COURT FILE NO.: 13-58774
DATE: 20180716
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ST. LAURENT AUTOMOTIVE GROUP INC., and IMPORT AUTO LEASING INC.
Plaintiffs
– and –
SAMI’S GARAGE LTD., YASSINE JABBAR, SAMI ABI KHALED, and DMITRI KHALIFE
Defendants
SAMI’S GARAGE LTD, AND SAMI ABI KHALED
Plaintiffs by Counterclaim
ST.LAURENT AUTOMOTIVE GROUP INC., IMPORT AUTO LEASING INC., JOHN MIERINS, ANDREA CHAMBERS, YASSINE JABBAR, and DMITRI KHALIFE
Defendants by Counterclaim
Kenneth Radnoff/Jennifer Aouad, for the Plaintiffs
Richard Bosada/Diane Condo, for the Defendants, Sami’s Garage Ltd., and Sami Abi Khaled
Richard Bosada/Diane Condo, for the Plaintiffs by Counterclaim, Sami’s Garage Ltd., and Samie Abi Khaled
Kenneth Radnoff/Jennifer Aouad, for the Defendants by Counterclaim
HEARD: May 7 to 10, May 14 to 18, and May 25, 2018
REASONS FOR JUDGMENT
toscano roccamo j.
Introduction and Background
[1] Just like wolves in sheeps’ clothing, thieves thrive best in environments vulnerable to their artifice.
[2] Between January and May 2013, Dmitri Khalife (“Khalife”), in association with Yassine Jabbar (“Jabbar”) of Amana Motors, misrepresented himself to be a licensed wholesaler of vehicles, and forged transfer documents with a view to selling 23 vehicles lawfully owned by the corporate Plaintiffs, St. Laurent Automobile Group Ltd. (“St. Laurent”) and Import Auto Leasing Inc., (“Import Auto”) to the corporate Defendant, Sami’s Garage Ltd. (“Sami’s”).
[3] Five of the vehicles (the “missing” vehicles) are said to have been removed by Khalife from the Plaintiffs’ premises without their consent or knowledge. Seven are said to have been consigned (the “consignment” vehicles) with the knowledge and consent of the Plaintiffs’ Used Car Manager, Chris Morse (“Mr. Morse”).
[4] At all times material, Khalife was the common law spouse of the Plaintiff’s General Manager, Andrea Chambers (“Ms. Chambers”).
[5] Eleven of the vehicles (the “stop-payment” vehicles) were transferred by wholesale or retail bill of sale accompanied by ownership documents furnished to Khalife on behalf of various incarnations of his business operations, including Dmitri Automotive, Amana Motors and Autologic. Khalife stopped payment on five cheques in payment of the vehicles, after they were purchased by Sami’s.
[6] In addition, Khalife purported to sell five of the Plaintiffs’ vehicles to Sami’s for $125,000. Only three were delivered after execution of bills of sales and before ownership documents were delivered. Khalife wrote a cheque to Sami’s in reimbursement for $125,000; however, the cheque was dishonoured and Sami’s returned the three vehicles to the Plaintiffs on or about June 10 or 11, 2013.
[7] During the same timeframe, Khalife purported to sell four of Sami’s vehicles to St. Laurent after execution of bills of sales, and with transfer of ownership documents. One of the vehicles was never delivered. Three were purchased for the sum of $161,590 and were said to be in the possession of the Plaintiffs when Khalife’s cheques to Sami’s in respect of the four vehicles were dishonoured by the bank. Sami’s made a demand for their return to which the Plaintiffs did not respond.
[8] Finally, by the time the wrongdoing came to light on or before June 7, 2013, Sami’s had sold all 23 of the Plaintiffs’ vehicles to other buyers.
The Issues
The Main Claim
Did Sami’s acquire good title to the missing, consignment, or stop-payment vehicles?
If not, are Sami’s and its principal, Sami Abi Khaled, liable to the Plaintiffs in conversion for the assessed value of the vehicles?
Should the Plaintiffs’ loss be reduced or offset by reason of a failure to mitigate on the part of the Plaintiffs?
If Sami’s and Sami Abi Khaled are liable to the Plaintiffs in conversion, what is the measure of this loss?
The Counterclaim
Did the Plaintiffs acquire good title to the vehicles transferred by Sami’s to Khalife before he stopped payment for the vehicles?
If not, are the Plaintiffs liable to Sami’s in conversion for the assessed value of the vehicles?
If so, what is the measure of this loss?
Are Sami’s and Sami Abi Khaled entitled to aggravated damages against the Plaintiffs?
The Litigation History and the Claims Maintained as at the End of Trial
[9] In a Statement of Claim issued September 11, 2013, the Plaintiffs claimed damages in joint and several liability against the Defendants in the amount of $1 million dollars plus punitive and exemplary damages of $250,000.
[10] Khalife was sued for breach of trust, breach of fiduciary duties, breach of contract, theft, fraudulent misrepresentation, conspiracy, and fraud.
[11] Jabbar was sued for conspiracy, fraud, and conversion.
[12] Sami’s Garage and Sami Abi Khaled (“Mr. Khaled”) were sued for conspiracy, fraud, and conversion.
[13] In a Statement of Defence and Counterclaim issued November 7, 2013, on behalf of Sami’s and Sami Abi Khaled, these Defendants denied all wrongdoing and counterclaimed against St. Laurent and Import Auto, the principal officer and director of the corporate Plaintiffs, John Mierins (“Mr. Mierins”), Ms. Chambers, and Mr. Morse for contribution and indemnity for any amounts found to be owed by the Sami’s Defendants by reason of intentional or negligent misrepresentation as to Khalife’s authority to sell vehicles on the Plaintiffs’ behalf, seeking general damages in the sum of $250,000 and aggravated and exemplary damages in the additional amount of $250,000.
[14] The Plaintiff corporations were sued for breach of contract, fraud, conspiracy to defraud, and wrongful enrichment in relation to the unlawful conversion of four motor vehicles alleged to have still been in their possession when Sami’s advised of Khalife’s dishonoured cheques for the purchase of same. This Claim is for the additional sum of $173,116 said to be the total value of the vehicles.
[15] Mr. Mierins was sued for defamation, libel, and slander in relation to a written notice sent to others engaged in the sale of new and used vehicles, and in relation to additional comments made to third parties suggesting wrongdoing on the part of Sami’s and Sami Abi Khaled.
[16] Khalife was sued for fraud, conspiracy, conversion, and breach of contract in a claim for general damages in the amount of $125,000 plus the additional sum of $204, 417 for dishonoured cheques for the purchase of vehicles from Sami’s Garage.
[17] Jabbar was sued for fraud, conspiracy, unjust enrichment, breach of contract, and intentional misrepresentation in allowing the improper use of the license issued to his business, Amana Motors, to facilitate Khalife’s sale of vehicles.
[18] In a Reply and Defence to the counterclaim on behalf of the corporate Plaintiffs, Mr. Mierins, and Ms. Chambers denied all wrongdoing alleged by the Sami’s Garage Defendants/Plaintiffs by Counterclaim and alleged that Jabbar advised them that Khalife and Sami Abi Khaled were parties to the fraud perpetrated against the corporate Plaintiffs.
[19] Khalife did not defend the main action and Counterclaim and was noted in default in respect of both.
[20] Jabbar filed a Statement of Defence to the main action on January 24, 2014, but was noted in default in respect of the Counterclaim by Sami’s and Sami Abi Khaled.
[21] Neither Khalife nor Jabbar participated at trial.
[22] Khalife was criminally charged in a twelve count indictment in connection with fraud, criminal conversion of property, and possession of proceeds in excess of $5,000 obtained in the commission of crimes (Exhibit 5). Ms. Chambers gave evidence that Khalife has been charged with threatening and criminally harassing her. He remains at large.
[23] All attempts made by the Plaintiffs to summons Jabbar to trial were unsuccessful.
[24] Although Jabbar did not give evidence at trial, he was examined for discovery. Although the Plaintiffs at one point in the trial suggested they would read in evidence from a transcript of Jabbar’s Examination for Discovery, they did not do so. I can only thereby surmise that the content of the transcripts would not have advanced their cause.
[25] By the end of the trial, the Plaintiffs limited their case against Sami’s and Sami Abi Khaled to a claim for damages in conversion, and relied upon the Sale of Goods Act, R.S.O. 1990, c. S.1. They maintained all other claims advanced as against Khalife and Jabbar.
[26] By the end of trial, Sami’s and Sami Abi Khaled withdrew their claims for damages in libel and defamation, and for punitive damages as against the Plaintiffs.
[27] In the course of trial, I received no evidence to establish a fiduciary or trust relationship as between the Plaintiffs and Khalife; as such, I make no findings in relation to these allegations, although Khalife can be deemed to have admitted the rest of the allegations pertaining to his wrongdoing. Similarly, Jabbar can be deemed to have admitted the allegations advanced against him in the Counterclaim.
[28] In the course of trial, I received evidence from Ms. Chambers in relation to Jabbar, his business dealings with Khalife in the home she shared with Khalife, and Jabbar’s delivery of documentation for HST purposes in relation to sales transactions. This evidence would support a claim in conspiracy, fraud, and conversion as against Jabbar.
[29] In the course of written argument, the Plaintiffs submitted that the Statement of Defence and Counterclaim filed for Sami’s and Sami Abi Khaled was deficient in that it failed to adequately claim conversion as against the Plaintiffs. They also submitted that the Sami’s Defendants/Plaintiffs by Counterlaim failed to plead the Sale of Goods Act, the Factors Act, R.S.O. 1990, c. F.1, and the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29. In my opinion, the Statement of Defence and Counterclaim filed by these Defendants was broadly framed to include allegations to the effect that Khalife was misrepresented to be the Plaintiffs’ agent; references were further made to the claim of conversion. I am satisfied that the pleadings, while not particularised, provided adequate notice to the Plaintiffs of the claims they were required to meet at trial. There was no prejudice that arose by reason of any deficiency in the pleadings. Accordingly, it is in the interests of justice to allow these Defendants to advance the statutory and legal basis for these claims.
The Agreed Facts (Exhibits 2 and 11)
[30] In the first of two Agreed Statements of Fact, the parties identified as vehicles 1 to 11 the year, make, model, and vehicle identification number (VIN) of 11 vehicles the Plaintiffs sold to Khalife under his various business names, following which he stopped payment on them.
[31] The parties similarly identified as vehicles 12 to 18, the year, make, model, and VIN numbers of seven vehicles the Plaintiffs consigned but never sold to Khalife.
[32] The parties identified as vehicles 19 to 23, the year, make, model, and VIN numbers of five vehicles registered to the Plaintiffs but which were subsequently found to be missing. Vehicles 20 to 23 were recovered, and no damages were sought in respect of vehicles 22 and 23. Vehicle 19 was never recovered.
[33] The parties further identified as vehicles 24 to 63, the year, make, model, and VIN numbers of 40 other vehicles the Plaintiffs sold to Khalife between January and June 2013, for which they received payment in full (the “40” vehicles).
[34] Save and except vehicles 41 and 53, all 63 vehicles were transferred from the Plaintiffs to Amana Motors, and then subsequently to Sami’s.
[35] The police were called on June 8, 2013, to investigate.
[36] Khalife and his business, Autologic, were not licensed by registration with the Ontario Motor Vehicle Industry Council (OMVIC).
[37] In the course of trial, the parties further agreed that vehicle 7, a stop-payment vehicle, seven consignment vehicles numbered 12 to 18, and five missing vehicles numbered 19 to 23 had PPSA liens registered against them prior to June 10, 2013. However, it is unclear whether vehicle 13 continued to be subject to a lien on June 10, 2013. Moreover, the lien on vehicle 23 was registered April 30, 2013, by a party unrelated to the action.
Relevant Statutory Provisions
[38] The facts of this case call into question the application of ss. 22, 24, 25(4) of the Sale of Goods Act, as well as section 2(1) of the Factors Act, the provisions of which are as follows:
Sale by a person other than owner
Section 22:
Subject to this Act, where goods are sold by a person who is not the owner thereof and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by conduct precluded from denying the seller’s authority to sell but nothing in this Act affects,
a) The Factors Act or any enactment enabling the apparent owner of goods to dispose of them as if he, she or it were the true owner thereof;
b) The validity of any contract of sale under any special common law or statutory power of sale or under the order of a court of competent jurisdiction.
Sale under voidable title
Section 24:
When the seller of goods has a voidable title thereto, but the seller’s title has not been avoided at the time of the sale, the buyer acquires a good title to the goods if they are bought in good faith and without notice of the seller’s defective title.
Definition
Section 25(4)
(4) In this section, “mercantile agent” means a mercantile agent having, in the customary course of business as such agent, authority either to sell goods or to consign goods for the purpose of sale, or to buy goods, or to raise money on the security of goods. R.S.O. 1990, c. S.1, s. 25.
