later became Crelogix Acceptance) purchased “promissory  notes” from Chateau World and, within 4 months, filed a lawsuit against Chateau World for  misrepresentation. The court awarded Crelogix the full amount it had paid for the  “promissory notes” but Travelers/Crelogix chose to continue collecting on them. Apart from  the issues with collecting what was not owed and also the  legal protection provided to  consumers who cancelled their memberships under the Fair Trading Act (which ends the  contracts and any debts owing including promissory notes) Crelogix appears to have  another legal issue with the collection on these notes:  © L.Goodwin 2011-2012