Court File and Parties

COURT FILE NO.: CV-16-191 DATE: 2016-07-19 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ALLAN JACOBS, Applicant AND: KRISTINE HILL, also known as KRISTINE GREEN, Respondent

BEFORE: The Honourable Mr. Justice D. A. Broad

COUNSEL: A. McNish, A. Watkins and K. Hensel, for the Applicant R. Aaron Detlor, for the Respondent

HEARD: June 30 and July 14, 2016

Endorsement

Nature of Application and Motion and Procedural History

[1] By Notice of Application issued June 13, 2016, the applicant claimed against the respondent, named in the Notice of Application as Kristine Green, an interim, interlocutory and permanent order for the return of personal property consisting of 30 kiln buildings and 600 bins used in the processing and manufacturing of tobacco (defined in the Notice of Application as the “personal property”), and a declaration that the applicant is the owner of the personal property and lawfully entitled to its possession.

[2] The applicant brought a motion initially returnable June 17, 2016 for interim recovery of the personal property pursuant to section 104 of the Courts of Justice Act, R.S.O. 1990, c. C.43 and Rule 44 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The applicant brought a separate motion, without notice, for an order validating service of his motion record for the motion for interim recovery of personal property.

[3] On June 17, 2016 both motions were adjourned by Justice Nightingale to June 30, 2016, on terms that the respondent deliver her responding materials by June 24, 2016 and the applicant deliver his reply materials, if any, by June 28, 2016.

[4] On June 30, 2016 the respondent advised that she took no issue with respect to service of the motion materials and I made an order validating service of the applicant’s motion materials.

[5] The respondent’s responding affidavit was made in the name Kristine Hill, and not Kristine Green as set out in the title of proceedings. On oral motion of the applicant I ordered pursuant to Rule 5.04(2) of the Rules of Civil Procedure that the title of proceedings to be amended, nunc pro tunc to the date of issuance of the notice of application, to name the respondent as “Kristine Hill, also known as Kristine Green”.

[6] Argument commenced on the motion for interim possession of personal property on June 30, 2016 and was completed on July 14, 2016. On June 30 the applicant had completed his submissions in chief, subject to an indulgence which I granted to him to file additional written materials on the issue of whether the property in question comprise chattels or fixtures. The respondent had commenced her submissions.

Motion by Applicant to Introduce Additional Evidence

[7] On the eve of resumption of the argument on July 14, 2016, being after completion of the applicant’s submissions in chief and commencement of the respondent’s submissions, the applicant brought a Motion for leave to amend, nunc pro tunc, the Notice of Application and Notices of Motion to identify 1181312 Ontario Inc., operating as KATS Transport as an applicant in the proceeding. The applicant also sought leave to file an affidavit sworn July 14, 2016 in support of the motion to amend in which the applicant deposed, inter alia, that 1181312 Ontario Inc. operating as KATS Transport, “is the legal owner of the 30 kilns and 600 bins at issue.”

[8] I dismissed the motion, giving brief oral reasons, with written reasons to follow. The following are those reasons.

[9] In the case of Chitel v. Rothbart [1984] O.J. No. 2238 (Master) Master Sandler held, at para. 34 as follows:

I think it wrong, except in the most unusual circumstances, to allow a counsel to repair damage to his case by allowing further evidence to be introduced as the motion is being argues because holes are being punched into the structure by opposing counsel’s argument.

[10] Chitel v. Rothbart was applied in the case of NRS London Realty Ltd. V Glenn et al (1989) O.R. (2d) 704 (Dist. Ct.) where a defendant, on a summary judgment motion, sought to deliver further affidavit material following the plaintiff’s submissions. Carter, J. denied leave to file the additional affidavit, observing at page 4 “it would now hardly seem fair to permit counsel for [the defendant] to attempt to repair the damages by submitting an affidavit…after plaintiff’s counsel had made his submissions.”

[11] In Suwary v. Women’s College Hospital, 2008 ONSC 8789 Strathy, J. (as he then was) held:

It is well settled that a party may not “repair damage” to its case by introducing new evidence on a motion in order to patch holes in the case created by the other party’s evidence or counsel’s submissions.