Section 2(1) of the Factors Act
Where a mercantile agent is, with the consent of the owner, in possession of goods or of the documents of title to goods, a sale, pledge or other disposition of the goods made by the agent when acting in the ordinary course of business of a mercantile agent is, subject to this Act, as valid as if the agent were expressly authorized by the owner of the goods to make the disposition, if the person taking under it acts in good faith and has not at the time thereof notice that the person making it has not authority to make it.
The Missing Vehicles
Did Sami’s acquire good title to the vehicles pursuant to the Sale of Goods Act?
[39] Mr. Mierins, Ms. Chambers and Mr. Morse all testified that five vehicles were identified as missing from the lot upon discovery of Khalife’s scheme, following an inventory undertaken on June 11, 2013. These vehicles had not been subject to agreements of purchase and sale, either wholesale or retail.
[40] In examination-in-chief, Mr. Mierins confirmed that following an extensive investigation, these vehicles were declared stolen by police and reported as such in the Canadian Police Information Centre (CPIC).
[41] During his examination-in-chief, Mr. Morse reviewed all documents relating to the missing vehicles at Tabs 19 to 23 of Exhibit 1 and stated that neither he nor his employees had authorized their sale, nor provided ownership documents, nor signed over the ownership documents for any one of the five missing vehicles.
[42] Khalife had neither the consent nor the authority of the Plaintiffs to sell the missing vehicles.
[43] Khalife was charged in connection with the theft of these vehicles as revealed by a certified copy of an Information filed against the accused Khalife (Exhibit 5).
[44] By contrast, Sami Abi Khaled testified that he only ever dealt with Khalife, and that all ownership documents were delivered to him by Khalife in the name of Sami’s Garage Ltd., operating as Sami’s Auto Sales.
[45] These Defendants assert that Mr. Morse acknowledged in cross-examination that he could not say whether the vehicles were given to Khalife on consignment or which vehicles were indeed stolen. Mr. Morse also gave evidence he did not notice these vehicles were missing until June 10 or 11, 2013, in that he failed to take inventory of the vehicles on the Plaintiffs’ lot. As such, the Defendants argued that the vehicles could be considered to have been “provided” to Khalife to show to prospective buyers as in the case of the consignment vehicles.
[46] I decline to draw this inference, and instead find that these vehicles were stolen, as determined by the Plaintiffs and an extensive police investigation resulting in the criminal charges laid against Khalife.
[47] The missing vehicles were not offered to Khalife in the way the consigned vehicles were. They disappeared from the Plaintiffs’ lot and registered ownership was fraudulently transferred by forgery to Sami’s via Khalife and/or Yassine Jabbar from Amana Motors without the consent or authority of the Plaintiffs.
[48] I accept the Plaintiffs’ submissions that, if goods are stolen by a person who is not the owner of them and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had. This principle is codified by s. 22 of the Sale of Goods Act.
[49] In order to acquire title, a seller must have gained possession of goods under a contract with the true owner, such contract being valid until determined by the true owner on the basis of fraud or mistake. However, this will only be the situation where the contract with the true owner was a de facto contract:
There must have been a contract, albeit one which was voidable at the option of the owner of goods. If there was no such contract, either because the “contract” was in fact a nullity on the grounds of mistake, or because the goods were stolen, i.e. obtained larsonistly from the true owner, then no title of any kind passes to the person obtaining the goods, who, consequently has no title to pass to the innocent purchaser from him: G.H.L. Fridman, Sale of Goods in Canada, 2nd ed (Toronto: Thomas Canada Ltd., 2010) at 144-145.
[50] Fridman goes on to note:
[The Sale of Goods Act] contemplates that a sale by someone who is not invested with title to goods, or the legal right to dispose of the title to goods, will be an invalid sale, and as such the buyer receives nothing: Fridman, ibid, at 109.
[51] I adopt the reasoning in Zen-Zam Enterprises Inc. v. Mehrabin, 2006 CarswellOnt 3220 (S.C.), at paras. 17-20, where diTomaso J. applied s. 22 of the Sale of Goods Act and decided that a party could have no better title than the title he himself acquired:
In this case, Mehrabin sold a stolen vehicle to Richmond Hill not knowing the vehicle was stolen. Mehrabin did not receive title from his seller, and in turn Mehrabin did not pass title to the vehicle to Richmond Hill. Where there is recourse, Mehrabin has a cause of action against whomever sold the vehicle to him. See McCallen v. Goldman (1982), 38 O.R. (2d) 436 (Ont. Co.Ct.) at page 443, 446.
Richmond Hill relies upon the maxim of nemo dat quod non habet standing for the general rule of law that no one can transfer a better title to goods than he himself possesses.
This maxim is codified, in part, in s. 22 of the Sale of Goods Act.
Are Sami’s and Sami Abi Kahled, liable to the Plaintiffs in conversion for the missing/stolen vehicles?
[52] As none of the vehicles sold by Khalife and/or Jabbar for Amana to Sami’s remained in the possession, power or control of Sami’s, having been sold to others, the Plaintiffs rely on the tort of conversion to recover damages against the Sami’s Defendants.
[53] I find that the tort of conversion has been made out on the facts as agreed and found, insofar as the missing vehicles are concerned. In arriving at this conclusion, I adopt the reasoning of Aitken J. in Wymor Construction Inc. v. Gray, 2012 ONSC 5022, at paras. 11-12, as follows:
11 The essence of the tort of conversion was outlined by Iacobucci J. in Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce, [1996] 3 S.C.R. 727, at para. 31:
The tort of conversion involves a wrongful interference with the goods of another, such as taking, using or destroying these goods in a manner inconsistent with the owner’s right of possession. The tort is one of strict liability and, accordingly, it is no defence that the wrongful act was committed in all innocence.
12 This characterization of the tort of conversion has been subsequently adopted by numerous courts. By way of example, see: Westboro Flooring & Décor Inc. v. Bank of Nova Scotia (2004), 71 O.R. (3d) 723 (C.A.) at para. 14; Khosla v. Korea Exchange Bank of Canada, [2008] O.J. No. 4344, at para. 13, aff’d 2009 ONCA 467, at paras. 5-6; and Franklin Traffic Surface Inc. v. Canadian Imperial Bank of Commerce, [2008] O.J. No. 3898 (S.C.J.), at para. 32.
[54] As the tort of conversion is a strict liability tort, it renders its principal, Sami Abi Khaled, jointly and severally liable for the conversion: see Klar Lewis N. et al., Remedies in Tort (Toronto: Carswell) (looseleaf) at 4-60. There is little doubt that Mr. Khaled exercised a controlling mind over Sami’s in directing sale of the missing or stolen vehicle to others, and as such, the tort of conversion is made out.
Was there a duty upon the corporate Plaintiffs to mitigate their loss in respect of the missing and stolen vehicles?
[55] While refuting liability to the corporate Plaintiffs for damages in conversion, Sami’s and Sami Abi Khaled advanced the alternative position that, in the event of any finding of liability on their part, it would be met by the Plaintiffs’ failure to mitigate their loss.
[56] These Defendants conceded in argument that the evidentiary burden of proof to establish any failure to mitigate would rest upon them. However, in meeting this burden, they sought to rely on the same body of evidence with respect to conduct attributed to the corporate Plaintiffs through the acts or omissions of Mr. Mierins, Ms. Chambers, and Mr. Morse. These Defendants argue that, but for this conduct, Khalife would not have been in a position to represent himself to Sami Abi Khaled as a mercantile agent acting in the customary or ordinary course of business, as a wholesaler and retailer of the Plaintiffs’ vehicles, within the meaning of s. 22(a), s. 25(4) of the Sale of Goods Act, and s. 2(1) of the Factors Act.
[57] In support of their position, these Defendants referred me to the reasoning in Southcott Estates Inc. v. Toronto Catholic School Board, 2012 SCC 51, [2012] 2 S.C.R. 675, at para. 72, for the general rule that a plaintiff will not be able to recover consequential losses which he would have avoided by taking reasonable steps. In my opinion, the facts in Southcott are markedly different such as to preclude its application.
[58] The main issue in Southcott was whether the plaintiff corporation, as a single purpose company established solely to facilitate a specific commercial land purchase, could be excused from mitigating its losses when the vendor failed to satisfy a condition in the agreement of purchase and sale and refused to extend the closing date of the transaction. In dismissing Southcott’s claim for specific performance and consequential losses, the Supreme Court recognized that there may be circumstances where an aggrieved party has a “fair, real, and substantial justification” to seek specific performance and damages. The facts adduced at trial, coupled with expert evidence, established that comparable properties suitable for development were available to Southcott, affording mitigation opportunities.
[59] The discussion pertaining to available remedies in commercial contracts between the parties to an agreement of purchase and sale should not be applied to the circumstances before me where, without color of right and unbeknownst to the corporate Plaintiffs, Khalife stole or removed without lawful justification their vehicles, failed to pay for them, and by fraudulent measures purported to transfer them to Sami’s and Sami Abi Khaled.
[60] These Defendants also sought to rely upon the holding in DaimlerChrysler Canada Inc., v. Associated Bailiffs and Co. Ltd. (Ont. S.C) where, on a summary judgment motion, DaimlerChrysler claimed damages with respect to the loss or disappearance of two large pieces of industrial equipment. Prior to the hearing of the summary judgment motion, Associated Bailiffs advanced a cross-motion to withdraw an admission in the Statement of Defence to the effect that it had ever taken possession of one of the two pieces of equipment referred to as a “Shear.” Perell J. granted DaimlerChrysler partial summary judgment for damages in conversion with respect to the other piece of equipment referred to in the record as a “Cat” that was admitted to have been in the possession of Associated Bailiffs. However, at para. 18, Perell J. ordered a trial for the assessment of damages with respect to the Cat, that allowed an argument with respect to mitigation of this loss to go ahead, based on the reasoning that the case law recognized that mitigation may be a factor in a claim for the tort of conversion. However, Perell J. intimated that the factual record before him, taken on its own, would not establish a genuine issue for trial as to mitigation of the loss. As I read this decision, Perell J. did not address the loss alleged with respect to the “Shear”, as the cross-motion of Associated Bailiffs sought to establish that the defendant never came into possession of the Shear.
[61] The facts in DaimlerChrysler suggest that Associated Bailiffs took possession of the Cat with DaimlerChrysler’s knowledge and consent. They did not relate to circumstances where the defendant was said to have taken possession of chattels by theft or without the knowledge or consent of the titled owner, as in the case before me. On the facts as I find them, the missing vehicles were subject to a police investigation and found by police to have been stolen. Khalife did not enter a defence to these proceedings and would be deemed to have admitted theft of the missing vehicles.
[62] I am of the view that, by advancing an argument based on failure to mitigate the loss, these Defendants conflate the evidence pertaining to conduct that may be raised under s. 22(a) of the Sales and Goods Act in respect of the consignment vehicles, subsequently addressed by these Reasons, with the loss occasioned by theft of the missing vehicles, which came to light only after the police investigation was concluded.
[63] Upon being met with the results of the police investigation, the corporate Plaintiffs through the combined efforts of Mr. Mierins, Ms. Chambers, and Mr. Morse, instructed a bailiff to attempt to locate the vehicles and incurred other costs of recovery. These efforts met with partial success. In addition, they took steps to register liens on the other vehicles which were subsequently found to be in the possession of Sami’s. As such, I find that the corporate Plaintiffs took reasonable measures to mitigate their losses.
What is the measure of damages for the missing or stolen vehicles?
[64] Mr. Mierins testified by reference to Exhibit 15 that vehicle 19, a Chevy Silverado, was never recovered, and was therefore a total loss. Further, the amounts recovered for vehicles 20 and 21 reflected a loss equal to the difference between fair market value and sale proceeds. The Plaintiffs credited the Defendants with very modest profits in relation to the sale of vehicle 23. A claim for the net loss of $40,792 did not consider the cost of recovery and steps taken to ready the vehicles for sale.
[65] Mr. Mierins employed over 30 years of experience in the industry, coupled with that of Ms. Chambers, to estimate fair market value of the missing or stolen vehicles.
[66] Sami’s and Sami Abi Khaled argued that the amounts claimed are inflated, based on the prices Mr. Khaled paid Khalife for these vehicles, drawing on his own experience of over 30 years in the used car business. However, Mr. Khaled’s evidence was that he relied on the opinion of others as well as an Adesa Auction Guide in relation to the fair market value of more expensive vehicles priced in excess of $15,000.
