Court File and Parties

BARRIE COURT FILE NO.: 16-561 DATE: 20160819 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sky High Roofing & Sheet Metal Inc., Plaintiff AND: Scott Bennett, Defendant

BEFORE: THE HON. MR. JUSTICE G.M. MULLIGAN

COUNSEL: A.H. McInnis, Counsel for the Plaintiff A. Chapman, Counsel for the Defendant

HEARD: August 9, 2016

Endorsement

[1] The plaintiff, Sky High Roofing & Sheet Metal Inc. (Sky High) brings a motion for an interim order pursuant to Rule 44 for the return of three pieces of equipment currently in the possession of the defendant, Scott Bennett (Bennett). The equipment is more particularly described on Schedule “A” attached hereto. The first two pieces are a tractor and bucket. The plaintiff is leasing this equipment from John Deere Financial Inc. (John Deere) for a 60-month period with a buyout option available at the end of the 60 months. The third piece of equipment is a baler. The plaintiff purchased this under a finance agreement with John Deere by way of monthly payments. The plaintiff continues to make all necessary payments to John Deere pursuant to both of these obligations.

[2] This matter is proceeding under the Simplified Rules of the Rules of Civil Procedure. For the purpose of this motion, both the defendant, Bennett and the plaintiff’s president, Robert Cloutier, have been cross-examined.

[3] Rule 44.01 provides that the court may grant discretionary relief, the recovery of personal property, provided that an affidavit sets 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.

[Emphasis added.]

[4] In this case, it is unclear as to the value of the property. The value of the property becomes important if the court considers making an order under Rule 44.02 as to security to be posted by either the plaintiff or the defendant, depending on the decision of the court. However, in this case, both counsel concede that if the personal property is delivered to the plaintiff or retained by the defendant, no security for costs need be posted.

[5] It is not disputed that the equipment came to be in the hands of the defendant by lawful means. The president of Sky High was going through matrimonial difficulties and made a decision to deliver this equipment to the defendant during the currency of those proceedings. The defendant agreed to store the equipment at his farm. Meanwhile, the plaintiff continued to make regular payments to John Deere pursuant to its lease obligations for the tractor and bucket, and its finance obligations for the baler.

[6] In November of 2015, over a year after the equipment had been delivered to the defendant, the parties had some discussions about purchasing the equipment. They had discussions and e-mails back and forth. No written agreement was ever entered into. In my view, there is a triable issue as to whether or not an agreement to purchase was ever entered into. It is not the role of the court on this interim possession motion to make that determination. However, the steps taken by the defendant are worth noting. The defendant contacted John Deere to determine the buyout values on this equipment. Having determined those values, he sent a cheque to John Deere for the amount requested. However, shortly thereafter, John Deere became aware that its customer, Sky High, had not agreed to a buyout by this third party, Bennett. John Deere then issued a refund cheque to Mr. Bennett. Although Mr. Bennett received the cheque, he refused to negotiate it, in effect, leaving his money voluntarily in the hands of John Deere. It should be noted that John Deere has been made a third party to this action, but did not take a position with respect to this motion for interim preservation.

Position of the Plaintiff

[7] The plaintiff’s position is that there was never a meeting of the minds between Sky High or its president, Mr. Cloutier, and Mr. Bennett. No price had been agreed upon. It is plain and obvious that paying out John Deere by the defendant would not provide the plaintiff with any compensation for equity, if any, in the equipment that it may have achieved by payments made over the prior months. The plaintiff further submits that it has been placed in a position of hardship. The equipment is no longer available for its use in its business. Meanwhile, it continues to make payments to John Deere, in accordance with its contractual obligations. The defendant is not making payments to John Deere, is using the equipment, and has available to it a full refund of what it paid to John Deere.

Position of the Defence

[8] The position of the defence is that an agreement was reached. Acting on that agreement, he sent funds to John Deere in full satisfaction of their requirements for the lease and financing contract. He sold other equipment and began using this equipment in connection with his farming operations, believing he was entitled to do so. The defence position is that the plaintiff’s president, Mr. Cloutier, simply changed his mind in light of his ongoing family law dispute, and that the balance of convenience favours the equipment being left with Mr. Bennett in support of his farming operations until the trial of this matter.

Conclusion

[9] The requirement of Rule 44.01 requires that the plaintiff set out in affidavit form that it is lawfully entitled to possession of the property and that the equipment is being unlawfully detained by the defendant. The defendant disputes that he is unlawfully detaining the equipment. The position of each side has been tested by way of cross-examination on affidavits.

[10] There is no evidence before the court that the John Deere equipment is depreciating in any meaningful way. The value of these assets has not been clearly established at this point. I acknowledge that the plaintiff has lost the use of this equipment, but it should be noted that it voluntarily put this equipment into the hands of the defendant for over a year before there were any discussions about purchase. During that time, it continued to make payments to John Deere. In spite of the obvious value of this equipment, no written agreement was entered into at the time. Whether a purchase was ever consummated between the parties is a triable issue. This triable issue can be adjudicated on a summary procedures trial.

[11] In my view, the plaintiff is not entitled to the discretionary relief sought by it pursuant to Rule 44.01. One of the tests for this discretionary relief under Rule 44.01 is that the property is being unlawfully detained by the defendant. That is a triable issue. Any prejudice to the plaintiff can be subject to its claim for damages for loss of the use and enjoyment of this equipment. The plaintiff may also choose to call evidence with respect to any depreciation in the value of the equipment while in the defendant’s possession.

[12] The plaintiff’s motion is dismissed.

Costs

[13] At the conclusion of this hearing, both parties agreed that an award of costs of $5,000, all inclusive, to the successful party would be fit. It is therefore ordered that costs are payable by the plaintiff, Sky High Roofing & Sheet Metal Inc. to the defendant, Scott Bennett within 30 days of the release of this endorsement.

MULLIGAN J. Date: August 19, 2016

Schedule “A”

JOHN DEERE EQUIPMENT (i) 2012 John Deere 6430L Utility Cab Tractor VIN #1L06430XEBG699419 (“the John Deere Tractor”) (ii) 2013 Farm Loader/Material Bucket VIN #1P0H310XLDC004746 (“the Material Bucket”) (iii) 2012 John Deere 0458SE Silage Round Baler VIN #1E00458SHCC380609 (“the Round Baler”)