[12] In the case of Choo v. Wong, 2005 ONSC 50265 it was found that the granting of leave by a motions judge to a party to introduce further evidence to repair damage constituted grounds to grant leave to appeal to the Divisional Court.

[13] What is being proposed by the applicant is not limited to amendment of a pleading governed by rule 26.01 of the Rules of Civil Procedure, but rather the introduction of new evidence in order to seek to repair damage to his case by submissions of the respondent. I do not accede to the submission of the applicant that the introduction of this evidence was necessitated by the respondent’s last minute delivery of its factum in which the issue of the involvement of the numbered company was first identified. The speed with which the motion was scheduled to be argued was on the applicant’s insistence, not that of the respondent. Moreover, it was well within the applicant’s power to determine how it wished to frame its case in order to satisfy the onus on him and, in particular, whether to characterize himself or the numbered company as the owner of the kilns and bins in issue. The applicant should be taken to be aware of whether he or the numbered company had acquired and owned the property.

[14] As indicated in the case-law cited above, it would be manifestly unfair to permit the applicant to repair the damage to his case in the middle of the respondent’s submissions by the introduction of new evidence. The dismissal of the motion at this stage is without prejudice to the right of the applicant to bring a further motion to amend the Notice of Application.

Review of Evidence

[15] In his affidavit sworn June 9, 2016 the applicant deposed, inter alia, to the following:

(a) he purchased the kilns and bins between 2009 and 2015 and he makes his living either using the kilns in his own tobacco production operation or reconditioning and selling them; (b) the replacement value of the kilns and bins is $750,000; (c) the respondent is the former spouse of Albert “Ed” Greene who lived together at 1044 Highway 54, Oshweken, Ontario on the Six Nations Reserve (the “property”), and separated in November, 2015; (d) in 2009 Mr. Green purchased 10 kiln buildings which were moved by the applicant on to the property. In 2010 the applicant purchased 150 bins for use in the initial 10 buildings under a verbal agreement that Mr. Green could use them; (e) in 2011 and 2012 the applicant purchased a further 15 kiln buildings and 225 bins. He appended what he stated were copies of some of the cheques and invoices reflecting these purchases. (f) in 2015 the applicant purchased a further 15 kiln buildings and 225 bins. He does not have any cheques or invoices in his possession reflecting the purchase of these items; (g) at no time did Mr. Green purchase the 30 kiln buildings and 600 bins. The applicant paid any and all monies for their purchase and they remained his property but were in Mr. Green’s possession at the property where Mr. Green cultivated tobacco; (h) on the separation of Mr. Green and the respondent Mr. Green left the property and has not cultivated tobacco on the property since then; (i) on April 4, 2016 Mr. Green contacted the Six Nations police when the respondent interfered with his and the applicant’s efforts to retrieve the kilns; (j) the respondent has not purchased the kilns from the applicant. The applicant attended at the property on April 28, May 2, May 3, May 9, May 11 and May 28, 2016 to attempt to persuade the respondent to release the kilns and bins to him. In their conversation the respondent acknowledged that 30 of the kiln buildings and 600 of the bins on the property were the applicant’s property but she had been advised by her lawyers not to permit the applicant to retrieve them; (k) the applicant says that he suffers increasing and irreparable harm so long as the kilns and bins remain in the respondent’s possession without any compensation to him. The applicant has secured buyers for the bins and kiln buildings and he stands to make $550,000 from their sale. The buyers require the equipment to be in their possession in time for it to be set up for the August 2016 tobacco harvest. If he cannot recover the kilns and bins by then he will not be able to sell them.

