CITATION: Terrafix v. Mansteel 2015 ONSC 2236
COURT FILE NO.: 5766/14SR
DATE: 20150408
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
TERRAFIX GEOSYNTHETICS INC.
Ray Thopar, agent for the solicitors for the Plaintiff, the Moving Party
Plaintiff
- and -
MANSTEEL NEW LISKEARD INC.
Salma Sheikh, for the Defendant
Defendant
HEARD: April 2, 2015
RULING ON DEFENDANT’S MOTION TO SET ASIDE AN ORDER
Justice Thomas A. Bielby
INTRODUCTION
[1] The defendant seeks to set aside the interim, ex parte order of Wilcox J., dated March 12, 2015, issued by the court in Haileybury.
[2] The order directed the sheriff to seize the following personal property (the property), located at the defendant’s place of business:
23 rolls of geosynthetic clay liner;
23 bags of Bentonite; and
1 spreader bar.
[3] The plaintiff alleges that items 1 and 2 were sold to the defendant and item 3 was on loan, a tool needed to install the liner.
[4] The sheriff was directed to detain the property for a period of 10 days after which time the sheriff was to give the property to the plaintiff, unless otherwise ordered by the Court.
[5] The property remains in the possession of the sheriff.
[6] The plaintiff alleges that it sold the property to the defendant for $30,006.00 and has never been paid. As a result, the plaintiff submits that title to the property remains with it.
[7] On December 18, 2014, the plaintiff commenced an action and the relief sought was:
Compensation and Restitution for unjust enrichment in the amount of $30,006.00;
Payment of the sum of $30,006.00 by the defendant for goods and services that were supplied and invoiced to the defendant; and
Pre-judgment, special damages and costs.
[8] Section 104 of the Courts of Justice Act R.S.O. 1990, Chap. 43, permits the court on motion, where the recovery of personal property is claimed, to make an interim order for recovery of the property.
[9] Rule 44.01 of the Civil Rules of Procedure is the mechanism for seeking such an order and prescribes what information should be included in the affidavit in support of such a motion.
[10] Rule 44.01(2) states that the motion should be served on the defendant unless the court is satisfied that there is reason to believe that the defendant may improperly attempt to prevent recovery of possession of the property, or that, for any other sufficient reason, the order should be made without notice.
[11] The ex parte motion and the affidavit of David Fuerth, the Vice President of Sales for the plaintiff, sworn March 11, 2015, are set out at Tab I of the motion record. Contained as exhibits to the affidavit are the supporting documentation which describes the product in some detail and sets out the value of the product.
[12] In regards to the motion being brought ex parte, the affidavit states, commencing at paragraph 18:
I recently became aware through business associates that the defendant was seeking to install our product in its business.
I have been advised and do verily believe that the defendant is seeking to have our product installed on March 16, 2015.
I have been advised and do verily believe that the company the defendant is contracting with to install our product is Canor Construction, located at 619 Stanley Street, North Bay, Ontario, P1A 4H9.
I am concerned that unless the defendant is restrained from disposing of or using the product, the plaintiff will have no means to recoup the account.
[13] Presumably, Wilcox J. found this evidence persuasive enough to make the order without prior notice to the defendant.
[14] While it would have been preferable to have brought the motion on notice, there was sufficient evidence before Wilcox J. to make the ex parte order. The issue now to be determined is the order to stand, be varied or revoked.
FACTS AND ARGUMENT
[15] The sale of the property in issue is the subject of an invoice, number 158022, and dated November 11, 2014, issued by the plaintiff indicating the property was sold to the defendant.
[16] The property had a value of $26,553.98 and the HST was $3,452.00 for a total of $30,006.00.
[17] At the bottom of the invoice in larger print, the following is stated:
Title to these goods remains with the sellers until this account is paid in full.
[18] The plaintiff relies on this statement, a statement that is not disputed. Nor is it disputed that the account was never paid.
[19] In argument, counsel for the defendant submitted that the property was, in fact, defective and that a setoff/counterclaim will exceed the value of the property. The defendant argues that the liner provided was too thin for the intended purpose.
[20] The Sheriff attended at the defendant’s place of business at 1107 Lakeshore Road South, New Liskeard, Ontario P0J 1P0, on March 24, 2015 and seized and removed the property. The plaintiff submits that the property removed was the property it sold to the defendant, whereas the defendant submits the plaintiff’s property had already been used on a job in March 2014, and the property seized by the Sheriff belongs to World Development Corporation (WDC).
[21] In this motion, counsel for the defendant was also advocating for WDC and alleging that, unless the property is returned, the defendant and WDC will suffer excessive damages, which will result in further litigation.
