Court of Appeal for Ontario

Date: 2019-11-28 Docket: C65803

Judges: Watt, Hourigan and Trotter JJ.A.

Parties

Between

St. Laurent Automotive Group Inc. and Import Auto Leasing Inc. Plaintiffs (Respondents)

and

Sami's Garage Ltd., Yassine Jabbar, Sami Abi Khaled and Dmitri Khalife Defendants (Appellants)

Between

Sami's Garage Ltd. and Sami Ani Khaled Plaintiffs by Counterclaim (Appellants)

and

St. Laurent Automotive Group Inc., Import Auto Leasing Inc., John Mierins, Andrea Chambers, Yassine Jabbar and Dmitri Khalife Defendants by Counterclaim (Respondents)

Counsel

Diane Condo, for the appellants Gary Boyd, for the respondents

Hearing and Appeal

Heard and released orally: November 25, 2019

On appeal from: the judgment of Justice Toscano Roccamo of the Superior Court of Justice, dated July 16, 2018.

Reasons for Decision

[1] This appeal and cross-appeal arise from a scheme perpetrated by Dmitri Khalife and Yassine Jabbar in which they fraudulently sold used vehicles. The respondents, St. Laurent Automotive Group Inc. and Import Auto Leasing Inc., were victims of the scheme. They commenced an action for conversion against the appellants and the appellants brought a counterclaim for conversion.

[2] The trial judge found the appellant Sami's Garage liable for conversion in relation to five missing vehicles and fixed damages at $40,792. She dismissed the respondent's claim for conversion regarding certain consigned vehicles and the counterclaim for other consigned vehicles. Those conversion claims were dismissed because the trial judge found that the parties acquired the vehicles in good faith without notice of the sellers' defect in title. The trial judge ruled that the parties should bear their own costs.

[3] On appeal, the appellants argue that the trial judge erred in: 1) finding the five missing vehicles were stolen; 2) misapplying the law regarding mitigation of damages; 3) fixing the quantum of damages; 4) failing to adjudicate the counterclaims for misrepresentation and unjust enrichment against the respondent; and 5) failing to adjudicate the counterclaim for contribution and indemnity as against Mr. Jabbar.

[4] The respondents cross-appeal, submitting that the trial judge erred in finding that Mr. Khalife was a "mercantile agent" within the meaning of s. 25 of the Sale of Goods Act, R.S.O. 1990, c. S. 1. Accordingly, they argue that their claim for conversion should be allowed. They also submit that the trial judge's costs ruling should be set aside and that they should be awarded their trial costs.

Appellants' Arguments

[5] We do not give effect to any of the appellants' grounds of appeal.

[6] The factual finding that the vehicles were stolen was rooted in the evidence and does not disclose a palpable and overriding error.

[7] The appellants' submission regarding mitigation of damages is based on a conflation of the law of contributory negligence and mitigation. The trial judge properly applied the law of mitigation and we see no legal error.

[8] We also see no error in the fixing of damages, as the trial judge's calculation was based on the evidence in the record.

[9] It is conceded by the respondents that the trial judge failed to adjudicate the claims for unjust enrichment and negligent misrepresentation. We are not satisfied that a claim for unjust enrichment could succeed. The respondents actually lost money on the counterclaim vehicles and therefore did not obtain an enrichment. There was also a juristic reason for any enrichment, given the trial judge's finding that the respondents acted in good faith and in the absence of any notice of defect in title when they purchased the counterclaim vehicles.

[10] With regard to negligent misrepresentation, there is no evidence of a special relationship between the parties and no specific representations were alleged to have been made. Therefore, a claim for negligent misrepresentation cannot succeed.

[11] The respondents do not object to an order being made for contribution and indemnity as against Mr. Jabbar. The trial judge did not advert to this issue in her reasons. The order sought will issue.

Respondents' Cross-Appeal

[12] With regard to the cross-appeal, the principal issue is whether the trial judge erred in finding that Mr. Khalife was a mercantile agent. We do not give effect to this argument. Given the trial judge's finding that the respondent provided Mr. Khalife with free reign to take consigned vehicles off the lot to sell them to customers, there was a proper evidentiary basis for making this finding.

[13] Finally, we are not satisfied that the trial judge erred in her costs award. There was mixed success at trial and it was within her discretion to award no costs.

Disposition

[14] The appeal is dismissed, save for the claim for contribution and indemnity against Mr. Jabbar. The cross-appeal is dismissed. As success here is also divided, there will be no order as to costs of the appeal and cross-appeal.

David Watt J.A. C.W. Hourigan J.A. G.T. Trotter J.A.