[67] While I accept the content of the “Will-Say” statements of Michel Akl (Exhibit 20) and Wassim Abi Khaled (Exibit 21) tendered by agreement into evidence in lieu of calling these witness, the statements offer only general comments to the effect that Sami Abi Khaled consulted with them from time to time on the price of vehicles and bought vehicles for fair market value at Sami’s. The Will-Say statements did not speak to the missing vehicles per se.
[68] It is also the case that Sami’s made profits on the resale of vehicles he purchased at what he considered to be fair market value from Khalife. I, therefore, conclude that there is a range of reasonable damages that may be claimed in respect of the missing and stolen vehicles, due to a host of variables considered in the sale price of vehicles, including, but not limited to, the original price paid by the Plaintiffs, the laws of supply and demand, vehicle mileage, vehicle condition, work performed on the vehicles, and options on the vehicles, to name but a few.
[69] I am not prepared to conclude that the losses claimed are excessive, particularly as the Plaintiffs claimed no costs of recovery. I, therefore, fix these damages at $40,792 for which I find the Defendants Sami’s and Sami Abi Khaled, jointly and severally liable to the Plaintiffs, along with Khalife and Yassine Jabbar on behalf of Amana Motors.
The Consigned Vehicles
Did Sami’s acquire good title to the vehicles pursuant to the Sale of Goods Act?
[70] There is no contest between the parties that s. 24 of the Sale of Goods Act would afford Sami’s voidable title to the consigned vehicles, so long as the vehicles were bought in good faith and without notice of a defect in title.
[71] The evidentiary burden is upon a buyer to demonstrate that he or she has acted in good faith and without notice of the seller’s defective title: see Longpre v. Beckett, [1954] O.W.N. 645 (Ont. Cross Co. Ct. J.), at para. 6; see also Fridman, ibid, at p. 143.
[72] The corporate Plaintiffs argued, however, that Sami’s did not acquire good title to the consigned vehicles under s. 24 of the Sale of Goods Act, even if this Court finds Mr. Khaled, on behalf of Sami’s, acted in good faith and without notice of any defect in title, because Sami’s received the vehicles by way of forged ownership documents.
[73] I agree with the Plaintiffs that something more than mere possession of the goods is needed before their rightful owner may be estopped or precluded from asserting title to the goods in question. For this reason, the outcome in Holat v. Wetlaufer, 2014 BCSC 425, as discussed at paras. 42-47, does not apply on the facts before me. At para. 47, Holat provides that the doctrine of ostensible authority applies when the owner “gives the recipient a document of title, or invests him with the indica of ownership. If the owner of a car gives possession of it to another person, who is not a mercantile agent or a purchaser, in respect of whom, as will be seen later, special and different considerations are applicable, he does not hold out or represent that person as being entitled to sell” (emphasis added).
[74] In my opinion, the operative statutory provisions that apply to this case are found at ss. 25(4) of the Sale of Goods Act and s. 2(1) of the Factors Act. These provisions codify the principal of ostensible authority, where an owner may be precluded by conduct from denying the seller’s authority, as apparent owner of goods, to dispose of them as though he or she was the true owner.
[75] Pursuant to s. 25(4) of the Sales of Goods Act, and s. 2(1) of the Factors Act, a mercantile agent who is in possession of goods with the owner’s consent may validly sell the goods when acting in the customary or ordinary course of business, so long as the buyer acts in good faith and has not, at the time of sale, notice of the agent’s lack of authority.
[76] In my opinion, the law as expressed in M.J. Jones Inc. v. Henry (2002), 58 O.R. (3d) 529 (C.A.), permits Sami’s to rely on the noted statutory provisions:
If I find that Khalife was a mercantile agent acting in the ordinary course of business as a wholesale dealer in automobiles when he transferred them to Sami’s, even if Khalife lacked authority at the time of sale, having only received possession of vehicles on consignment, and even if he unlawfully pocketed the proceeds of sale; and
So long as these Defendants establish that Sami Abi Khaled acted in good faith as the directing mind of Sami’s Garage, and without actual or constructive notice that Khalife had no authority to sell the vehicles.
[77] As confirmed at para. 7 of M. J. Jones, quoting with approval the court’s reasons in Patry v. General Motors Acceptance Corp. of Canada (2000), 48 O.R. (3d) 370 ( C.A.) at para. 12, under such conditions, the test for reliance on s. 2(1) of the Factors Act (and by analogy s. 25(4) of the Sale of Goods Act) will have been made out. Under such conditions, Sami Abi Khaled is relieved from having to inquire into the limits of Khalife’s authority: M. J. Jones, at para. 13, 15-16.
[78] Moreover, in the absence of proof that the vehicles were purchased from Khalife at a price much lower than the ordinary trade or sale price, strong evidence of bad faith will not be ascribed to Sami Abi Khaled: M. J. Jones, at para. 18.
[79] On the facts as I outline them below, Khalife acted in the ordinary course of business in the sale of consignment vehicles, and the Plaintiffs enabled him to do so by their lack of oversight, and by allowing Khalife to occupy a unique position with free reign on their premises in the sale of their vehicles.
[80] The preponderance of the evidence raises the important question considered in St. John v. Horvat (BCCA), at paras. 28 and 35:
The important question is whether the [broker] customarily had authority to sell the vehicles delivered into its possession.
[…] The important question thus relates to the perception of the person dealing with the agent as to the extent of the agent's authority; did the agent appear to have authority to act on behalf of his or her principal?
Thereafter, what takes a sale or sales out the ordinary course, are circumstances that would put a reasonable buyer on actual or constructive notice of a defect in title, and a lack of authority, such as to establish bad faith.
[81] On the record before me as I received it, the evidence falls short of bad faith and notice of a defect in title on the part of Sami Abi Khaled.
John Mierins
[82] John Mierins, as directing mind of the corporate Plaintiffs, testified that his companies sold used cars wholesale at auctions or on their internet site, Automondiale, to ensure that their used car managers and salesmen were not unduly influenced by purchasers of their vehicles, including wholesalers such as Khalife.
[83] Mr. Mierins believed that the Plaintiff companies required payment of used cars by certified cheque before cars were released or taken off their lot.
[84] While he did not believe that Khalife was a “man of means” he was aware by March or April 2013, at the latest, that Khalife was buying up a large volume of the Plaintiffs’ vehicles by employing a “buy now” button on Automondiale, and was purchasing their vehicles at or about asking price.
[85] Mr. Mierins reluctantly admitted that Khalife was a “good customer”, having generated $1,104,777.00 in gross sales for the Plaintiff corporations between January and May 2013, as appears from a Summary of Transactions prepared after Khalife’s fraud came to light (Exhibit 4). Mr. Mierins admitted that he remained a valued customer until his wrongdoing came to light on June 6 or 7, 2013.
[86] Despite Mr. Mierins’ concern about the volume of purchases made by Khalife by March 2013, he took no steps other than to disable the “buy now” button at Automondiale, resulting in Khalife’s purchase of up to 12 vehicles in retail sales, an admittedly large number of retail purchases that was to his thinking “smelly.” Nevertheless, he caused no inquiries to be made.
[87] Mr. Mierins assumed by the fact that Khalife paid asking price for cars in the vast majority of cases, that Sami’s was complicit or was involved in a “buy high/sell low” Ponzi scheme of sorts, by reason of the fact that Sami’s by and large purchased the vehicles for less than what Khalife paid for them.
[88] Despite having had weekly access to sales summaries and regular meetings with Ms. Chambers, he did not look at the sales details pertaining to wholesale or retail bills of sale involving Khalife, while they were turning a high profit. Indeed, he only became aware in the aftermath that Khalife had been involved in 40 agreements of purchase and sale before the 23 in issue in these proceedings. He relied upon Ms. Chambers and Mr. Morse to scrutinize the documents for irregularities while, at the same time, he accepted the potential that he could be held personally responsible for breach of OMVIC rules with respect to compliance with regulations for the completion of wholesale and retail bills of sales, as had occurred in the past (Exhibit M).
[89] Mr. Mierins was aware of the common law relationship between Ms. Chambers and Khalife as early as 2012, when Khalife was an agent of Nicky’s Auto Sales, and before he began purchasing vehicles from the Plaintiffs.
[90] Mr. Mierins was aware that Khalife operated under the Amana Motors’ license in January 2013. As early as 2012, he knew that Khalife planned to operate his own business under the name of Autologic, a business name formerly used by the Plaintiff companies, yet Mr. Mierins took no note of the details of transactions, either personally or as drawn to his attention by Ms. Chambers and Mr. Morse, to determine why Khalife continued to use Amana Motors’ license into May 2013, in sales transactions with his companies.
[91] Mr. Mierins agreed that his accounting staff, Debbie Fisher and Elisa Salvi, raised concerns about irregularities in sales documentation for transactions involving Khalife before it “all blew up” on June 7, 2013. The concerns included the fact that cheques from Khalife or Autologic had bounced on a few occasions. Mr. Mierins initially testified that he became aware that a number of Khalife’s cheques were also being held only in interviews of staff members “in the aftermath.” Other concerns included the fact that Khalife furnished cheques for purchase of vehicles that did not match the purchaser’s information as it appeared in the bills of sales. He suggested that this motivated him to “reinforce” a policy of certified cheques in payment of used cars before they left the lot. Alternatively, if they were to be taken off the lot, he was to be told. When further pressed about the matter, Mr. Mierins offered internally inconsistent evidence by admitting he asked Mr. Morse to get certified cheques because he knew some large cheques of Khalife’s were being held. This area of his testimony, in particular, was wholly undermined by the subsequent testimony of Ms. Chambers and Mr. Morse.
[92] Mr. Mierins agreed that Mr. Morse was obliged to conduct weekly inventories of cars on the Plaintiffs’ lots, and that accounting staff were to undertake physical inventory of the vehicles “every couple of months”, updated by the sale of vehicles.
[93] He testified, on the one hand, that he would not have agreed to allow Khalife to take the vehicles off the lot to sell to others, but on the other hand, stated that dealers could “borrow” cars and return them later.
[94] Mr. Mierins claimed to be unaware that Mr. Morse let Khalife “borrow” cars for up to two months, and only learned “in the aftermath” that Mr. Morse felt authorized to do so because he retained ownership documents for consigned vehicles. After events came to light, Mr. Mierins agreed that only three of the seven ownerships for consigned vehicles could be found, and they were not stored where they should have been.
[95] From the evidence of Mr. Mierins, I concluded that oversight measures in the business operations of the corporate Plaintiffs rested heavily on the exercise of due diligence by Ms. Chambers and Mr. Morse, as well as the accounting staff.
[96] The evidence from Ms. Chambers and Mr. Morse conflicted with that of Mr. Mierins in key areas, and in particular, in relation to the consignment vehicles.
Andrea Chambers
[97] Ms. Chambers gave evidence that she and Khalife began to date in 2010, and co-habited as common-law spouses from November 2011 for over a year before his wrongdoing came to light on June 7, 2013.
[98] Khalife bought cars from the Plaintiffs between October 2012 and January 2013, when he worked at Nicky’s Auto Sales. He then worked out of Amana Motors before advising her that he planned to open his own business with Yassine Jabbar, selling cars to an uncle and cousin in Lebanon. She knew Khalife planned to open the business under the name of Autologic.
[99] She acknowledged that Khalife had trouble maintaining long-term occupation in that he changed business operations three times in under a year.
[100] Although Ms. Chambers claimed that, because of their relationship, she paid more attention to the Plaintiffs’ transactions with Khalife, and initially even kept his personal cheque book in her office in January and February 2013, she admitted she then “relaxed” and let Mr. Morse handle dealings with Khalife.
[101] She claimed to have learned only after the scam came to light that Mr. Morse consigned vehicles to Khalife; she testified that this was against company policy and against her explicit instructions to Mr. Morse purportedly provided in the presence of Mr. Morse’s co-worker, Tim Whalen, in January 2013.
[102] Ms. Chambers met Mr. Morse weekly to “review vehicle inventories” and used car profits. A physical inventory was to be done monthly by accounting staff member, Elisa Salvi, who reported to her, and not every couple of months as Mr. Mierins attested. Ms. Chambers herself did not inventory cars on the lot.
[103] Ms. Chambers’ evidence was also at odds with Mr. Mierins in that she testified that there was no company policy for payment of wholesale vehicles by certified cheque. Moreover, she knew that Khalife did not pay by certified cheques.
[104] Ms. Chambers could not be exact as to when she asked Mr. Morse to get certified cheques from Khalife, but estimated that this was after one of Khalife’s cheques was returned for non-sufficient funds (NSF) in the latter half of May 2013.
[105] Despite the wisdom of doing so, it was evident that Ms. Chambers did not request certified cheques from Khalife even after she admitted Khalife bounced cheques on two occasions before his cheques were returned NSF on June 6, 2013. She recalled that he bounced a cheque in March 2013, while she was away on a Land Rover trip. She admitted a second occasion in May 2013 when a very sizeable cheque in the amount of $161,312.00 returned NSF and was covered by a replacement cheque (Exhibit 6, Tab 56).