[16] In her responding affidavit affirmed June 24, 2016 that the respondent deposed, inter alia, to the following:

a) her relationship with Ed Green began in or about 2002 and they married in 2013. The marriage broke down in or about November, 2015; b) at all material times the respondent has held the Certificate of Possession for the property solely in her name. She acquired the property 17 years ago prior to entering into a relationship with Mr. Green; c) she is currently attempting to facilitate a separation agreement with Mr. Green which properly considers the disposition of the matrimonial assets; d) if a separation agreement is not possible the division of matrimonial assets will be dealt with by way of divorce proceedings which must consider the Six Nations of Grand River, Law Concerning Matrimonial Real Property; e) the operations involving the curing of tobacco were carried out exclusively by the respondent and Mr. Green on the property. At the time that they separated they had approximately 300 acres of land under tobacco cultivation. The respondent currently has tobacco under contract for the current growing season and she plans on using the kilns. Any money that his made from the kilns will be properly accounted for and placed in an escrow account pending the resolution of the issues relating to the division of matrimonial real property; f) the kilns in question have been used continuously from the dates of their respective acquisition for the curing of tobacco that the respondent and Mr. Green had grown or acquired; g) the respondent has plans to use the kilns this year as part of her ongoing farming operations; h) all of the property in question is permanently affixed to the property. The kilns are situated on concrete pads which were poured for the sole and exclusive purpose of holding the kilns. The pouring of the concrete pads cost in the range of $5000 per pad for 40 pads equaling $200,000 in total; i) the kilns themselves are bolted and affixed to the concrete pads and have also been secured and hooked up to gas lines. Running gas lines and hooking the kilns up costs approximately $120,000 in total; j) all of the kilns were hooked into the electrical system on the respondent’s property which require new poles and a new line to be installed; k) providing electricity to the kilns cost something in the range of $120,000 in total; the first four pads were poured in or about 2009 14 kilns were purchased from an off-reserve auction house called Shackletown Auctions. These four kilns were not purchased from the applicant; l) in 2010 a further eight kilns with bins were purchased from Trevor Bomberry; m) in March 2012 four more kilns were purchased from Sunrise Equipment Auctions; n) on or about 2013 the respondent Mr. Green purchased nine further kilns from sources that Mr. Green has failed to disclose; o) the respondent believes that the nine kilns acquired in 2013 required reconditioning which was undertaken by the applicant. The respondent was advised by Mr. Green that the applicant was paid for this work; p) the last 15 kilns were purchased in 2014. The respondent was advised by Mr. Green at the last 15 kilns were purchased outright with payment being made at the end of the 2014 harvest; q) during discussions with Mr. Green dealing with the disposition of matrimonial assets the respondent discussed the issue of kilns on a number of occasions between November 2015 and January 2016. She stated that Mr. Green’s story with respect to the kilns changed from conversation to conversation, at one time asserting that the kilns were all bought and paid for and later asserting that the applicant owned everything-kilns and bins; r) the respondent had various conversations with the applicant during which she asked for the list of invoices and money owing for kilns and bins he was claiming; s) the respondent was deeply concerned about the how the story on ownership of the kilns kept changing and she believed that the applicant had made a deal to recover the kilns on behalf of Mr. Green who had made repeated attempts to unlawfully seize them from the property; t) the respondent believes that there are serious discrepancies in what the applicant has advised her in the documentation shown to her and what the applicant has advised the Court by way of his affidavit evidence; u) the respondent has attended at Mr. Green’s new property on the Six Nations reserve and believes that he has made preparations to receive the kilns in question which included the pouring of concrete pads as well as the running of Hydro and gas lines; v) the respondent has been advised by Glenn Styres, the individual whom counsel for the applicant has advised will be the purchaser of the kilns and bins, that there will be a swap wherein kilns are notionally transferred to him but are actually delivered to Mr. Green.

[17] Appended as an exhibit to the respondent’s affidavit is an affidavit of Trevor Bomberry, affirmed June 22, 2016 in which he deposed, inter alia, as follows:

(a) he believes that the affidavit of the applicant is false in claiming that he placed 40 kilns and bins at the respondent’s property, since Mr. Bomberry sold eight kilns with bins to Ed Green and the respondent for $25,000 and was to receive the purchase money at the end of the harvest; (b) he recently attended the respondent’s property and viewed 40 kilns present on the property including the eight kilns that he sold. He was able to identify the kilns that he sold because there are marked with numbers that he put on them prior to the sale; (c) he has only received $10,000 in payment and there is an amount outstanding of $15,000 and he is currently discussing finalizing payment with the respondent.

