REASONS FOR JUDGMENT

COURT FILE NO.: CV-19-4434-00 DATE: 2023 05 12

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

RAH TRANSPORT INC. Richard Anthony Hudson, Personal Representative for the Plaintiff Plaintiff

• and -

PRIDE TRUCK SALES LTD. and TPINE LEASING CAPITAL CORPORATION A. Mann, for the Defendants Defendants

AND BETWEEN:

TPINE LEASING CAPITAL CORPORATION Plaintiff by Counterclaim A. Mann, for the Plaintiff by Counterclaim

• and -

RAH TRANSPORT and RICHARD ANTHONY HUDSON Defendants to the Counterclaim

AND BETWEEN:

RAH TRANSPORT INC. and RICHARD ANTHONY HUDSON Plaintiffs by Counterclaim

• and –

PRIDE TRUCK SALES LTD., TPINE LEASING CAPITAL CORPORATION and CLE CAPITAL INC. Defendants to the Counterclaim

Richard Anthony Hudson, Personal Representative for the Defendants to the Counterclaim Richard Anthony Hudson, Personal Representative for the Plaintiffs by Counterclaim A. Mann, for the Defendants by Counterclaim

HEARD: October 31, November 1-4, 2022

LEMAY J.

[1] The Plaintiff company, RAH Transport Inc. (“RAH”), is a closely held company controlled by Richard A. Hudson. The Plaintiff entered into contracts with the Defendant, Pride Truck Sales Ltd. (“Pride”), to purchase two trucks—a Kenworth truck and a Volvo truck. The Kenworth was purchased in the late fall of 2018, and the contract for the Volvo was entered into in January of 2019. Each of the trucks were purchased by way of a down payment with a lease obligation that was arranged by the Defendant, TPine Leasing Capital Corporation (“TPine”).

[2] Mr. Hudson provided personal guarantees for the payment of both leases. Mr. Hudson’s personal guarantees have resulted in him being a Defendant to the counterclaim brought by TPine Leasing and has caused him to bring a further claim against CLE Capital Inc. (“CLE”) and others. I will generally use Mr. Hudson when I am referring to the actions or decisions of the Plaintiffs, although I do understand the separate legal identities of Mr. Hudson and RAH. As such, I will address their liability separately.

[3] The contracts were with the Defendant, Pride. Financing was arranged with the Defendant, TPine. TPine assigned its rights under the financing agreements to a third company, CLE. Given the complexity of the various actions, where I refer to Pride, TPine and CLE collectively, I will refer to them as the Defendants.

[4] Very shortly after the contract for the Volvo was signed, Mr. Hudson decided that the contract had been breached because he claimed that the Volvo did not have its annual certification, which was required under the contract. He also claimed that there were other deficiencies with the Volvo. After picking the Volvo up from Pride and having it inspected, Mr. Hudson returned it to Pride. He then refused to either pick it up or make the lease payments. Pride then sold the Volvo to mitigate its damages.

[5] The Plaintiffs also decided that there were issues with the Kenworth lease. As a result, Mr. Hudson stopped making payments on the Kenworth to the Defendants. However, he started to put these payments “in trust” in a segregated bank account that he held. As a result of the Plaintiff’s failure to make the lease payments to TPine, the Kenworth was also repossessed by TPine and sold at a loss.

[6] The Plaintiffs brought this lawsuit seeking recission of the contracts for both trucks. The Plaintiffs are also seeking damages for loss of income and other consequential losses. The Defendant TPine counterclaimed, seeking damages for losses associated with the repossession and sale of the trucks. There was then a further counterclaim brought by both Mr. Hudson and RAH against Pride, TPine and CLE.

[7] The pleadings and procedure in this case have been complex, but the issues boil down to whether the Plaintiff is entitled to either rescind the contracts or assert that they were at an end because of a substantial breach of the contract terms on the part of one or more of the Defendants. If the Plaintiff is still bound by the contracts, then the question is what damages are owing under the contract by the corporate Plaintiff and by Mr. Hudson.

[8] For the reasons that follow, I find that the corporate Plaintiff is bound by both the lease and the sale agreements. I also find that Mr. Hudson is bound by his personal guarantees. As a result, the Plaintiff’s claims are all dismissed and the Defendant TPine’s counterclaim is allowed as described below.

Background

a) The Parties and the Leases

[9] The Plaintiff, RAH, is a company that is controlled by Mr. Richard Hudson. I understand that Mr. Hudson had a business plan for his company that was focused on the purchase of some trucks so that he could perform work in the trucking industry. At the time that Mr. Hudson purchased his first truck, he did not have his licence to drive a truck. He obtained his licence at some point in either the latter part of 2018 or the early part of 2019.

[10] The Defendant Pride is a company that is in the business of selling trucks. They have operations in Ontario and the United States. The Defendant TPine is related to Pride and provides leasing and financing services for the trucks that Pride sells.