[106] Ms. Chambers also agreed that on at least one to two occasions, she permitted Khalife’s cheques to be held while his uncle’s cheques, in payment of some of the Plaintiffs’ vehicles allegedly intended for shipment to Lebanon, cleared.
[107] Ms. Chambers not only relaxed the rules with respect to payment to accommodate Khalife’s purchase of vehicles, she also had no explanation for certain irregularities in bills of sale, of which she had actual notice. She had no explanation for why a bill of sale dated April 8, 2013, between Amana Motors and Import Auto featured her handwriting in parts of the bill of sale. She could not account for the fact that, in reference to the buyer details, “Nicky’s Auto” was scratched out and replaced with Amana Motors. She acknowledged the payment details confirmed payment by cheque dated April 22, 2013, issued well after the date of the bill of sale, and after the vehicle was already delivered to Khalife for Amana Motors, as appears from handwriting that she acknowledged looked to be that of Khalife’s (Exhibit 1, Tab 53A and Exhibit 6, Tab 53).
[108] Ms. Chambers agreed that a cheque dated May 24, 2013, written by Khalife on behalf of Autologic to St. Laurent for the purchase of three vehicles was neither a bank draft, as required for a retail purchase, nor a certified cheque. She also acknowledged that is was not deposited by the corporate Plaintiffs until June 3, 2013. She testified that Mr. Morse told her, after the fact, that Khalife asked him to hold cheques after the cars had left the lot. Another cheque for $60,909 was written by Khalife in May 2013 for a purchase of another three vehicles and was also held by Mr. Morse (Exhibit 2, Tab 71).
[109] She admitted that she, herself, gave instructions to Debbie Fisher in accounting to hold Khalife’s cheques on one or two occasions.
[110] In respect of the safe keeping of vehicle ownerships and keys, Ms. Chambers agreed that Mr. Morse had care and custody of vehicle ownerships, which were stored in files in his office.
[111] She further testified that car keys were stored in lock-boxes, that sales personnel had keys to the lock-boxes, and that she and Mr. Morse also had master keys to the lock-boxes.
[112] Although Ms. Chambers was aware of a large number of purchase agreements with Khalife between January and March 2013, and believed most of these were through Amana Motors; she never asked Khalife if he was a licensed wholesaler with OMVIC, even with his prior association with Nicky’s Auto.
[113] Ms. Chambers was aware that OMVIC rules precluded Khalife from using Amana Motors’ license for transactions he concluded through Autologic.
[114] She received “stacks of files” at months’ end but did not review the bills of sale with any detail. If Khalife or Amana Motors were on the bills of sale, she paid more attention to the sales figures, and the number of sales over a five to six-month period.
[115] Ms. Chambers’ evidence was at odds with that of Mr. Mierins, in that she would not agree that the prices Khalife paid as set by Mr. Morse were high. In fact, she felt that the Plaintiffs lost money on some cars.
[116] It was evident that Ms. Chambers focused her review of sales transactions to statements of profit and loss, rather than upon irregularities and any non-compliance with OMVIC rules in respect of bills of sale.
[117] Ms. Chambers did not personally verify wholesalers’ OMVIC licenses, as the Used Car Manager dealt with licensing. She believed Khalife was getting his paperwork for Autologic and let Mr. Morse handle these details.
[118] Ms. Chambers was aware of purchase transactions with Amana Motors, and of Khalife’s friendship with Yassine Jabbar, who came to their home to pick up paperwork for the sale of vehicles off their lots. She also picked Khalife up from Amana Motors from time-to-time, but she made no inquiries as to their business dealings.
[119] Ms. Chambers stated that, although there was no set limit on the number of retail sales, 12 retail sales transactions concluded with Khalife should have been questioned. Yet, there was no such oversight in Khalife’s case.
[120] Ms. Chambers confirmed that Mr. Morse was responsible for signing the back of ownerships to give to a wholesaler, who then obtained a new ownership from the Ministry of Transportation.
[121] Ms. Chambers confirmed that she, herself, had never seen Sami Abi Khaled look at cars on their lots, but I infer that this was still within the realm of possibility.
[122] Ms. Chambers at no time saw Sami Abi Khaled at her home with Khalife and/or Jabbar to suggest any knowledge or complicity on the part of Sami Abi Khaled as to Khalife and Jabbar’s operations.
[123] When asked further about the number of times she encountered Sami Abi Khaled in the company of Khalife, she was unable to refute the proposition that she had seen Mr. Khaled on two more occasions before June 7, 2013, when Khaled came looking for Khalife after his cheques for purchase of vehicles from Sami’s bounced, and on June 10 or 11, 2013, when Khaled returned to deliver up vehicles in his possession which were not on their bailiffs’ list. On the other hand, she categorically denied an occasion in May 2013, when it was put to her that she pointed to Volvos on their lot and was alleged to have told Khalife to sell or “move these vehicles” while he was in the company of Khaled. Initially, she did not recall picking up Khalife at Sami’s and asking if he was happy with his purchases from the corporate Plaintiffs, but later emphatically denied this took place.
[124] Elisa Salvi failed to tell her that the OMVIC license for the buyer in a number of bills of sales involving Amana Motors did not match the buyer on cheques for payment issued by Khalife or Autologic, contrary to OMVIC rules.
[125] Notwithstanding the apparent system failures under her watch and the lack of oversight measures vis-à-vis Khalife, Ms. Chambers persisted in suggesting she told Mr. Morse not to let Khalife “offsite with their units” because she had herself observed one of their cars on Nicky’s Autos lot before Christmas of 2012. It appeared to me self-serving to hear her suggest she wanted the rules “spelled out and then some.”
[126] She admitted that she assumed that Sami Abi Khaled was involved in some wrongdoing because on June 11 or 12, 2013, in brief discussion about all of the events, she asked him what was going on and vividly recalled him saying “you know what was going on.” Leaving aside that this statement, had it been admitted by Mr. Khaled, could well have suggested that Mr. Khaled thought she was complicit in the scam. She agreed that when Khalife admitted to wrongdoing, he said that he never meant to hurt her companies, but to hurt Sami at Sami’s Garage and Assaad at Import Motors. She held to her belief, nonetheless, that Mr. Khaled was in on the scam because it was her conclusion Khalife sold the vehicles under value to Sami’s, and that Mr. Khaled should have been aware of this.
[127] Quite apart from the fact that Ms. Chambers played no part in the pricing of the 23 vehicles, she did not run car proofs or lien searches that could have affected the price of vehicles. In addition, there was other evidence regarding the fair market value of vehicles that would lay question to her assumptions.
Chris Morse
[128] Chris Morse’ evidence materially undermined the evidence I received from Mr. Mierins and Ms. Chambers in key areas.
[129] While Mr. Morse testified to being medicated for treatment of anxiety and depression, which may account for the fact that his memory as to specific details left much to be desired, I was satisfied that, where it came to matters of Khalife receiving preferential treatment as wholesaler of the Plaintiffs’ vehicles, his evidence could be accepted.
[130] He testified that, before he was hired on as Used Car Manager by the Plaintiff corporations, Khalife was already purchasing vehicles from the Plaintiffs. After he was hired, Khalife bought “quite a few cars” under the name of Amana Motors in January 2013, although he had no clear memory of 40 such vehicles being purchased by Khalife or on behalf of Amana Motors or Autologic, by or before a scam came to light.
[131] Mr. Morse described the steps he took in the sale of consignment vehicles to Khalife. He was responsible for pricing the vehicles and trade-ins. He and Khalife would agree on a price for vehicles on the lot. They would then draw up a bill of sale. He would subsequently give the vehicles to Khalife to show to buyers off the lot, but would keep the ownerships for the vehicles. When Khalife returned with payment at the agreed upon price, in the majority of cases, Mr. Morse would sign over the ownership to Khalife and let him go to the License Bureau to acquire a new ownership for the buyer.
[132] Mr. Morse understood that, while vehicle ownerships were in his possession or control, Khalife had not yet transferred title for the vehicles to third parties. He could not explain, however, why a number of wholesale bills of sale, and the Used Car Dealers Association of Ontario (“UCDA”) Ontario Vehicle History Searches reflected that ownership on a number of the Plaintiffs’ vehicles transferred to Amana Motors and then to Sami’s, either the same day or days before Mr. Morse completed the a bill of sale with Khalife on behalf of Amana Motors or Autologic. He was also unable to explain why vehicle mileage went up and down in the transfer of ownership (Exhibit 1, Tabs 13A, 13B, 14A, 14B, 15A, 15B, 16A, 16B, 17A, 17B, 18A, and 18B).
[133] Mr. Morse agreed that, in the search for vehicle ownerships for missing or consigned vehicles after the scam was uncovered, he found one original ownership for a consigned vehicle (Exhibit 8).
[134] He denied signing over the back of ownerships for the consigned vehicles to Khalife, and denied authorizing Khalife, Autologic, or others to sell the vehicles before a sale had been concluded between the Plaintiffs companies and Khalife on behalf of Amana Motors or Autologic.
[135] It was clear Mr. Morse had no good understanding of the businesses with which Khalife was associated, although he listed among his responsibilities as Used Car Manager, the duty to verify the buyer. He assumed that Khalife was owner of Amana Motors and had never met Jabbar, when Khalife purchased his first “batch” of vehicles. Mr. Morse wrongly assumed, until documentation to the contrary was put before him, that Khalife used any other names to buy from Import Auto (Exhibit 1, Tab 24A, Tab1A, B, and C).
[136] Because Mr. Morse had been told that Khalife “bragged” to Ms. Chambers about the number of cars he had sold on behalf of the Plaintiff corporations, both he and Ms. Chambers knew that Khalife had taken cars off their lots to show to buyers. Indeed, he observed that the Plaintiff corporations were not doing well in the used car business before Mr. Morse was hired.
[137] Mr. Morse testified that his salesmen would take deposits from Khalife, whereupon vehicles were given to him. He confirmed that the vehicles were not on the lot when he signed over a bill of sale. His evidence was contradictory about steps taken in the sale of vehicles to Khalife.
[138] Indicative of the preferential treatment given to Khalife, he agreed that when vehicles were not available to Khalife for purchase by way of wholesale agreement, he would sell them to Khalife by retail bill of sale (Exhibit 2, Tab 5A, 6A, 7A and 8A).
[139] He agreed that Khalife was not a retail customer, but for the retail sales, Khalife was treated like a wholesaler. Mr. Morse was not concerned about giving preferential treatment to Khalife, because he was Ms. Chambers’ boyfriend and he knew who Khalife was. He also discussed the retail sales with Ms. Chambers.
[140] Mr. Morse agreed that, at the time of the launch of the new Jaguars in May 2013, cars had to be cleared from the lot to accommodate a display as well as customer vehicles. He confirmed that Khalife helped them move cars off the lot, but he could not recall which ones.
[141] In cross-examination, he admitted that Khalife bought some cars wholesale through Automondiale and that others were purchased by direct negotiations with Khalife on the lot, contrary to corporate policy as well as the rationale for the creation of Automondiale, as described by Mr. Mierins. Mr. Morse even added that other wholesalers bought cars off their lot, and he did not know why they should not permit this.
[142] Mr. Morse admitted that, in two statements provided to police after the scam came to light, he never addressed his history of dealings with Khalife, but only addressed the missing or stolen vehicles. He could not say why he failed to tell police about cars taken off the Plaintiffs’ lots, which were consigned to Khalife, other than to admit that he was concerned that his own involvement in the matter was very wrong and feared that he would be criminally charged. In my opinion, he had a motive to minimize the extent of the loss of the vehicles.
[143] Mr. Morse agreed, that in a Memorandum of Facts dated October 7, 2015, after he met with Plaintiffs’ counsel, he referred to only five cars as opposed to seven “consignment” vehicles (Exhibit K).
[144] Although Mr. Morse admitted his memory of event would be fresher closer to the date of events, he could not explain why a Will-Say statement prepared by counsel three to four weeks before trial referred to seven as opposed to five consigned vehicles (Exhibit L).
[145] With respect to policies and procedures in place at the Plaintiffs’ premises, including supervision by Ms. Chambers, he confirmed that he could buy and sell cars without consulting anyone.
[146] He denied Ms. Chambers ever discussed with him the details of taking vehicles inventories.
[147] Other than initially after being hired, when Ms. Chambers assisted in the pricing of cars, he alone did the pricing.
[148] He also agreed that his position with the Plaintiff corporations put him in a position of trust.
