ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-11-437320
DATE: 20131021
BETWEEN:
WELLS FARGO EQUIPMENT FINANCE COMPANY
Plaintiff
– and –
10736 NF INC. and WALTER GORDON GENGE also known as GORDON WALTER GENGE
Defendants
David Brand, for the Plaintiff
Gordon Genge, self-represented
HEARD: August 30, 2013
t. mcewen j.
reasons for decision
introduction
[1] The plaintiff, Wells Fargo Equipment Finance Company (“Wells Fargo”), brings this motion pursuant to rule 20.01(1) seeking an order for summary judgment in respect of its claim against the defendant Walter Gordon Genge (“Genge”) in the amount of $172,107.08 plus prejudgment interest at the rate of 18% and costs.
background
[2] Wells Fargo is in the business, amongst other things, of leasing and financing trucks, trailers, tractors, excavators and other equipment throughout Canada. It was incorporated pursuant to the laws of the Province of Nova Scotia and has various offices, with its head office being in Toronto, Ontario. Genge resides in the Province of Newfoundland and Labrador.
[3] The co-defendant 10736 NF Inc. (“10736”) failed to defend the action and has been noted in default.
[4] Wells Fargo alleges that it entered into five written lease agreements (the “agreements”) with Genge and 10736 in 2009 with respect to various equipment it leased to them. It is not disputed that Genge is the director of 10736.
[5] Ultimately, 10736 and/or Genge stopped making lease payments. Wells Fargo took possession of the equipment, sold it and commenced this action for the shortfall of the realized value of the equipment as per the terms of the agreements.
the issues
[6] Genge essentially raises four defences as follows:
It has not been proven by Wells Fargo that he executed any of the agreements.
The Ontario Superior Court does not have jurisdiction in this matter.
He is not liable pursuant to the terms and conditions of the agreements.
Wells Fargo’s damages are exaggerated and it has failed to mitigate.
[7] I will deal with each in turn.
1. Did Genge Sign the Agreements?
[8] In his Statement of Defence, Genge denies personally leasing any equipment from Wells Fargo and denies that there was any agreement between Genge and Wells Fargo. In his affidavit evidence he admits signing the agreements. Furthermore, at his cross-examination on his affidavit, he generally testified that he did not recall whether or not he signed the agreements. He confirmed this lack of recollection at the motion. He alternatively argued that he did not understand the terms of the agreements (which is contradictory to his submission that he cannot ever recall signing the agreements).
[9] Wells Fargo relies on the affidavit evidence of Bill Walsh (“Walsh”), who acted as Wells Fargo’s agent in having the agreements executed. Walsh has deposed that in fact Genge did attend and sign all five of the agreements. Walsh attached to his affidavit a copy of Genge’s driver’s license and birth certificate that he obtained during the meeting as proof of this fact.
[10] Genge did not cross-examine Walsh on his affidavit. He claims that efforts were made that were thwarted by Wells Fargo’s counsel. Counsel for Wells Fargo vehemently denies this claim. I also reject this submission since there is absolutely no evidence, documentary or otherwise, to support this contention. It also bears noting that the motion date was the fourth time that this matter was before the court as Genge had obtained previous adjournments concerning alleged lack of service, illness and lack of legal counsel. This issue was never raised before the motion was argued. Furthermore, Genge offers no explanation as to why Walsh need be examined or how it is that Genge’s signature could have shown up on the agreements if it was not in fact he who executed the agreements. He offered no explanation as to how or why payments were made thereafter to Wells Fargo. In any event, the affidavit evidence submitted by Genge to the court simply does not dispute that he in fact signed the agreements. Rather, he seems to dispute his liability pursuant to the agreements that he signed as set out in paragraph ten of his affidavit.
[11] In my view, the evidence before me allows me to obtain a full appreciation of the issue with respect to the signing of the agreements. I do not believe that there is a genuine issue requiring a trial as to whether Genge signed the agreements since he has admitted in his affidavit that he has, and at its highest, he now claims he has no memory. Walsh, on the other hand, has provided a clear affidavit accompanied by copies of Genge’s driver’s license and birth certificate. I therefore find that Genge signed the agreements. Further, there is no genuine issue requiring a trial as to whether the terms of the agreements clearly set out that Genge was one of the lessees. The wording is clear and unambiguous in this regard.
2. Jurisdiction
[12] In my view, the Superior Court of Ontario has jurisdiction to deal with this matter for two reasons.