[22] The defendant submits that, the fact that the plaintiff’s property has already been used on a job had been conveyed to the plaintiff before the order of Wilcox J. was sought, this fact was not set out in the affidavit in support of the motion for an ex parte order.
[23] In the affidavit of Gurjit Deol, a law clerk for Ms. Sheikh, sworn March 25, 2015 and filed in support of the motion before me, an opinion is provided that, if Wilcox J. had been advised that the property had been used already, it was unlikely the order would have been made or, at the very least, the plaintiff would have been required to post security.
[24] It is not the place of a law clerk to provide such an opinion. It is not the proper subject matter of affidavit. Further, the affidavit of Leanna Farr, a lawyer with the firm representing the plaintiff and sworn March 31, 2015, deposes that this information was conveyed to Wilcox J. during argument by plaintiff’s counsel, Mr. Vibert.
[25] Attached to Exhibit C of the motion record is an invoice from Enigma Land Ltd to WDC, dated August 8, 2014, which sets out the following description of the subject matter of the invoice:
32 rolls of Bentofix NWL 4.72 x 45 72m
28 50LBS Bags of Bentonite + 2 Spreading bars
[26] The price of these goods with HST totals $43,709.30.
[27] The invoice also states that the property remains that of the seller until payment is made.
[28] It is submitted by the defendant that this invoice and that of the plaintiff are almost identical.
[29] At Tab E to the affidavit of David Fuerth, sworn March 31, 2015, on behalf of the plaintiff, in the responding motion record is the plaintiff’s “Record of Communications to Collect Outstanding Account with Mansteel New Liskeard Inc. It sets outs the history of the messages and emails between the parties, commencing February 20, 2014, regarding payment of the account. This evidence reveals that the plaintiff was told a couple of times that payment would be made.
[30] An email from a representative of the defendant to the plaintiff, dated March 18, 2014, apologizes for the delay and writes that the matter would be passed on to the accounts payable manager and would be dealt with forthwith.
[31] On May 27, 2104, the plaintiff was told by a representative of the defendant that the contractor had been paid upfront and payment could be expected in two weeks.
[32] However, the first reference to an alleged defect in the property is in an email sent by the defendant in March 2015. The defendant, in the same email, advises that the property had already been used.
[33] Counsel for the defendant takes issue with the fact that, in the affidavit before Wilcox J., the identity of a business associate who told the plaintiff that the product was to be used by the defendant on March 16, 2015 was not identified. His identity is set out in the Fuerth affidavit, sworn March 31, 2015.
[34] It regards to the issue of whether the property seized was that of the plaintiff or WDC, starting at paragraph 21 of the Fuerth affidavit, sworn March 31, 2015, the methods by which the plaintiff’s property could be identified are set out.
[35] It is also stated that there are only four companies in North America that can supply such a product and that the plaintiff is the only Canadian company. One of the American companies only began manufacturing in late 2014 and another did not ship to Canada.
[36] Mr. Fuerth deposes that each of the 23 rolls has a roll number that can be matched against the plaintiff’s quality control certificates. At Tab I of his affidavit are photographs of most of the roll numbers of the property seized.
[37] The plaintiff’s invoice references 23 rolls of liner and 23 bags of Bentonite and one spreader bar and 23 rolls, 23 bags, and one spreader bar were seized by the Sheriff.
[38] A supplementary motion record was filed by the defendant. The affidavit is that of Grant Erlick, the sole officer and director of the defendant and was sworn on March 30, 2015.
[39] Mr. Erlick deposes that the defendant is building a new recycling plant and that the material seized is needed as liner for the leachate containment ponds.
[40] With respect to the property in issue, Mr. Erlick deposes that the product supplied by the plaintiff had already been installed in May 2014, and was under eight feet of water. Further, he alleges that the property was defective in that it was thinner than required and additional costs were incurred because of the negligence of the plaintiff.
[41] The defendant submits that there is an urgency to have the seized property returned. It is alleged that, if the pond liner is not installed at its recycling plant, significant environmental damage will result, which could result in significant fines levied by the Ministry of the Environment. A new liner cannot be re-ordered in time.
[42] Also included in the supplementary motion record is the affidavit of Troy Wilson, the sole director and officer of Mammoth Consulting, which was contracted to oversee the installation of the pond system.
[43] He deposes that the pond system was to be completed by May 30, 2014, and, because of extreme winter weather, the job could not be completed. The MOE provided an extension until the spring of 2015.
[44] Also included in the supplementary record is the affidavit of Mary Shaer Valei, the administrator of WDC, who deposes she has contracted with the defendant to complete the recycling plant.