[149] Mr. Morse claimed that he had no authority to hold Khalife’s cheques, though he was never asked to do so and never did. Only Ms. Chambers and Mr. Mierins had authority to instruct accounting to hold cheques.
[150] Mr. Morse was clear that the Plaintiff corporations had no policy requiring that wholesale vehicles be paid by certified cheques. Moreover, he confirmed Ms. Chambers was aware that none of Khalife’s cheques were certified. Only after the last cheque was taken from Khalife, was he told to obtain certified cheques.
[151] Despite listing among his responsibilities the duty to verify buyers, he did not check whether Khalife was a licensed wholesaler. This was because Khalife was already buying from the Plaintiff corporations when he was hired on and he had no prior dealings with Khalife. Ms. Chambers told him that Khalife was a wholesaler or owner of Amana and that, before Amana Motors, Khalife was licensed at Nicky’s Autos. Mr. Morse added that Ms. Chambers told him that Khalife was her boyfriend and that he could do business with Khalife. Finally, she encouraged him to do business with Khalife because “he was very good at moving cars.” Most notably, Mr. Morse saw Khalife at weekly auctions at Adesa Auctions in Vars, and he knew that, in order to enter an auction, a person had to have a “bid badge” and to be a registered dealer or salesman. In addition, to be registered with Automondiale, Khalife had to send in his credentials to Phil Evans at Bytech Motors who managed Automondiale. Mr. Morse would not have received Khalife’s username and password to verify his credentials on Automondiale.
[152] I was satisfied that Mr. Morse told the truth in stating that Ms. Chambers never told him to be careful when doing business with Khalife.
[153] Mr. Morse testified to a general lack of secured storage of ownerships and car keys at the Plaintiffs’ dealerships. His credenza, where he kept used car ownerships and a second set of keys, was not locked. Despite a policy to keep the other set of keys for new and used vehicles in lock boxes in the lunchroom, he admitted that the salesman often left the lock boxes open, despite his instructions to the contrary. Most importantly, Mr. Morse gave Khalife a set of keys when he took the consigned vehicles off the lot.
[154] Mr. Morse agreed that each car was given a stock identification number, which was on each file in his office, and on the key tags in the lock boxes, along with the year, make, model and the last six numbers on the VIN. He said it would be easy for a thief to figure out their system, even if unfamiliar with the stock number.
[155] In reference to the office layout that Mr. Morse depicted in a diagram (Exhibit 7), he noted that his office remained opened during the day and could be used by people as a shortcut to go back and forth between showrooms, and out the back door. Ms. Chambers would not be able to see inside his office from her office. Most importantly, Khalife was regularly at their premises, if not there daily. It is apparent that he had free reign in his ability to move about the Plaintiffs’ dealership and lot.
[156] For each sale concluded on Automondiale, Mr. Morse received an email with the name of the buyer and other purchase details from which he prepared a bill of sale. The buyer was supposed to sign the bill of sale and was to be present when the agreement was executed. The one who signed the agreement had to be the buyer identified in the emails. Payment was expected when the bill of sale was signed. He then delivered the cheque and payment to accounting. If cheques were held, he was never told or made aware of it.
[157] Mr. Morse offered the major concession that, it was the usual and normal practice to let Khalife take the cars off the lot without ownerships to sell to third party buyers and that this happened several times for consigned vehicles. He continued to consign other vehicles to Khalife, after others were off the lot with payment outstanding, noting that sometimes Khalife was able to sell them “in a package.”
[158] Mr. Morse never anticipated a problem with this practice because Khalife was living with Ms. Chambers, selling cars for them, and paying for them.
[159] He acknowledged that it would not be apparent to him if someone gained access to car files, keys, and ownerships inside his office, given the volume of car files, the numbers of which varied between 30 and 75 at any one point.
[160] For each car he sold to Khalife, Mr. Morse signed the back of the ownership, and could not remember if he entered the odometer reading when he did so.
[161] Mr. Morse described his approach in setting the price on any one vehicle. He would consider the Adesa Market Guide, which set out the last price paid for a vehicle, along with its year, make, model, and mileage. However, price varied if a vehicle had mechanical deficiencies, was involved in a car accident, and if it had a higher mileage on it.
[162] Khalife either bought wholesale vehicles by pushing the “buy now” button if he bought through Automondiale, or he would negotiate directly with Mr. Morse. Either way, Mr. Morse would try to “get the better of him to pay the set price.”
[163] Mr. Morse denied that there were any issues with setting prices high with Khalife. He noted they were high at times, but that he did not hit “homeruns” on all of his sales. He conceded that his main concern was to make commissions. He aimed for a salary around $80,000, his salary being comprised of $25,000 base pay plus commissions on gross sales.
[164] Mr. Morse said both Ms. Chambers and Mr. Mierins reviewed sales with Khalife on Automondiale and never questioned him about prices Khalife was paying.
[165] Mr. Morse admitted that he failed to meet his responsibility to scrutinize the paperwork and bills of sales and transactions with Khalife. It was clear that, despite OMVIC rules requiring a buyer to sign a bill of sale and pay for the vehicle, he did not ensure this happened when cars were sold to Amana Motors but were paid by Khalife personally. He agreed that he would fill out the seller information on the bill of sale and did not even recognize the handwriting on behalf of Autologic (Exhibit 1, Tab 1A, 29A, and 32A; Exhibit 6, Tabs 28 and 29).
[166] Most importantly, and contrary to the stated expectations of Mr. Mierins and Ms. Chambers, Mr. Morse did not carry out a single vehicle inventory in the months he worked for the Plaintiff corporations, aside from one at the very outset of employment.
[167] Contrary to his Will-Say statement (Exhibit M), which suggested Mr. Morse kept track of vehicles, he did so only to the extent that cars were on the lot, available for sale and well presented.
[168] In the six months he worked for the Plaintiff corporations, Mr. Morse stated that no physical inventory of vehicles was ever done by accounting staff, contrary to the stated expectations of Mr. Mierins and Ms. Chambers. Mr. Morse agreed that he received a weekly inventory list updated by accounting staff when cars were sold. However, he never verified that the vehicles consigned to Khalife, and which would have remained on the inventory list, were ever returned to the lot.
[169] Mr. Morse admitted that he did not put a date on the bill of sale for consigned vehicles because they were not yet sold, and he had no idea until Khalife returned if the vehicles were sold. A bill of sale was only dated when Khalife eventually returned with payment.
[170] Mr. Morse did not show other wholesalers the same level of trust shown to Khalife. He testified that, had he been told by Ms. Chambers in January 2013 to not allow wholesalers, especially Khalife, to remove vehicles off their lot, he would not have done so.
[171] The Plaintiffs did not call Tim Whalen to resolve the conflict in the testimony of Ms. Chambers and Mr. Morse on this issue.
[172] From the testimony of Mr. Morse, I conclude there was a:
• lack of oversight in respect of the corporate Plaintiffs’ dealings with Khalife, by reason of a departure from company policy in place to ensure that wholesalers and in particular Khalife, did not exert undue influence upon sales management;
• lack of compliance with OMVIC rules and/or sound business practices in respect of buyer licensing verification, insurance and other information;
• lack of reconciliation of buyer and payer details;
• lack of vehicle inventories;
• lack of secured storage of keys and vehicle ownerships at the dealerships;
• lack of timely deposit of cheques; and
• lack of certified payment or bank drafts for wholesale and retail purchases respectively.
[173] This was a “perfect storm” waiting to happen. Any number of these steps, taken in precaution vis-à-vis Khalife and Jabbar could have prevented or uncovered their wrongdoing on a timelier basis before third party buyers without notice became embroiled.
Mark Weisbrod
[174] The current General Manager of the Plaintiff corporations, Mark Weisbrod (Mr. Weisbrod”), was called to testify in order to shed light on access to licensing information and to clarify the methods by which ownership of vehicles may be transferred.
[175] To determine if a car dealer or wholesaler is licensed, one can simply do an electronic search on the OMVIC website at omvic.on.ca.
[176] Mr. Weisbrod testified that, in the ordinary course, a transfer of ownership would be effected with the signature of the seller, mileage on the vehicle at the date of transfer and the signature of the buyer. It would then be taken to Service Ontario to obtain a fresh ownership from the Ministry of Transportation in the name of the buyer. This ownership would not show the vehicle mileage.
[177] Mr. Weisbrod was referred to the transfers in ownership of one of the consigned vehicles (Exhibit 1, Tab 15A). It reflected a transfer of ownership by Import Auto to Amana Motors followed by a transfer to Sami’s Garage; a transfer to Import Motors; and a transfer to O’Neil Motors, all on the same day, on May 3, 2013. These were followed by a final transfer to Collins Family Cars on May 8, 2013. He confirmed that multiple transfers on the same day were not impossible. The License Bureau would not check a seller’s signature to verify that the person is an authorized representative of the seller, or the buyer. Therefore, if someone wished to forge a transfer on behalf of Import Auto, the vehicle could be transferred to Amana Motors using a “sticky back” (Exhibit 12). In turn, a signature forged by or on behalf of Amana Motors could also effect a transfer of ownership from Amana Motors to Sami’s Garage using a “sticky back.”
[178] Alternatively, if someone had improperly taken possession of an ownership, if was possible to obtain a replacement ownership by using the vehicle VIN number, and by supplying a forged proxy from the current owner to obtain a replacement. The license bureau does not check for forged proxies either. Moreover, without the need for a letter of proxy, a fraudster could forge a signature on a bill of sale, or using even a photocopy of the bill of sale, obtain a replacement using a long-form vehicle registration to transfer the vehicle to another dealership. Using the RIN number for Amana Motors, even without a bill of sale and a “sticky back”, Khalife could have obtained a transfer of ownership in the name of Sami’s Garage.
[179] In reference to consigned vehicles number 16 and 17, Mr. Weisbrod observed that it was unusual to have multiple transfers in one day, but with the current licensing registration system, it is possible to effect two ownership transfers and replacement of the license for a fresh ownership in the name of Sami’s Garage all in the same day. This ownership would look like Exhibit 8, without the name of the previous owner on it and without an odometer reading on it.
[180] It is a dealer’s responsibility to ensure forgery does not happen.
[181] Also of significance was Mr. Weisbrod’s evidence that a wholesale buyer could rely on a lien search letter, which was often provided to a wholesaler by the dealership because it can take months to remove a PPSA registration against the title of a vehicle. It was not suggested by Mr. Weisbrod that the wholesaler could only act upon an original copy of the lien release letter.
[182] I take from Mr. Weisbrod’s evidence that it was not particularly difficult for Khalife or Khalife in concert with Jabbar, to provide Sami’s with a fresh ownership that would not reflect the previous ownership by Amana Motors, and by the corporate Plaintiffs before Amana Motors.
Sami Abi Khaled
[183] Mr. Khaled is the principal and directing mind of Sami’s, which has been in business for over 30 years. He has had his own dealer’s license on behalf of Sami’s Auto Sales, a division of Sami’s Garage, since 1993 and has never been disciplined by OMVIC. Ninety percent of his business is in the purchase and sale of wholesale vehicles, and the rest is in retail sales and purchases.
[184] Mr. Khaled does not have a criminal record. He cooperated with the police investigation in relation to the Plaintiffs’ missing/stolen vehicles and was not charged with any wrongdoing.
[185] Mr. Khaled had no prior association with John Mierins, Andrea Chambers, Chris Morse, or Yassine Jabbar before the subject lawsuit.
[186] He met Khalife in 2011, when Khalife’s father operated a mechanics’ garage in the same complex where Sami’s is located on Belfast Road in Ottawa.
[187] He was also approached by Khalife at the Adesa Auction and told that Khalife’s girlfriend was the general manager at the Plaintiff corporations and wanted to sell cars to Khalife. As a wholesaler, Sami’s was unable to buy vehicles directly from the Plaintiff corporations. Khalife was only 1 of 15 wholesalers with whom he did business.
[188] Like Mr. Morse, Mr. Khaled never checked to see if Khalife was a licensed dealer, but assumed he had a license because Khalife needed one in order to attend the auction.
[189] He explained how deals were transacted with Khalife: Khalife would bring him cars, after they agreed on a price; Khalife would complete the seller’s information on a bill of sale and Mr. Khaled would fill out the buyer’s information and date the agreement the same day he provided payment by cheque drawn on Sami’s bank account. Khalife would provide him with a fresh ownership the next day or up to a week or so later. The back of the ownership would always be blank. He would get no information about prior ownership or odometer readings. It was his experience that the ownership exemplified by Exhibit 18 is what he got when a dealer “flipped the car.” When he sold the vehicle, he then put his dealer number on the ownership, signed it and inserted an odometer reading on the back.
[190] Mr. Khaled did not do a UCDA Vehicle History Search when he bought vehicles. He did not know Jabbar or others at Amana Motors in 2013. However, he asked Khalife why his seller’s name changed to Autologic in February 2013 and was told that he had opened the company.