[13] First, Wells Fargo’s head office is in Toronto, Ontario. The Toronto address is the address listed in the agreements and thus Wells Fargo suffered its damages here. Second, even though the agreements were executed in Newfoundland, Clause 16 of the Lease Terms, in all five agreements, provides that Ontario law shall govern:
- Interpretation: This Lease constitutes the online agreement between Wells Fargo and Customer with respect to its subject matter. Amendments to this Lease must be in writing, reference this Lease and be signed by Customer and Wells Fargo. Customer acknowledges that the Vendor and any brokers and other financial intermediaries involved in amending this Lease are independent contractors and are not agents of Wells Fargo or authorized to enter into agreements, amendments or waivers on Wells Fargo’s behalf. This Lease shall be interpreted according to the laws of, and the parties submit to the non-exclusive jurisdiction of the courts of the Province of Ontario. The parties exclude the application of the UNIDROIT Convention on International Financial Leasing (Ottawa, 1988). The singular shall include the plural and vice versa and words importing one gender shall include all genders. Time is of the essence. Headings are only for convenience and do not affect interpretation. This Lease shall enure to and be binding upon the parties hereto and their respective heirs, executors, administrators, successors, permitted assigns and legal representatives. Any provision of the Lease not permitted by applicable law shall be ineffective and severed herefrom without invalidating the remaining provisions of the Lease. Failure by Wells Fargo to exercise any right will waive such right. Waiver or a Default is not a waiver of any other Default. All waivers must be in writing and signed by an authorized representative. All unperformed obligations of Customer which by their nature, are not released by the termination of the Lease (including those under sections 4, B, 8 and 9) and the rights of Wells Fargo hereunder shall survive the termination of this Lease [Emphasis added].
[14] Based on the foregoing, jurisdiction rests with the Province of Ontario.
[15] Genge could provide no authorities to support his position. He claims that no one brought this clause to his attention; in my view, it was not the obligation of Wells Fargo to do so.
3. Liability
[16] Genge further submits that no one explained the terms of the agreements to him, and as such he should not be found liable for the breach (which again runs contrary to his earlier argument that it has not been proven by Wells Fargo that he executed the agreements). I disagree with this submission. Genge did not adduce any evidence or legal authorities for this proposition. For example, he did not allege that he was incompetent or otherwise unable to understand the terms and conditions of the agreements.
[17] Also, by their terms and conditions, the agreements clearly set out that 10736 and Genge leased the equipment, and that they were jointly and severally liable. It is not disputed that the lease payments ceased being made to Wells Fargo.
[18] With respect to the issue of liability, having found that Genge executed the agreements, and based on the above, I find that there is no genuine issue requiring a trial. Genge is liable pursuant to the terms and conditions of the agreements that he signed.
4. Damages
[19] In my view, the evidence was insufficient to make findings with respect to the amount being sought by Wells Fargo. Wells Fargo did not adduce any evidence dealing with the reasonableness of the amount they received when the equipment was sold to third parties. I am aware of the fact that Clause 9.2(e) of the Lease Terms in the agreements provides as follows:
9.2(e) Wells Fargo, by notice in writing, terminate this Lease.
All rights of Wells Fargo, either under this Lease or at law or equity, are cumulative and not alternative and shall not be extinguished by or merged into any legal proceeding or judgment. Wells Fargo’s costs and expenses due to a Default (“Enforcement Costs”) (including costs due to collection, legal fees, repossession, Equipment repair, rights enforcement, Equipment disposition and other realization costs) shall be paid by Customer, with interest, upon demand. After a Default Wells Fargo may sell, re-lease or otherwise dispose of Equipment at public or private sale with or without notice to Customer and upon deficiency after the disposition procedures are applied to the Liquidated Damages. To the amount permitted by law, CUSTOMER WAIVES THE BENEFIT OF ALL LAWS WHICH WOULD LIMIT WELLS FARGO’S RIGHTS UNDER THIS LEASE, including Customer’s rights under conditional sale, credit and other similar statute such as The Limitation of Civil Rights Act, Saskatchewan, as amended [Emphasis added].
[20] In my view, however, in order to succeed at a summary judgment motion, when the issue of reasonableness is raised by Genge, Wells Fargo must adduce evidence to satisfy the court that it acted reasonably with respect to the resale of the equipment. When I raised this at the motion, counsel for Wells Fargo asked for an opportunity to provide more evidence.
[21] In fairness to both parties, and in the interests of justice, it is my view that both parties should file further materials on this issue to determine if there is a genuine issue concerning damages that requires a trial. I will reconvene the summary judgment motion to deal with the issue of damages. To simply dismiss the motion on these grounds at this time would require that the parties attend at trial which would be unfair and costly to each of them.
disposition
[22] Based on the foregoing, I find that Wells Fargo has succeeded in this motion for summary judgment in establishing that there are no genuine issues requiring a trial concerning the execution of the agreements, jurisdiction and Mr. Genge’s liability. Summary judgment is therefore granted on these issues and Genge is liable to Wells Fargo with respect to the breach of the agreements.
[23] With respect to the issue of damages, I will hear further submissions on this issue. Wells Fargo is to deliver its materials in this regard within 30 days and Genge shall respond within 30 days thereafter. The materials should be sent to my attention at Judges’ Administration, 361 University Ave., Room 170, Toronto, ON, M5G 1T3.
[24] Once the materials are received I will schedule another teleconference to complete the motion.
T. McEwen J
Released: October 21, 2013
COURT FILE NO.: CV-11-437320
DATE: 20131021
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
WELLS FARGO EQUIPMENT FINANCE COMPANY
Plaintiff
– and –
10736 NF INC. and WALTER GORDON GENGE also known as GORDON WALTER GENGE
Defendants
REASONS FOR DECISION
T. McEwen J.
Released: October 21, 2013