[18] In his reply affidavit sworn June 27, 2016 the applicant deposed, inter alia, as follows:

(a) the applicant is the owner of the kilns and bins which he tried to get Mr. Green to purchase but he was unable to do so; (b) the invoices which the respondent attached to her affidavit were initially drafted by the applicant for Mr. Green for sales that did not actually go through because Mr. Green could not afford them; (c) the respondent does not claim any ownership interest in the kilns but simply suggests that they are the property of her husband and she wants to be able to use them; (d) the respondent’s claim that tobacco farming is to be her primary source of income is false and is contradicted by a statement made by her as recorded in the transcript of the conversation that she taped without his knowledge; (e) the respondent has other businesses including a gas station and a riding academy.

Notice of Constitutional Question

[19] The respondent served a Notice of Constitutional Question on each of the Attorney General of Ontario, Constitutional Law Branch, and the Attorney General of Canada, giving notice of her intention to question the constitutional validity and applicability of sections 104 and 129 of the Courts of Justice Act as they may be applied as against Indians and Lands Reserved for Indians and/or as against Indian property situated on an Indian reserve.

[20] By letter dated June 24, 2016 the Attorney General of Ontario, Constitutional Law Branch, advised that it did not intend to intervene in the matter. By letter dated June 30, 2016 the Attorney General of Canada advised that it similarly did not intend to intervene in the matter.

Section 104 of the Courts of Justice Act and Rule 44

[21] Subsection 104(1) of the Courts of Justice Act provides as follows:

In an action in which the recovery of possession of personal property is claimed and it is alleged that the property, (a) was unlawfully taken from the possession of the plaintiff; or (b) is unlawfully detained by the defendant, the court, on motion, may make an interim order for recovery of possession of the property.

[22] Sub rule 44.01(1) of the Rules of Civil Procedure provides that an interim order under section 104 of the Courts of Justice Act may be obtained on motion by the plaintiff supported by an affidavit setting out:

(a) a description of the property sufficient to make it readily identifiable; (b) the value of the property; (c) that the plaintiff is the owner or lawfully entitled to possession of the property; (d) that the property was unlawfully taken from the possession of the plaintiff or is unlawfully detained by the defendant; and (e) the facts and circumstances giving rise to the unlawful taking or detention.

[23] Sub rule 44.03(1) of the Rules of Civil Procedure provides that, where a motion for interim recovery of personal property is made on notice to the defendant, the court may (a) order the plaintiff to pay into court as security twice the value of the property, or such other amount as the court directs, or to give the appropriate sheriff security in such form and amount as the court approves, and direct the Sheriff to take the property from the defendant and give it to the plaintiff; (b) order the defendant to pay into court as security twice the value of the property, or such other amount as the court directs, or to give the plaintiff security in such form and amount as the court approves, and direct that the property remain in the possession of the defendant; or (c) make such other order as is just.

[24] Sub rule 44.04(1) of the Rules of Civil Procedure provides that where an interim order requires either party to give security, the condition of the security shall be that the party providing the security will return the property to the opposite party without delay when ordered to do so, and pay any damages and costs the opposite party has sustained by reason of the interim order.

Position of the Applicant

[25] The applicant argues that the bins are clearly chattels and the evidence is supportive of the kilns being also found to be chattels and not fixtures. He argues that, in a text message appended as an exhibit to the respondent’s affidavit, she acknowledged that the kilns were movable and that the photographs appended to her affidavit did not show the kilns themselves being bolted onto the concrete pads but rather only metal brackets are bolted onto the concrete pads. He argues further that, by their very nature, the kilns are movable pieces of equipment and were not placed on the respondent’s land for a permanent use.

