COURT FILE NO. 66/15 (Cobourg)
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Randy Drew and Paul Shaughnessy
Plaintiffs
– and –
Linda Huskinson
Defendant
William Kelly, for the plaintiffs
John Ewart, for the defendant
Heard: November 14, 15, 16 and 17, 2016
ENDORSEMENT
[1]
Overview
The plaintiffs are farmers. The defendant owns a farm. The plaintiffs say that the defendant agreed to lease her farmland to them, during a period of three years, for the purpose of growing cash crops, and that in December 2012, she unlawfully terminated the agreement, resulting in a loss of the profit that they would have earned had they been able to farm the land during the two-year balance of the lease term.
2The defendant pleads two defences. First, she says that she was entitled to avoid the lease, because she signed it under duress. Second, she says that the plaintiffs breached the lease, entitling her to terminate it when she did. Both defences fail, for the following reasons.
[3]
Background
In the fall of 2011, the plaintiffs approached the defendant and asked whether she would be interested in leasing her land to them. They say that, after a couple of meetings, the defendant agreed to lease the land to them for three years, at an agreed-upon rent. The defendant denies that an agreement was reached, but I do not accept her denial. She allowed the plaintiffs to go into possession of the land, in order to prepare it for planting the following spring, and I don’t believe that she would have allowed them to do so, or that they would have done so, in the absence of a binding agreement to lease. E
4In April of 2012, on the day that she had been advised the plaintiffs intended to begin farming, the defendant blocked her driveway to prevent them from entering. When Paul Shaughnessy discovered that the driveway was blocked, he called Randy Drew, and the two of them agreed that the O.P.P. should be called to guard against a breach of the peace, and to protect them from any false allegations that the defendant might make.
5Two O.P.P. officers did attend, and after confirming that the parties on both sides were prepared to negotiate, they stepped back and waited while the parties attempted to reach a resolution. A draft lease had been prepared by Paul Shaughnessy, and given to the defendant two days earlier. A resolution was reached: at the request of the defendant, several additions were made to the draft, and the lease was then signed.
[6]
The Plea of Duress
For the following reasons, I don’t accept the defendant’s plea of duress. First, she admitted during cross-examination that the presence of the O.P.P. officers was a benefit to her as well as to the plaintiffs. Second, she had already agreed to the material terms of the lease, and the only changes made were additional terms at her request. Third, she said that at the time she signed the lease, she was thinking that it was only for one year, and that she could put up with it for that long – this amounts to an admission that she signed the lease voluntarily. She says that she “didn’t notice” that the term of the lease was three years, but I find that she did – a three-year term had been agreed upon the previous December, she had been given a copy of the draft lease two days earlier, the first term of the lease was that it was “a binding agreement for the crop years of 2012, 2013 & 2014”, and the third term of the lease set out the rent per acre for each of the three years. And finally, if there was any doubt, it would be dispelled by the fact that following the signing of the lease, she allowed the plaintiffs to go into possession and farm the land, and said nothing until eight months later.
[7]
Repudiation and Breach
By a letter to the plaintiffs dated December 12, 2012, the defendant repudiated the lease in the following words:
At this point the above tenant farmers can choose to sign an agreement to continue or discontinue renting the farmland within the above farm property. A new agreement to continue or discontinue renting the above farmland must be drafted, agreed upon by the Tenant farmer Randy Drew and Landlord Linda Huskinson and signed on or before January 31, 2013 to allow the next full crop season to begin on time. If no amicable agreement is drafted and signed on or before January 31, 2013, the above named tenant farmers shall cease to rent the farmland within the above named farm property and new tenant farmers will be able to rent this land for the 2013 crop season and beyond.
Before a new written agreement is drafted to satisfy all parties involved, it will be necessary to agree in writing that the existing written agreement signed April 12, 2012 is null and void.
All work on the farmland within the above located farm property shall be suspended for the above named tenant farmers including all their workers from this day forward until such time as a new written agreement is drafted, agreed upon by all parties involved and signed and the existing agreement dated April 12, 2012 is declared and signed as being null and void.
8The plaintiffs were not prepared to agree, as a prerequisite to the negotiation of a new agreement, that the existing agreement was null and void, and although some further correspondence ensued, no new agreement was reached.
9The defendant acknowledges that her letter had the effect of repudiating the lease, but argues that she was entitled to terminate the lease, because the plaintiffs failed to comply with a term of the contract which required them to “Supply Application Rates of Fertilizer & chemicals by 3rd party.” Her position is that she was entitled to some sort of formal document from the third parties who applied the fertilizer and chemicals, but that all she got was a handwritten note from Randy Drew advising her of the fertilizer and chemicals applied. The plaintiffs’ evidence is that the third parties were unable to provide the sort of document that the defendant was requesting, because they applied the fertilizer and chemicals to multiple farms that were farmed by the plaintiffs, and provided a single invoice only, for all of those farms.
10Whether the information provided to the defendant relating to fertilizer and chemicals satisfied the relevant term of the contract or not, she was not entitled to terminate the lease. Failure to provide the information relating to fertilizer and chemicals in the form requested by the defendant would in no way amount to substantial non-performance. The benefit for which the defendant contracted was the payment of rent. If there was a breach, her remedy would lie in damages.
[11]
Damages
The plaintiffs are therefore entitled to their damages, based upon the profit that they would have earned had the defendant not repudiated the lease. The plaintiffs’ damages calculation utilized OMAFRA average yields and costs of production, and a white bean contract they had for 2013. Based upon the evidence given, including evidence that the plaintiffs generally outperformed the provincial averages, I am satisfied that their loss for 2013 was $66,010.14, and for 2014 $18,440.88, except that their damages calculation does not include, in the costs of production, the rent payable to the defendant which would have been $10,200 per year.
12The plaintiffs were unable to mitigate their damages because their capacity to farm land exceeded the farmland available to them.
[13]
Conclusion
In the result, the defendant will pay damages to the plaintiffs in the amount of $64,051.02.
[14]
Costs
If the parties are unable to agree on costs, I will consider brief written argument, provided that it is delivered to my assistant’s attention at Judges’ Reception, Sixth Floor, Durham Region Courthouse, no later than February 28, 2017.
“Bale J.”
Released: January 24, 2017
CITATION: Drew v. Huskinson, 2017 ONSC 592
COURT FILE NO. 66/15 (Cobourg)
DATE: 20170124
ONTARIO
SUPERIOR COURT OF JUSTICE
Between:
Randy Drew and Paul Shaughnessy
Plaintiffs
– and –
Linda Huskinson
Defendant
ENDORSEMENT
Bale J.
Released: January 24, 2017