[191] Mr. Khaled priced vehicles before he purchased them drawing upon his experience in relation to cheaper vehicles valued at $10,000 to $15,000. For more expensive vehicles, he would consult the auction guide, or speak with other wholesalers including Assaad Dargham at Import Motors, with whom he did half his business in 2013. He would also consult with his cousin, Wassim Abi Khaled at Holdin Leasing and others to set a fair market value price on the wholesale and retail vehicles. This was confirmed by the Will-Say statements in Exhibits 20 and 21. Mr. Khaled also considered car proofs for information on the vehicle history, noting that if it had been in a motor vehicle accident or had mechanical problems, required new parts or service, this also affected price. He followed the same pricing practices when he did business with Khalife in 2013.
[192] Mr. Khaled had a good memory of how he priced a number of the 23 vehicles he purchased from Khalife, and gave detailed testimony about the information he obtained from car proofs and the auction before pricing the vehicles (Exhibit 1, Tab 3C; Exhibit 6, Tab 3; Exhibit, Tab 4D, 5C, 6C, 7C, 8C).
[193] Specifically with respect to consigned vehicle number 15, Khalife gave him a lien release letter dated May 7, 2013, authored by Debbie Fisher, the credit manager at Import Auto (Exhibit 1, Tab 15E), before he sold the vehicle to Import Motors on May 21, 2013 (Exhibit 6, Tab 15).
[194] With respect to consigned vehicle number 18, he learned after selling the vehicle to his cousin at Holdin Leasing on May 25, 2013, (Exhibit 6, Tab 18) that a lien release letter dated May 21, 2013, authored by Elisa Salvi, assistant controller at Import Auto, had been found in the vehicle glove compartment (Exhibit 1, Tab 18D).
[195] Consistent with the evidence of Mr. Weisbrod, he said that after he purchased a vehicle from another wholesale dealer, he expected a lien to be paid off, and would just ask for a lien release letter rather than wait for the PPSA registration to be lifted.
[196] Mr. Khaled explained that, for each of the 23 vehicles he bought from Khalife, he got a bill of sale and a fresh ownership, although he acknowledged that some dealers he worked with just signed the back of the ownership and gave it to him. However, when he purchased from an auction, he also received a fresh ownership with nothing but Sami’s Garage appearing on the front of it. As such, when a bailiff came to his business location on June 10 or 11, 2013, with a list of vehicles claimed to be the property of the Plaintiff corporations, he took the position that he had a bill of sale and ownership for each vehicle and had already sold all but one, a Mercedes C250. On the other hand, he returned to St. Laurent three vehicles that were delivered to him after attending at the St. Laurent car lot with Khalife on the occasion when he heard Ms. Chambers tell Khalife she wanted “to move” five cars. He agreed to buy them for $125,000. Khalife only delivered three of the vehicles. Mr. Khaled obtained a bill of sale for each of them and gave Khalife a cheque for $125,000 dated May 30, 2013, representing payment for all five vehicles. To protect himself until delivery of the remaining two vehicles, he wrote the word “loan” on the cheque (Exhibit 1, Tab 67).
[197] He was subsequently told by Khalife that the dealer decided not to sell, and Khalife wrote a cheque to Sami’s for $125,000 on June 5, 2013 (Exhibit 6, Tab 70). It is for this reason that he returned the 3 vehicles including a 2003 Porsche Boxter, a 2011 Land Rover, and a 2005 Nissan Pathfinder (Exhibit 1, Tab 68) to the bailiff on June 10 or 11, 2013.
[198] Khalife’s cheque for $125,000 was subsequently returned NSF along with a series of five other cheques written by Khalife on behalf of Autologic totalling $263, 076.50 (Exhibit 6, Tab 71).
[199] Mr. Khaled explained how a similar occurrence took place on an earlier occasion, when he attended the Hull Nissan dealership, another Mierins company, to look at some vehicles with Khalife. Sami’s issued a cheque to Autologic for the purchase of two vehicles in the amount of $67,000 on May 16, 2013. On this occasion, he also wrote the word “loan” on the cheque. After doing so, he learned from Khalife that the dealership decided not to sell and Khalife returned the $67,000 (Exhibit 1, Tab 67). He maintained that he wrote the word “loan” on the cheque not to loan money to Khalife to buy the vehicles from the Hull Nissan, but to protect himself because the vehicles had yet to be delivered to him.
[200] Mr. Khaled recalled three occasions on which he encountered Ms. Chambers. On one occasion, she pointed out some cars, including Volvo’s and Jaguars at the same time as she told Khalife she wanted them “moved” off the lot. Mr. Khaled was there with Khalife, but did not speak with Ms. Chambers. On another occasion, she picked up Khalife from Sami’s on Belfast Road and asked Mr. Khaled if he was pleased doing business with Khalife and Autologic. On a third occasion, after Khalife’s cheques bounced on June 6 or 7, 2013, and he could not reach Khalife by phone, he went to St. Laurent and asked Ms. Chambers where Khalife was. She told him she did not know. He left upset because he had lost over $300,000 in bounced cheques from Khalife.
[201] Mr. Khaled was emphatic that he never had a conversation with Ms. Chambers on June 10 or 11, 2013, when he, his brother and an elderly employee returned three cars to St. Laurent. He denied having said to her that “Dimitri said you knew what was going on.”
[202] Despite vigorous cross-examination, Mr. Khaled denied that he bought stolen vehicles from Khalife. He also refuted the suggestion that he knew Khalife was not a man of means who could legally acquire the vehicles he sold to Sami’s. Mr. Khaled maintained the evidence that he put “loan” on a cheque to Autologic for the purchase of five vehicles for $125,000 in order to protect himself, because Khalife had not delivered all five vehicles he had purchased from him.
[203] When he purchased a 2013 XC60 from Autologic (Exhibit 1, Tab 21B), Mr. Khaled was unaware it was stolen and in fact sold it to his own cousin at Holdin Leasing before this came to light.
[204] He maintained that he never saw an ownership from Jabbar or Amana Motors for any of the 23 vehicles he purchased from Khalife.
[205] He did not know Autologic was unlicensed and assumed otherwise when he saw Khalife at auctions.
[206] He did not use a computer nor did anyone in his office in order to carry out UCDA license searches.
[207] Mr. Khaled never knew what amount Khalife paid for vehicles that he sold to Sami’s and never asked him. This was not something wholesalers did. He priced his purchases as he had always done in the 30 years he had been in business. He only learned after the fact from the Plaintiffs’ Damages Chart (Exhibit 14) what Khalife paid to the corporate Plaintiffs, and expressed the view that Khalife paid “ridiculous” prices. He had no idea why Khalife would sell to Sami’s at a loss.
[208] He denied knowing whether Khalife used “sticky backs” to procure fresh ownerships for the vehicles in the name of Sami’s.
[209] He could not say if there was an original for the lien release letter from Elisa Salvi dated May 21, 2013, (Exhibit 1, Tab 18D) as it was found in the glove compartment of a vehicle he sold to Holdin Leasing. He offered no admission that it was a forgery, as suggested to him in repeated questioning under cross-examination.
[210] Mr. Khaled was cross-examined as to his attempt to sell a 2006 Land Rover purchased from Autologic at the Adesa Auction in Vars on May 30, 2013. It was put to him in cross-examination that the vehicle was returned because he failed to present good title for it, as reflected by the “purple light” for absent title on the bill of sale. His evidence went unchallenged that, at an auction, a wholesaler could provide title documents after a vehicle was sold and up to a week later. He noted that the buyer had a set time to return a vehicle after an auction, and that this particular vehicle was not returned for absence of title but because it had a suspension problem, which he addressed before selling it at another Adesa auction in Toronto.
[211] I infer that it would make no sense to refer to different “lights” pertaining to title on an auctions’ bill of sale, unless there was a practice in the industry as described by Mr. Khaled. Mr. Khaled added that he did not return any monies to anyone for this vehicle, and sold it with good title acquired from Khalife after June 4, 2013.
[212] Mr. Khaled agreed that in Exhibit 1, Tab 67, he wrote a cheque to Autologic for $113,565 on May 22, 2014, for the purchase of cars. He never received three of them and returned these three vehicles. He did not produce a bill of sale for any of them, because he threw them out after he returned the vehicles.
[213] Mr. Khaled agreed that he had been defrauded but refused to admit the Plaintiff corporations had also been defrauded. I infer that his unwillingness or refusal to do so in all likelihood stemmed from the fact that the Plaintiffs maintained their cause of action in conversion against him.
[214] I am satisfied that both the corporate Plaintiffs and Sami’s fell prey to Khalife and Jabbar’s fraudulent scheme. However, on the facts of this case as I find them, acts or omissions on the part of the corporate Plaintiffs or their employees enabled Khalife to effect his fraudulent scheme on them and others.
[215] The preponderance of the evidence persuades me that conditions at the corporate Plaintiffs’ premises were rife for wrongdoing by a thief or thieves. The General Manager divested some of her responsibilities to a used car manager she was supposed to supervise, after only two months at most. Opportunities to investigate apparent irregularities on bills of sales were either ignored or passed over at a time when the Plaintiffs reaped good profits from the business with Khalife.
[216] Although Ms. Chambers suggested that she exercised greater oversight in dealings with Khalife because of her relationship with him, the reality was otherwise. It is certainly understandable how her eyes were obscured by her heart.
[217] I infer that Khalife’s relationship with Ms. Chambers and the “open door” environment allowed him to attend the corporate Plaintiffs’ premises daily and travel unimpeded between Ms. Chambers’ office, Mr. Morse’s office, showrooms, and the back door. The unlocked cabinet in Mr. Morse’s office housing keys and car ownerships afforded Khalife easy access to the indicia of ownership over the vehicles.
[218] The additional trust Khalife garnered because of his relationship with Ms. Chambers allowed him to remove the consigned vehicles off the Plaintiffs’ lot and later afforded him the opportunity to remove vehicles to a secondary lot in early June 2013 to accommodate a Jaguar event.
[219] The lack of inventory of cars by Ms. Chambers, Mr. Morse, and accounting staff all added to the “perfect storm.” Khalife was allowed to operate in a manner inspiring confidence in Mr. Khaled, that he could transact with Khalife without any real concern that he was acting outside the ordinary course of business and his ostensible authority as a mercantile agent and wholesaler in used cars.
[220] Mr. Khaled had no prior business dealings with Khalife. He did not know Jabbar. Ms. Chambers confirmed that he never came to her house to talk business, as Khalife and Jabbar did. He would not have had the benefit of seeing certain irregularities as “red flags” in the agreements of purchase and sale between the Plaintiffs and Khalife.
[221] Sami’s received “clean” ownerships from Khalife, and had no cause to question a transfer in title. Mr. Weisbrod testified that the form in which Mr. Khaled received the ownerships was a common way, if not the only or primary way.
[222] Mr. Khaled “did his homework” and priced the vehicles in accordance with his experience, or after consultation with other wholesale dealers in the case of more expensive cars. He neither considered nor searched for liens on vehicles, before purchase and resale, given the practice confirmed in testimony by Mr. Weisbrod that he could be secure in the knowledge that PPSA leans would take a matter of months to be removed off title, but that wholesale dealers would see to their release and would confirm this in a lien release letter. He acted accordingly when he learned about a lien on vehicle 15; Mr. Khaled asked Khalife to tend to it. I am, therefore, unable to conclude that Mr. Weisbrod’s practice as General Manager to contact the lien holder was essential for a third party wholesaler like Sami’s, although admittedly this is a reasonable thing for a general manager to do on behalf of the Plaintiffs’ dealerships. As for vehicle 18, Mr. Khaled learned of the lien after sale to his cousin, Wassim Abi Khaled at Holdin Leasing, and was told a lien and release letter was subsequently found in the glove box. His evidence to that effect went unchallenged.
[223] I am unpersuaded in the absence of evidence to the contrary that Mr. Khaled would have been obliged to obtain an original signature on a lien and release letter from Khalife, although in hindsight, this would have been reasonable and prudent. However, I cannot conclude he was thereby obliged to question Khalife’s ability as a mercantile agent acting in the ordinary of course of business to sell the consigned vehicles to him with good title.
[224] I cannot conclude, as suggested in testimony by Mr. Mierins, that Mr. Khaled was engaged in a “buy high/sell low” arrangement with Khalife. Indeed, neither Ms. Chambers nor Mr. Morse substantiated this evidence.