[26] The applicant argues that, since the kilns are only attached to the land by their own weight, the onus is on the respondent to establish that there is an objective intention that they are intended to be part of the land. Insofar as the kilns are annexed to the land, the annexation is slight and the equipment can be removed without damaging the real property, factors which are indicative of the property being treated as chattels. To the extent that the concrete pads, hydro-and gas lines are physically connected to the kilns, this was for the purpose of allowing the kilns to function when in use, not to attach them as part of the realty.

[27] The applicant argues that there is no evidence that anyone other than himself paid for the 30 kilns and 600 bins that he says belong to him. It was the intention of Mr. Green to purchase the kilns and bins but he never came up with the purchase price.

[28] The applicant states that, insofar as the kilns and bins are chattels, there has never been an assertion by the respondent that they belong to her. The only basis by which the respondent may have an interest in the kilns would be if they are found to be fixtures, forming part of the realty in respect of which she holds a Certificate of Possession.

[29] He also argues that if the kilns are found to be chattels the Six Nations of Grand River, Law Concerning Matrimonial Real Property would have no application to them as it only affects interests in real property, not movable property.

[30] The applicant states that he has an agreement with a third party to sell the kilns and bins for the sum of $550,000, provided delivery can be effected in time to set up the kilns for the tobacco harvest in the month of August. On this basis he says that the balance of convenience favours his claim for interim possession. The applicant argues that the respondent’s assertion that she intends to use the kilns and bins in her own tobacco operation is inconsistent with other evidence in which she stated she had no such intention. The applicant argues that there would be no inconvenience to the respondent by the granting of his motion which cannot be compensated by an award of damages.

[31] The applicant proposed in submissions that the appropriate amount of security that he should be required to post is the sum of $550,000 representing the “resale value” of the personal property, being the amount for which he proposes to sell the personal property. In reply submission, the applicant revised this advice that he would not oppose a requirement that he post as security two times the said value, being the sum $1,100,000.

Position of the Respondent

[32] As a preliminary matter the respondent submits that the proceeding was improperly constituted for an order for interim recovery of personal property to be granted. S.104 of the Courts of Justice Act provides that such an order may only be made in an action in which recovery of possession of personal property is claimed, and not in a proceeding commenced by Notice of Application.

[33] On the merits, the respondent argues firstly that the applicant has not satisfied each of the elements listed at paragraphs (a) to (e) of sub rule 44.01(1) of the Rules of Civil Procedure required to be shown before an order for interim possession of personal property may be granted. In particular, he argues that para. (a), which requires a description of the property sufficient to make it readily identifiable, has not been satisfied. He also says that the applicant has not provided reliable evidence of the value of the property as required by para. (b).

[34] The respondent argues that the applicant has not shown himself to be the owner or a person lawfully entitled to the property. Many of the invoices which purport to support acquisition of certain kilns and bins are issued to entity named Kats Transport and certain cheques purporting to show payment for certain items of property are from 1181312 Ontario Inc. (the “numbered company”). No evidence was led by the applicant with respect to the relationships, if any, between the applicant and the numbered company and Kats Transport.

[35] The respondent argues that the evidence falls short of establishing that the personal property was unlawfully taken from the applicant or unlawfully detained by the respondent, as required by paragraphs (d) and (e). The applicant deposed simply that the kilns and bins were in Mr. Green’s possession at the property possessed by the respondent, from which location Mr. Green cultivated tobacco.

[36] Secondly, the respondent argues that the kilns are fixtures and form part of the realty possessed by her by virtue of her Certificate of Possession.

[37] The final argument advanced by the respondent is that s. 104 of the Courts of Justice Act is in direct conflict with sections 87-89 of the Indian Act, R.S.C. 1985, c. I-5 and in particular with subsection 89(1) which provides as follows:

s. 89(1) Subject to this Act, the real and personal property of an Indian or a band situated on a reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or a band.

[38] The respondent argues that any order made pursuant to section 104 of the Courts of Justice Act would contravene section 89 of the Indian Act because such an order would not be determinative on the issue of actual ownership or lawful possession. Moreover, the respondent submits that the applicant’s motion fails to uphold the integrity of the Indian Act and her rights, as an Indian, as there is currently contradictory evidence as to ownership of the property which has not been tested.