[45] Ms. Valei also deposes to the strict timetable for the liner installation because of the environmental issues.
ANALYSIS
[46] Counsel for the defendant provided the Court with the decision of Deputy Judge Miller in E-Zee Rent-to-Own v. Hopkins [2009] O.J. No. 1139 where at paragraph 11 the deputy judge states the following:
In order to succeed in a motion for an interim order for the return of personal property, the courts have held that a plaintiff must demonstrate that it could meet the “substantial grounds” test. In order to meet the test, the plaintiff must satisfy the court that there is a high degree of assurance that the plaintiff will be successful at trial.
[47] Also provided by the defendant is the decision of Howden J. in Sherman v. P.D. Merrell Bailiff Inc. [2001] O.J. NO. 3414 in which, at paragraph 7, the learned judge discusses the appropriate test. The test for interim injunctions is set out in the paragraph and the following is stated:
My reading of the law on the issue of recovery of chattels is that claimants for interim recovery under Rule 44 must meet a higher standard than that required for interim injunctions. The claimant for interim recovery of a chattel must show substantial grounds to support the relief asked.
[48] Howden J. references the decision of Clark Door of Canada Ltd. v. Inline Fiberglass Ltd (1996) 45 C.P.C. (3d) 224 for confirmation of the test applied by Deputy Judge Miller in E-Zee Rent case above.
[49] In my opinion on the material before me, I believe the plaintiff has met the test for the following reasons.
[50] The property was supplied by the plaintiff to the defendant in November 2013.
[51] At all material time, title to the property remained with the plaintiff.
[52] In March 2014, employees of the defendant acknowledged the debt and stated payment would be made.
[53] The issues of defects and deficiencies in the plaintiff’s product was not raised until last month, after the action had been commenced and at a time when the plaintiff was asserting a possessory claim to the property.
[54] The plaintiff has deposed to identifiers on the property seized indicating that it was the product it supplied. Copies of photographs of these identifiers located on the seized property have been provided. No such identifiers have been provided by the defendant, nor are any referenced by the alleged owner of the product, WDC.
[55] The evidence before me establishes that the plaintiff has substantial grounds supporting the relief sought and provides a high degree of assurance of the plaintiff’s success.
[56] With competing affidavits, it is difficult to make findings of credibility. However, I have a great deal of difficulty with the facts as relied upon by the defendant. It alleges the plaintiff provided a defective product but, as noted, never raised the issue of defects until over one and one-half years after it was supplied and a year after it was allegedly installed.
[57] The installation of the property which is now, by the defendant’s own evidence, under eight feet of water would make it difficult to identify the product or any defects.
[58] It seems too contrived to now state payment was not made because of defects in a product installed and under water.
[59] The urgency argument of the defendant relating to the environmental risk is not persuasive. The retaining pond was to be completed last spring. It is alleged the harsh winter prevented completion, however, the winter we have just finished was just as harsh. Further, my order will provide a method by which the defendant may recover the property.
[60] Rule 44.03(1)(b) of the Civil Rules of Procedure allows me to order the defendant to pay into court, as security, any amount I so direct, in exchange for the property in issue.
[61] Accordingly, on the merits of the motion, and on the evidence before me, I order:
The motion of the defendant to vacate the order of Wilcox J., dated March 12, 2015, is dismissed.
The order of Wilcox J. is amended to include the following:
a. The Sheriff is to maintain possession of the property in issue for a further 60 days.
b. During the 60 day period the defendant can pay into court, as security for the property, the sum of $30,006.00 and pay to the Sheriff the storage cost incurred to the date of payment, in exchange for which the property is to be released to the defendant.
c. If the said monies are not paid within the 60 days, the Sheriff shall release the property to the plaintiff upon payment of any fees incurred by the Sheriff.
COSTS
[62] The parties provided to me their bill of costs. The plaintiff is entitled to its cost as it has been successful. The plaintiff’s bill is less than the cost of the defendant. The plaintiff seeks on a partial indemnity basis a figure of $7,141.37 and I order the defendant to pay costs forthwith to the plaintiff, in the amount of $7.141.37, all inclusive.
Justice Thomas A. Bielby
Released: April 8, 2015
CITATION: Terrafix v. Mansteel 2015 ONSC 2236
COURT FILE NO.: 5766/14SR
DATE: 20150408
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
Terrafix Geosynthetics Inc.
Plaintiff
- and -
Mansteel New Liskeard Inc.
Defendant
RULING ON DEFENDANT’S MOTION TO SET ASIDE AN ORDER
Bielby, J.
Released: April 8, 2015