[225] Although Mr. Khaled’s evidence with regards to two cheques on which he wrote “loan” could raise suspicions that he was aware that he was funding Khalife to buy vehicles before they were sold to him, he offered a plausible explanation that he did so to protect himself when Khalife did not deliver all vehicles promptly after execution of a bill of sale. I cannot conclude that this is something that would put Mr. Khaled on notice that Khalife was in no position to deliver good title at the time of sale, or that Mr. Khaled was wilfully blind to the unlawful operations of Khalife and Jabbar. He further denied ever giving Ms. Chambers the impression he was involved in their schemes, by words or actions on his part. Ms. Chambers as much confirmed she made this assumption simply on the basis of her interpretation of a brief conversation, which Mr. Khaled denied, to the effect that Khalife told Mr. Khaled “she knew what was going on.” This conclusion would as much “tar and feather” her, as it would Mr. Khaled, assuming the statement had been made, but it does not establish that Mr. Khaled was on notice of a defect in title.
[226] There is little doubt that this case tests the limits of a difficult question: which of two innocent parties should bear the loss occasioned by Khalife and Jabbar? I find that the law, as it stands, by reason of s. 22(a) of the Sale of Goods Act, s. 25(4) of the Sale of Goods Act, and s. 2(1) of the Factors Act, establishes that the party who chose to deliver his goods to the mercantile agent bears the loss.
[227] As such, I conclude that Sami’s acquired good title to the consigned vehicles and would dismiss the corporate Plaintiffs’ claims in respect of this group of vehicles.
What is the measure of damages for the consignment vehicles?
[228] Should I be found to be in error, I go on to consider the measure of damages associated with a finding that Sami’s and Sami Abi Khaled are jointly and severally liable, together with the other Defendants, to the corporate Plaintiffs for wrongful conversion of the consigned vehicles.
[229] On behalf of Sami’s and Mr. Khaled, it is argued that amounts claimed for the consignment vehicles, as well as the stop payment vehicles, have been inflated by the corporate Plaintiffs, and that the Court has no evidence as to how the amounts are arrived at, nor how much the Plaintiffs paid for the vehicles initially.
[230] I disagree. The amounts originally paid for the vehicles would not alone determine their sale price in the market. To deduct from potential proceeds what the Plaintiffs paid for the vehicles initially, or their book value, would effectively subsidize the Defendants’ conversion of the vehicles, should they be found liable.
[231] In his examination in-chief, Mr. Mierins valued the Plaintiffs’ loss for vehicles 12 to 18 in consultation with his general manager at the total amount of $216,231. He explained that the loss was estimated from the sum total of “book” value for each vehicle at an amount something close to the sale price to a third party. This was something he and his employees were well capable of doing and his ability to do so was not laid in question. However, because there had been no “assigned” book value when the vehicles were removed, he reasonably reduced his estimate for the loss of these vehicles to a range of between $180,000 and $190,000.
[232] As the Defendants failed to seriously challenge this valuation in the course of cross-examination, I fix the value for this loss at $180,000.
The Stop Payment Vehicles
[233] The Plaintiffs established, on the strength of evidence provided by Ms. Chambers, that Khalife provided cheques to the corporate Plaintiffs for 11 vehicles with respect to which he subsequently issued stop payment.
[234] Five of the vehicles were sold to Khalife by a wholesale bill of sale containing a standard condition by which a seller purported to bar transfer of the vehicle to the purchaser until the purchase price was fully paid (Exhibit 1, Tab 1A, 2A, 3A, 9A, and 11A).
[235] The Plaintiffs thus argue that a third party purchaser without notice of conditions of sale as between the corporate Plaintiffs and Khalife, and without privity of contract in relation to the stop payment transactions, would not acquire good title through Khalife if payment was dishonoured.
[236] At the same time, the corporate Plaintiffs acknowledge that s. 24 of the Sale of Goods Act, dealing with sales under “voidable title” would permit a buyer to acquire good title so long as:
A seller’s title was not avoided at the time of sale;
So long as the goods were bought in good faith and without notice of the seller’s defective title.
[237] The corporate Plaintiffs take issue with Sami’s reliance upon statutory provisions that would permit Khalife, as a mercantile agent, to transfer title to the stop payment vehicles, and specifically, with reliance upon s. 2(1) of the Factors Act (incorporated by reference only into s. 22 of the Sale of Goods Act). The corporate Plaintiffs note, however, that s. 25(4) of the Sale of Goods Act adopts a similar definition of “mercantile agent” acting in the “customary” course of business.
[238] I have previously found that Khalife meets the definition of mercantile agent acting in the ordinary course of business, and from the evidence tendered, found Sami’s to be a buyer in good faith and without notice of any defect in title, insofar as the consigned vehicles are concerned.
[239] In my opinion, the Sami’s Defendants are on equal, if not stronger, footing where the stop payment vehicles are concerned. I go on, however, to consider the additional submissions offered to the effect that circumstances surrounding sale of these vehicles ought to have raised suspicions, but that Sami Abi Khaled refrained from asking questions and thus remained wilfully blind to the theft and fraud perpetrated by Khalife, or Khalife in concert with Jabbar.
[240] I find the circumstances enumerated by the Plaintiffs do not individually or collectively meet the definition of “wilful blindness” described by the Court of Appeal in Assaad v. Economical Mutual Group (2002), 59 O.R. (3d) 641 (C.A.) where, at para. 19, the Court pronounced that “near negligence, commercial stupidity or unreasonableness will not be sufficient to negative good faith…”
[241] I also find Sami Abi Khaled offered the same explanation provided by Mr. Morse, who along with Ms. Chambers had prior notice of changes to Khalife’s business names, yet relied on the same OMVIC license number throughout. Mr. Khaled, like Mr. Morse, met Khalife at the auction where Khalife would have been precluded from making bids without an OMVIC license. He also understood from questioning Khalife about a change in business name that, like Sami’s Garage operating as Sami’s Auto Sales and Leasing, Khalife could have been “operating as” a business under different names.
[242] Further, I find Mr. Khaled did not act with wilful blindness by failing to contact lien holders to satisfy himself that liens had been removed from title pertaining to the vehicles sold to him by Khalife. Mr. Khaled acted in accordance with the practice in the business described by Mr. Weisbrod: he took comfort in the lien release letters provided by Khalife in relation to the stop payment vehicles.
[243] I find that Sami Abi Khaled had no greater knowledge of Khalife’s financial means than Ms. Chambers or Mr. Morse. Ms. Chambers lived with Khalife, knew him to have some trouble maintaining employment with the same business associates and yet the corporate Plaintiffs did in excess of $1 million dollars in gross sales with Khalife (Exhibit 14). Clearly, the corporate Plaintiffs did not inquire into Khalife’s means while business with Khalife was proceeding at a brisk pace.
[244] Mr. Khaled reasonable viewed Khalife as a mercantile agent, with the unique ability to sell the Plaintiffs’ vehicles given his relationship to Ms. Chambers.
[245] Mr. Khaled offered a plausible explanation for writing “loan” on two cheques for $67,000 and $125,000 (Exhibit 1, Tab 67) because he had not received delivery of all vehicles he had agreed to purchase. While it is true that Mr. Khaled received a cheque dated June 5, 2013, from Autologic for $125,000 (Exhibit 6, Tab 70) while three of the five vehicles that were the subject of the sale remained in his possession, by or before June 7, 2013, Mr. Khaled attended the corporate Plaintiffs’ lot looking for Khalife, as this cheque and others were dishonoured by the bank. At the same time, he offered up return of these vehicles to the corporate Plaintiffs, although they were not on the list of vehicles claimed by the bailiff sent on behalf of the corporate Plaintiffs to Sami’s on June 10 or 11, 2013.
[246] While it is true that Mr. Khaled had met Ms. Chambers twice before any fraud came to light, Mr. Khaled testified that he did not attempt to buy vehicles directly from the corporate Plaintiffs because he knew they did not sell directly to wholesalers. He further believed that Khalife was the authorized conduit for the wholesale of the Plaintiffs’ vehicles. This was not an unreasonable assumption. Mr. Khaled did not ensure he actually obtained good title because he had a bill of sale and Khalife furnished ownerships in the name of Sami’s Garage.
[247] I am not satisfied that Mr. Khaled, in the exercise of due diligence, was obliged to question why Khalife furnished to him fresh ownerships in the name of Sami’s Garage within days or within up to two weeks after purchase of the vehicles, when Mr. Weisbrod testified that this was one of the ways, if not the only or predominant way in which ownerships could be presented to a buyer.
[248] I attach no great significance to the fact that, when asked about Mr. Weisbrod’s evidence in cross-examination, Mr. Khaled smiled in responding that he would not know who would have signed a “sticky back” before he received a fresh ownership from Khalife. Demeanour evidence is to be cautiously received, as it is often unreliable. In my opinion, Mr. Khaled’s smile is no more determinative of mala fides or actual or constructive notice of a defect in title in the sale of vehicles by Khalife to Sami’s, than it was of his appreciation of counsel’s repeated but unsuccessful attempts in vigorous cross-examination to gain an admission to the effect that he was complicit or aware of Khalife’s forged transfers of ownership.
[249] The Plaintiffs suggest that the circumstances of the sale of a Nissan Pathfinder on May 30, 2013, at the Adesa Auction was somehow nefarious, when Sami’s Garage did not receive a fresh ownership in its name until June 4, 2013 (Exhibit 1, Tab 64A).
[250] Mr. Khaled testified, as did Mr. Weisbrod, that it was not beyond reason to receive a fresh ownership days after conclusion of a purchase and sale of a vehicle. Indeed, Mr. Khaled’s evidence went unchallenged that “the purple light” on the Adesa bill of sale was simply to declare the ownership was not at the auction, but would be provided after the sale. It would otherwise make no sense for auctions to contemplate facilitating a sale under the different conditions noted on the auction’s bill of sale (Exhibit 1, Tab 64C). This reasoning is strengthened by reference to the circumstances surrounding the sale of vehicle 1 to Sami’s on April 29, 2013, for which ownership was received May 6, 2013. Exhibit 2, Tab 1 reflects that the vehicle was purchased by YYZ Auto on May 9, 2013, through the Adesa Auction, while ownership passed to YYZ on May 13, 2013.
[251] It is true that Mr. Khaled declined to admit he had purchased cars that were found by police to have been stolen or removed by fraud perpetrated upon the corporate Plaintiffs by Khalife or Khalife in concert with Jabbar, but it was apparent Mr. Khaled did so while maintaining that he had no prior notice of any theft or wrongdoing.
[252] Mr. Khaled could no more explain the purchase and sale by Khalife of 40 of the corporate Plaintiffs’ vehicles at full or asking price than Mr. Mierins or Mr. Morse could, other than to say it was “ridiculous”, and that he had learned what Khalife had paid for them only after the fact. On the other hand, Mr. Khaled, and the Will-Say statements of Michel Akl and Wassim Abi Khaled (Exhibit 20 and 21) offered evidence upon which it may be concluded that Mr. Khaled, on behalf of Sami’s, did his research and consulted others before paying fair market value for vehicles.
[253] This speaks against a “buy high/sell low” scheme alleged by Mr. Mierins.
[254] The purchase by Sami’s of 63 vehicles from Khalife or Khalife’s businesses over the course of five or more months alone would not be an aberrant increase in business volumes such as the Plaintiffs suggest would raise suspicions, when as a low volume dealer, Sami’s sold 50 to 60 cars per month, even accounting for the fact that he did half his business with Assaad Dargham at Import Motors.
[255] The circumstances as enumerated by or behalf of the corporate Plaintiffs do not suggest wilful blindness, or a choice to remain deliberately ignorant in the face of suspicion, had Mr. Khaled admitted to having any vis-à-vis Mr. Khalife.
[256] In sum, I find that the circumstances enumerated do not take sales to Sami’s in relation to the stop payment vehicles outside the contemplation of s. 2(1) of the Factors Act, s. 22 and s. 25(4) of the Sale of Goods Act. The circumstances do not cause me to conclude that Mr. Khaled acted in bad faith or with notice of a defect in title in relation to vehicles 1 to 11. The corporate Plaintiffs’ cause for complaint is valid and real, but it is vis-à-vis the parties who have absconded and did not participate at trial: Khalife and Jabbar.
[257] If I am found to be in error, I go on to assess the Plaintiffs’ loss as against all Defendants, including Sami’s in joint and several liability with Khalife and Jabbar for conversion of the stop payment vehicles.
What is the measure of damages for the stop payment vehicles?
[258] The Defendants Sami’s and Sami Abi Khaled challenge the Plaintiffs’ valuation of the loss on the same basis as they did the claim for the consignment vehicles. However, should it be determined that Sami’s acted in bad faith and with notice of a defect in title, then the Plaintiffs’ loss would be fixed as the sum total of amounts before HST that Khalife agreed to pay to the Plaintiffs for vehicles 1 to 11.