Analysis

[39] I would not give effect to the respondent’s submission that the motion should be dismissed due to the proceeding being constituted as an application rather than an action.

[40] It is noted that in section 1 of the Courts of Justice Act “action” is defined as a proceeding commenced by, inter alia, a Notice of Action. There is therefore no requirement that there be an actual exchange of pleadings prior to a motion being brought under rule 44 of the Rules of Civil Procedure. Rule 2.03 of the Rules of Civil Procedure provides that the court may in the interest of justice dispense with compliance with any rule at any time. In my view, relief should be granted to the applicant to proceed with his motion even though the proceeding is an application rather than an action, as required, in order that the issues on the motion may be determined on their merits.

[41] It has been made clear in the case-law that an order for interim possession of personal property is a discretionary and extraordinary remedy only to be made in exceptional cases. The plaintiff is required to demonstrate “substantial grounds” in order to obtain an order for interim recovery of personal property. (See the case of Higher Ground LLC v. Langstaff, 2010 ONSC 4108 (S.C.J.) at paras. 11-12).

[42] In the oft-cited case of Clark Door of Canada Ltd. V. Inline Fiberglass Ltd., [1996] O.J. No. 238 (Ont. Ct. Gen. Div.) Molloy, J. stated, at para. 23, that “the ‘substantial grounds’ test for interim recovery of property requires a high degree of assurance that the plaintiff will be successful at trial.” She went on to state at para. 24 that “cases in which there is clear documentation supporting the plaintiff are more likely to meet the substantial grounds test. Cases in which straight issues of credibility will determine the action are less likely to meet the test.”

[43] At para. 17 of Clark Door Molloy, J. confirmed that the plaintiff must satisfy all of the elements listed in Rule 44.01(1) of the Rules of Civil Procedure, as they are expressed cumulatively. Moreover, she observed that it is not enough for the plaintiff to assert that he is the owner and that the right to possession simply flows from that. Rather, there is a positive onus on the plaintiff to establish substantial grounds for its claim that its property is being unlawfully detained by the defendant.

[44] In the present case there is a lack of clear documentation supporting the plaintiff on both major aspects of the onus he must discharge – firstly that he is the owner of the kilns and secondly that the property is being unlawfully detained by the respondent.

[45] With respect to ownership, the applicant deposes that 10 kilns on the respondent’s property were purchased by Mr. Green and placed by the applicant on the property. No claim for possession is made for these 10 kilns, however, no evidence is offered on their description as distinguished from the kilns the applicant is claiming. He says he purchased 150 bins for use in the initial 10 kilns and appends copies of “some” of the cheques and invoices reflecting this purchase. One document is a receipt with the name “Kats Transport” at the top and one is a cheque on the account of the numbered company.

[46] The applicant deposes that in 2011 and 2012 he purchased a further 15 kiln buildings and 225 bins and appends copies of “some” of the cheques and invoices reflecting those purchases. The documents consist of receipts in the name of Kats Transport, cheques from the numbered company, an undated document entitled “Description of Goods purchased from Mike Parezanovic” identifying the buyer as “Kats Transport” with an accompanying cheque payable to Mike Parezanovic from the numbered company.

[47] Finally the applicant deposes that in 2015 he purchased a further 15 kilns and 225 bins, but he does not have any cheques or invoices in his possession reflecting that purchase.

[48] On the issue of whether the property is being wrongfully detained by the respondent, no evidence was offered by the applicant on the specific terms under which the kilns and bins were placed on the respondent’s property.

[49] With respect to initial 150 bins which the applicant says he purchased in 2010 the applicant simply says that there was a “verbal agreement between Mr. Green and I that he could use them.”

[50] With respect to the 30 kilns and 450 bins alleged to have been purchased in 2011, 2012 and 2015, all that the applicant deposes is that they are “in Mr. Green’s possession at 1044 Highway 54, from which location Mr. Green cultivated tobacco.”

