COURT OF APPEAL FOR ONTARIO

CITATION: Halton School of Equitation Company Limited v. 2155486 Ontario Inc. (Halton School of Equitation), 2014 ONCA 112

DATE: 20140210

DOCKET: C57330

Juriansz, Lauwers and Pardu JJ.A.

BETWEEN

Halton School of Equitation Company Limited

Applicant (Appellant)

and

2155486 Ontario Inc., c.o.b. as Halton School of Equitation; Laura Colgan, c.o.b. as Georgetown Equestrian Centre; Jennifer Green; Nancy Carnwath; Helson Kogon Ashbee Schaljo & Associates LLP; William (“Bill”) Simmons, c.o.b. as Claremont Horse Auctions; and John Doe and Person or Persons Unknown at the Time of Pleading

Respondent (Respondent in Appeal)

Thomas Arnold and Steven Foster, for the appellant

William Kort, for the respondent Laura Colgan c.o.b. as Georgetown Equestrian Centre

Heard and released orally: January 31, 2014

On appeal from the judgment of Justice C. William Hourigan of the Superior Court of Justice, dated June 14, 2013.

ENDORSEMENT

[1] The application judge applied the doctrine of estoppel by convention to allow the respondent to realize upon her lien under the Innkeepers Act despite her failure to strictly comply with s. 3(2) of the Innkeepers Act. The respondent cared for a herd of horses, the owner did not pay her for her services, and so she auctioned the horses to realize her statutory lien provided by s. 3(1) of the Act. Section 3(2) of the Act requires the statutory lien holder to provide two weeks notice of the intended sale by advertisement in a local newspaper. The respondent gave less than the required statutory notice. She advertised the intended sale on November 24, 2011 and the auction sale took place on December 4, 2011.

[2] The appellant held a security interest in the horses under the Personal Property Security Act.

[3] The appellant does not take issue with the application judge’s findings of fact and accepts that those facts would support the application of the doctrine of estoppel by convention if it is available as a matter of law. The appellant’s position is that the doctrine is not available. It argues that the respondent’s lien is purely statutory and strict compliance with the statutory notice period was a precondition to the respondent’s right to be paid out of the sale proceeds. The appellant acknowledges that the respondent had a lien under s. 3(1) but argues the lien expired on the sale of the horses on notice that was four days short of the notice required by s. 3(1).

[4] The appellant submits that the purpose of the notice provision is to provide the owner and secured creditors a reasonable opportunity to redeem the property, and to give the public adequate notice of the sale.

[5] In our view applying the doctrine of estoppel against the appellant in this case is compatible with the purpose of the statute in creating the lien and prescribing a notice provision. The owner of the horses had notice of the sale and the opportunity to redeem and in fact engaged in unsuccessful negotiations to redeem. Significantly, the owner makes no objection to the sale and no claim for any share of the proceeds. No member of the public complains of inadequate notice. The appellant is the only secured creditor on record. Significantly though, the appellant knew about the sale and was content it proceed as scheduled, with a view to claiming the excess funds.

[6] The overarching legislature purpose of s. 3 of the Innkeepers Act is to give the respondent a statutory lien over the horses for her unpaid charges for caring for them. It would not further that legislative purpose to apply the notice provision to effectively nullify the lien in circumstances where the appellant cooperated with the respondent in arranging the auction and in effect authorized the auction. The application judge did not err in applying the doctrine of estoppel by convention in the circumstances of this case.

[7] The appeal is dismissed, with the respondent’s costs fixed in the amount of $8,000 all inclusive.

“R.G. Juriansz J.A.”

“P. Lauwers J.A.”

“G. Pardu J.A.”