[259] Although a purchase agreement could not be found for vehicle 4, Mr. Morse testified that cheque 21 from Autologic to St. Laurent in the amount of $22,486 (Exhibit 6, Tabs 71) was for the purchase price, including HST of vehicle number 4. The total loss for this vehicle was determined to be $19,900 before GST, which, when added to the purchase price for the other stop payment vehicles, results in a total loss on all of the stop payment vehicles at $208,550.
[260] The corporate Plaintiffs are prepared to provide credit against their total losses in the net amount of $75,500 ($87,500 less legal costs of $10,000) on account of insurance paid in respect of the losses. However, the Plaintiffs seek to offset $28,000 of the insurance proceeds against the loss claimed against a 2010 Mercedes Benz E350, for which the Plaintiffs paid Khalife the sum of $33,000 on May 16, 2013 (Exhibit 1, Tab 65D and 65E). I was offered no principled explanation as to why the proceeds of insurance should be allocated in this way. As such, the amount of $75,500 should be available to offset all losses the Plaintiffs succeed in establishing. To be fair, the net proceeds of insurance should be allocated pro rata against losses fixed across each of the three groups of vehicles.
The Counterclaim
[261] It is clear that Khalife employed the same unlawful means to transfer vehicles owned by Sami’s to the corporate Plaintiffs, as he employed in the sale of vehicles from the corporate Plaintiffs to Sami’s Garage.
[262] On May 31, 2013, Sami’s Garage sold ten vehicles to Khalife for which Khalife provided two cheques, one for $120,571 and another for $83,846. Both cheques were dishonoured, after four of the vehicles were sold but only three delivered by Khalife to St. Laurent. The vehicles were valued at a total loss of $173,116.
[263] Just as the corporate Plaintiffs argued that Sami Abi Khaled would have known that Khalife, on behalf of Autologic, was in no position to pay for the vehicles sold to Sami’s, the argument is advanced on behalf of Sami’s that when Mr. Morse accepted delivery of the vehicles, he would have known Khalife, on behalf of Autologic, was in no position to pay for them.
[264] It is further argued that when Sami’s demanded the return of the vehicles, they were still at the time in the corporate Plaintiffs’ possession, such as to arguably amount to an “avoidance” of the sale, thereby resulting in a conversion of the vehicles on the part of the corporate Plaintiffs. This argument appears to rest upon an application of s. 24 of the Sale of Goods Act that would frustrate the corporate Plaintiffs’ ability to acquire a good title to the vehicles, even in circumstances where the evidence establishes that the purchase from Autologic was undertaken in good faith, and without notice of a defect in title.
[265] In my opinion, both of these arguments must fail for various reasons. First it appears that, while the corporate Plaintiffs paid in full for the purchase of four vehicles from Autologic, only three were delivered to them: a 2007 Porsche Boxster, a 2010 BMW 750LI, and a 2008 Mercedes S63 (Exhibit 1, Tab 65). As such, Sami’s must pursue Khalife for the value of the fourth vehicle, a 2010 Mercedes E350.
[266] Second, with respect to the three vehicles that the corporate Plaintiffs paid for and did receive, these were the subject of dishonoured cheques from Autologic to Sami’s and would be subject to the same test and treatment as well as burden of proof as the stop payment vehicles in the main action.
[267] I am satisfied that the corporate Plaintiffs, including their employees, Mr. Morse and Ms. Chambers, demonstrated good faith as well as an absence of any notice of a defect in title when Autologic sold the vehicles to St. Laurent, although it is certainly arguable that a want of due diligence and oversight where Khalife was concerned, diminished and delayed their abilities to protect their business operations.
[268] Third, it also cannot be clearly said that the sale was avoided, as required by s. 24 of the Sale of Goods Act, “at the time of the sale” to St. Laurent on May 31, 2013, but only after the cheques from Khalife were returned for insufficient funds after May 30, 2013, (Exhibit 6, Tab 69) and only after this subsequently came to the attention of Sami Abi Khaled and he demanded the return of the vehicles. At no time did Mr. Khaled testify that he learned that the cheques had been returned for insufficient funds or demanded return of the vehicles by or before May 31, 2013, the date on which the corporate Plaintiffs had fully paid for the four vehicles, received the bill of sales for them, and received delivery of only three of the four vehicles.
[269] Mr. Khaled’s testimony was that he telephoned Khalife after the cheques bounced, failed to reach him and went to the corporate Plaintiffs’ premises on June 6 or 7 looking for Mr. Khalife. Mr. Khaled recalled having conversation with Ms. Chambers at that time, to inquire as to Khalife’s whereabouts. He failed to testify that he demanded a return of the vehicles at that time.
[270] Fourth, one of the other ten vehicles alleged by Sami’s to have been converted by the corporate Plaintiffs appears to be an Audi A6 3.2, the ownership for which was never transferred to Sami’s from Holdin Leasing, but was transferred to Import Motors, Sami’s main client, prior to being sold to Import Auto (Exhibit 6, Tab 68). As such, if Sami’s has recourse against anyone for the Audi, it would be as against Holdin Leasing, Import Motors, and Khalife.
[271] The Counterclaim is, therefore, dismissed as against the Plaintiffs/Defendants by Counterclaim.
[272] The Plaintiffs by Counterclaim, Sami’s and Sami Abi Khaled shall succeed in recovery of the Counterclaim against Khalife for the full amount, as Khalife failed to enter a defence to the Counterclaim and is deemed to admit the allegations supporting it.
The Claim in Aggravated Damages by Sami’s Garage and Sami Abi Khaled against the Corporate Plaintiffs
[273] Although the Plaintiffs by Counterclaim, Sami’s and Sami Abi Khaled withdrew their claim for punitive damages, they maintained a claim in aggravated damages in the total amount of $250,000 jointly and severally against the Defendants by Counterclaim for having pursued the claim in civil fraud and conspiracy against them throughout these proceedings until these claims were withdrawn at trial.
[274] The claim for aggravated damages is based upon the allegations found in paragraphs 108 and 109 of the Statement of Defence and Counterclaim to the effect that, all of the Defendants by Counterclaim showed “a wanton and outrageous disregard for the rights of [Sami’s Garage and Sami Abi Khaled] and a wanton and outrageous disregard for proper business practices mandated by OMVIC.” Further, they “plead that the conduct of all of the Defendants by Counterclaim was insulting, highhanded, spiteful, malicious and oppressive which increased [Sami’s Garage and Sami Abi Khaled’s] emotional distress, humiliation, indignation, anxiety, grief, fear and the like.”
[275] To succeed in a claim in aggravated damages, the Plaintiffs by Counterclaim conceded they must satisfy the test expressed in the Supreme Court’s seminal case on defamation, Hill v. the Church of Scientology of Toronto, [1995] 2 S.C.R. 1130. The test requires a claim for aggravated damages to be supported by evidence of conduct designed to cause the Plaintiff humiliation and anxiety, and that succeeded in doing so. The Plaintiffs by Counterclaim also acknowledged that in assessing aggravated damages, a court may consider the entire conduct of the defendant from the time of wrongdoing to the conclusion of trial: See Paulin v. P.C.M. Collections Limited (Professional Collection Management) (Ont. S.C.), at para. 63, citing Platt v. Time International of Canada Ltd., [1964] 2 O.R. 21 (H.C.).
[276] The Plaintiffs by Counterclaim also referred me to the holding in Leenen v. Canadian Broadcasting Corp. (2000), 48 O.R. (3d) 656 (S.C.) in support of the proposition that aggravated damages are designed to compensate a plaintiff with an extra amount of damages as a result of the conduct of one or more of the defendants in a case of defamation.
[277] In my opinion, this is not a case for aggravated damages for the reasons which follow.
[278] The reliance upon case law grounded in the law of defamation does not assist me. Not only was Mr. Khaled’s claim in defamation and libel abandoned at trial, it having no reasonable prospects of success, in addition, Mr. Khaled offered no evidence at trial as to any feelings on his part of humiliation, anxiety or otherwise that would exceed the usual displeasure and discomfort that would be experienced in having to defend a claim based on the tort of conversion. There was certainly no medical information suggesting any clinical level of suffering on the part of Mr. Khaled, pertaining to the allegations he was required to meet at the end of the day in these proceedings. The only suffering he testified about related to the diagnosis and treatment for cancer.
[279] Furthermore, in the Counterclaim filed on behalf of Sami’s and Sami Abi Khaled, allegations were advanced at paragraph 55 as against all of the Defendants by Counterclaim, jointly and severally, including the corporate Defendants St. Laurent and Import Auto, as well as Mr. Mierins and Ms. Chambers seeking a declaration entitling the Plaintiffs by Counterclaim to trace the monies or vehicles “fraudulently obtained” by them. At paragraph 54 of the Counterclaim, allegations of “intentional” misrepresentation were enumerated as against Import Auto, suggestive of a claim in civil fraud.
[280] If any conduct on the part of the Defendants by Counterclaim warrants aggravated damages, I find that the abandoned claim in defamation coupled with allegations of fraudulently obtained vehicles and intentional misrepresentation made by Sami’s and Sami Abi Khaled would warrant similar censure.
[281] I hasten to add that I find no conduct on the part of counsel for either side would be such as to warrant a claim in aggravated damages.
[282] Suffice to say, as I have previously intimated, this was a case hard fought by parties who were equally victimized by the fraud of Khalife and Jabbar, and left to pursue recovery of their losses from those who did not abscond as Khalife and Jabbar did.
[283] The evidence simply did not support the allegations of civil fraud pursued by both sides throughout these proceedings and at trial. Determination of the claims turned upon application of the Sale of Goods Act, the Factors Act, and the tort of conversion.
[284] As such, I dismiss the claim for aggravated damages.
Final Orders
[285] In the result, there shall be judgment in the main action as follows:
In favour of the corporate Plaintiffs against Sami’s, Sami Abi Khaled, Khalife and Jabbar jointly and severally in the amount of $40,792 less available insurance proceeds for the missing/stolen vehicles; Sami’s and Sami Abi Khaled shall have judgment on the Counterclaim against Khalife and Jabbar for contribution and indemnity.
In favour of the corporate Plaintiffs against Khalife and Jabbar jointly and severally in the amount of $180,000 less available insurance proceeds for the consigned vehicles. The claim as against Sami’s and Sami Abi Khaled in conversion is dismissed.
In favour of the corporate Plaintiffs against Khalife and Jabbar jointly and severally in the amount of $208,550, less available insurance proceeds for the stop payment vehicles. The claim against Sami’s and Sami Abi Khaled in conversion for the stop payment vehicles is dismissed.
In favour of the corporate Plaintiffs, against Khalife alone, the sum of $33,000 for a 2010 Mercedes Benz E350, for which he was fully paid but failed to make delivery.
The corporate Plaintiffs shall apply the proceeds of insurance in the amount $75,500 against all of the above listed claims on a pro rata basis.
In respect of the Counterclaim, Sami’s and Sami Abi Khaled shall have judgment against Khalife in the total amount of $204,417 for the vehicles sold to Khalife for which payment was returned for insufficient funds. The Counterclaim as against the Defendants by Counterclaim, St. Laurent, Import Auto, Mr. Mierins and Ms. Chambers is dismissed.
The claim for aggravated damages as against the Defendants by Counterclaim, St. Laurent, Import Auto, Mr. Mierins, and Ms. Chambers is dismissed.
Costs
[286] I previously directed the parties to exchange and deliver their Costs Outlines and Bill of Costs in sealed envelopes to Trial Coordination by or before June 29, 2018.
[287] If the parties are unable to agree on costs within 30 days of release of these Reasons, they shall exchange and deliver written Costs Submissions of no more than 15 pages in length, along with any supporting case law within 30 days thereafter.
[288] Given the mixed success in the main action and Counterclaim, the parties shall not be permitted to deliver an additional response to the opposing Costs submissions of greater than 5 pages in length within the 15 days of the exchange of initial Costs Submissions.
Madam Justice Toscano Roccamo
Released: July 16, 2018
COURT FILE NO.: 13-58774
DATE: 20180716
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ST. LAURENT AUTOMOTIVE GROUP INC., and IMPORT AUTO LEASING INC.
Plaintiffs
– and –
SAMI’S GARAGE LTD., YASSINE JABBAR, SAMI ABI KHALED, and DMITRI KHALIFE
Defendants
SAMI’S GARAGE LTD, AND SAMI ABI KHALED
Plaintiffs by Counterclaim
ST.LAURENT AUTOMOTIVE GROUP INC., IMPORT AUTO LEASING INC., JOHN MIERINS, ANDREA CHAMBERS, YASSINE JABBAR, and DMITRI KHALIFE
Defendants by Counterclaim
REASONS FOR JUDGMENT
Toscano Roccamo J.
Released: July 16, 2018