[51] The respondent deposed in her affidavit that she carried on a farming business together with Mr. Green, which included the growing, harvesting and curing of tobacco, and that the operations involving the curing of tobacco were carried out exclusively on her property.

[52] Based upon the respondent’s evidence, it is arguable that whatever arrangement Mr. Green made with the applicant for the placement and use of the kilns and bins on the respondent’s property was made, not for his sole benefit, as suggested by the applicant’s affidavit, but on behalf of himself and the respondent for their joint benefit in connection with their joint tobacco enterprise.

[53] No evidence is offered by the applicant on the terms of the arrangement between himself and Mr. Green for placement of the kilns and bins on the respondent’s property and in particular, whether he could call for their return, and if so, on what terms respecting timing and notice.

[54] The applicant argues that the respondent has not shown any ownership interest in the kilns and bins and that therefore his motion for interim possession should be granted notwithstanding the deficiencies in the documentary evidence supporting his ownership. I would not accede to this submission. It is clear that the focus of sub rule 44.01(1) of the Rules of Civil Procedure is not on the nature of the respondent’s interest in the property, but rather on whether the applicant is the owner or is lawfully entitled to possession of the property and on whether it is being unlawfully detained by the respondent.

[55] In the present case it is not clear on the evidence what interest the applicant has in the kilns and bins. The documentary evidence points to the possibility of two business entities Kats Transport and the numbered company having interests in the property. It is possible that Kats Transport is a business name of the numbered company. No information is provided in the applicant’s affidavit material respecting the relationship, if any, between the applicant and Kats Transport and the numbered company nor with respect to the relationship between the business name “Kats Transport” and the numbered company.

[56] The applicant’s affidavit evidence does not specifically address whether Kats Transport and/or the numbered company have granted to the applicant the right to possess the kilns and bins which may be owned by them. To find that the applicant has a lawful right to possess the kilns and bins which Kats Transport and/or the numbered company may own would require the court to draw an inference that they have expressly or impliedly conferred that right on him. The evidentiary basis for such an inference to be drawn is not present.

[57] Para. 44.01(1)(a) of the Rules of Civil Procedure requires the applicant to show a description of the property sufficient to make it readily identifiable. The applicant deposes that he placed 40 kilns on the respondent’s property, 10 of which were purchased by Mr. Green and paid for by him, and 30 of which the applicant says he continues to own. The applicant’s affidavit evidence discloses no way to readily identify the 30 kilns in which the applicant claims entitlement, as distinguished from the 10 kilns in which he does not.

[58] With respect to para. (b) of sub rule 44.01(1) of the Rules of Civil Procedure, the applicant states that the replacement value of the kilns and bins is $750,000 and the sale value is $550,000. No evidentiary support is offered for these bald figures. The applicant states that he has sold the kilns and bins for $550,000. He does not disclose the purchase and sale agreement, the identity of the purchaser, nor the circumstances in which the sale agreement was entered into.

[59] Even apart from the questions of description, value, ownership and entitlement of possession, in my view the applicant has failed to show, to the standard required by the substantial grounds test, that the kilns and bins have been unlawfully detained by the respondent, for the reasons set forth above.

[60] In my view the applicant has failed to establish a high degree of assurance that the he will be successful at trial. It is noted that this finding does not rest on the failure of the applicant to include the numbered company as an applicant, but rests most significantly on the failure to show, to the required standard of proof, that the property has been unlawfully detained by the respondent.

[61] There is another significant impediment to the granting of the applicant’s motion. The applicant has stated that, if he is successful on his motion for interim possession of the kilns and bins, he intends to sell them at the earliest possible date. Indeed he states that he has already secured a purchaser or purchasers for the property.

[62] As indicated above, sub rule 44.04(1) of the Rules of Civil Procedure provides that, where an interim order for recovery of personal property requires either party to give security, the condition of the security shall be that the party providing the security will return the property to the opposite party without delay when ordered to do so, and to pay any damages and costs the opposite party has sustained by reason of the interim order.

[63] The requirement that the posting of security be on terms that the party obtaining the property and posting security will return the property to the opposite party when ordered to do so is mandatory. This clearly contemplates that the party who is awarded interim possession and ordered to post security retaining the property until final disposition of the action, not disposing of it.

[64] Justice Allen addressed the prospect of the moving party disposing of the property prior to trial in another way in the Higher Ground LLC v. Langstaff case at paras. 36 and 37. In that case the plaintiffs proposed to recover the property on motion and move it out of the jurisdiction. The defendants argued that, if the court were to allow recovery of the property by the plaintiffs, it would have the actual effect of a permanent injunction – that is, a recovery order would result in a complete loss of the defendants’ rights before trial.

[65] Justice Allen accepted the defendants’ submission and held at para. 37 that “the court cannot, on the case advanced by the plaintiffs, make an order that would have the practical effect of nullifying the defendants’ rights and of rendering the need for a trial moot.”

[66] Even if the applicant could satisfy the “substantial grounds” test, in my view, this is not a case where the court would be justified in exercising its discretion to dispense with the requirement for the applicant to post security as a condition of the granting of the order in order to avoid the application of subrule 44.04(1) of the Rules of Civil Procedure. Although sub rule 44.03(1)(c) of the Rules of Civil Procedure authorizes the court to “make such other order as is just”, the starting point in para.(a) of sub rule 44.03(1) is that the plaintiff be required to pay into court twice the value of the property. The applicant has not provided any authorities setting forth the principles applicable to the exercise of discretion to dispense with security. In my view the requirement to post security should only be dispensed with only in extraordinary circumstances, which are not present here.

[67] Although the respondent may not own the kilns and bins, she may nevertheless have a right to possess them for some period of time. Whether she does have such a right and if so, how long her right of possession would continue, are issues for trial. As indicated above, little or no information was provided by the applicant on the terms under which the kilns and bins were placed on the respondent’s property under his agreement with Mr. Green.

[68] The respondent deposed that removal of the kilns would be “catastrophic” to her and her family as it would essentially remove her most important and substantial means of income. In these circumstances, even if the applicant were able to satisfy the “substantial grounds” test, it would not be appropriate for the court to dispense with the requirement that he post security. Indeed, the applicant has not requested, either in his Notice of Motion, nor in submissions, that the requirement for the posting of security be dispensed with.

[69] Since the applicant would not be permitted to dispose of the property pending final disposition of the action pursuant to sub rule 44.03(1) of the Rules of Civil Procedure the balance of convenience would therefore favour the respondent. The applicant has not indicated that he has any use for the kilns and bins pending final disposition of the proceeding other than to sell them, whereas the respondent has deposed that she intends to use them in her tobacco business. In my view, it is better that the kilns and bins be put to productive use pending final disposition of the proceeding, rather than sit idle.

[70] For the reasons set forth above, the motion is dismissed, as the applicant has been unable to satisfy the substantial grounds test and the balance of convenience rests with the respondent.

[71] In light of this finding it is not necessary for me to make a determination as whether the kilns are chattels or fixtures, nor whether s. 104 of the Courts of Justice Act conflicts with sections 87 to 89 of the Indian Act in respect of the respondent.

Costs

[72] The parties are encouraged to agree on the costs of the motion. If they are unable to agree the respondent may make written submissions as to costs within 21 days of the release of this endorsement. The plaintiff has 14 days after receipt of the defendant’s submissions to respond. The submissions shall be brief, not exceeding three double spaced pages, excluding Bills of Costs or Costs Outlines. The respondent may deliver brief reply submission (not exceeding two double-spaced pages) within 7 days after receipt of the plaintiff’s submissions. All such written submissions are to be forwarded to me at my chambers at 85 Frederick Street, 7th Floor, Kitchener, Ontario N2H 0A7. If no submissions are received within this timeframe, the parties will be deemed to have settled the issue of costs as between themselves.

D. A. Broad J. Date: July 19, 2016