[11] The Defendant, CLE, is a third-party provider of collections services. CLE provides those services to TPine when TPine assigns leases to them. Section 10 of the lease agreement permits TPine to assign leases “without notice to or consent of the lessee”.

[12] There are two truck leases that are relevant to this case, as follows:

a) A 2016 Kenworth T680 blue truck (“the Kenworth”), purchased on October 20th, 2018. b) A 2015 Volvo 670 white truck (“the Volvo”), purchased on January 8th, 2019.

[13] The Kenworth was purchased with a limited six-month warranty that was administered by a third party. Mr. Hudson was offered the opportunity to purchase a warranty for the Volvo but declined.

[14] For each purchase, there were a series of documents that were completed and signed, as follows:

a) A Used Vehicle Bill of Sale, which was the initiating document in the series. These both had a notation reading “sales final” on them. b) A lease agreement for each truck that required payments to be made over a period of forty-eight (48) months for the Kenworth or thirty-six (36) months for the Volvo. Each lease agreement also gave the Plaintiff the option to purchase the truck for $10.00 at the end of the lease. c) A guarantee and indemnity guaranteeing the payments under the leases was signed by Mr. Hudson in both his capacity as the President of RAH and in his personal capacity.

[15] These documents were not all signed at once. Instead, they were signed at various points in the transaction. In addition, when the Kenworth was delivered to Mr. Hudson, he signed a Delivery and Acceptance Certificate. Mr. Hudson acknowledges signing this document for the Kenworth but denies signing it for the Volvo. Instead, Mr. Hudson acknowledges signing a delivery acknowledgement for the Volvo. Either way, it appears that by signing both documents, Mr. Hudson acknowledged that the truck was delivered to him in good condition and that all of the terms agreed to at the time of the sale had been met.

b) The Events In Relation to the Purchase of the Volvo

[16] The Volvo was purchased by the Plaintiff on January 8th, 2019. At that time, he signed the Used Vehicle Bill of Sale. The purchase price was $89,727.65. After signing the Used Vehicle Bill of Sale, Mr. Hudson had the truck inspected. The inspection revealed some deficiencies that Pride arranged with Prem Auto and Truck Repairs (“Prem”) to have fixed.

[17] After having Prem fix the deficiencies, the Plaintiff signed the lease agreement. On February 28th, 2019, the Plaintiff took possession of the Volvo and then took it for a further inspection at Canada Cartage. Some additional deficiencies were identified. The truck was returned to Pride, who arranged for Prem to remedy the other deficiencies. Mr. Hudson was then told that the truck was ready for pickup.

[18] On March 23rd, 2019, Mr. Hudson sent Mr. Iftikhar, a member of Pride’s sales staff, a text message advising him that Mr. Hudson had inspected the truck on Pride’s lot and that the marker/clearance lights were not working, and that the Volvo had an expired safety sticker. Therefore, the Plaintiff would not be taking the truck. He had a follow-up conversation with Mr. Tiwari, another member of Pride’s sales staff, on the same day.

[19] The Volvo was never picked up or used by Mr. Hudson or RAH. It was eventually re-sold by Pride. A Small Claims Court action was commenced by the Plaintiffs seeking recovery of the down payment on the Volvo.

[20] The issues in respect of the Volvo led the Plaintiffs to dispute issues in respect of the Kenworth, which had been purchased first. I will now outline those issues.

c) The Subsequent Refusal to Pay for the Kenworth

[21] As noted above, Mr. Hudson and RAH purchased the Kenworth in October of 2018. The purchase price was $100,146.35. Because Mr. Hudson did not have a licence, he had his father’s friend drive the truck to Cole Carriers Corp (“Cole”). A series of minor deficiencies were identified by Cole and then the Kenworth was taken to the Kenworth Truck Centre. Any deficiencies were addressed by Mr. Hudson, and the Kenworth was not returned to Pride.

[22] Mr. Hudson drove the truck from the fall of 2018 until June of 2020 when it was repossessed by TPine. In April of 2020, the Plaintiffs came to the conclusion that there were safety issues with the Kenworth that justified a recission of the contract, and that the Defendants had engaged in misconduct in respect of the Kenworth’s road worthiness and annual inspections. As a result, Mr. Hudson ceased making payments on the lease for the Kenworth. Mr. Hudson testified that he was holding those payments “in trust”.

[23] Based on the failure to make the April, May and June lease payments for the Kenworth, counsel for TPine wrote to Mr. Hudson on June 5th, 2020, advising him that the payments had not been made and that the Plaintiff had five business days to either return the Kenworth to TPine or to bring the payments into good standing. Otherwise, a bailiff would be retained to seize the Kenworth. Mr. Hudson returned the truck to TPine. After further proceedings, it was sold. I now turn to the litigation history of this case.

d) The Litigation History

[24] The original action in this matter was a Small Claims Court action commenced to recover the deposit for the Volvo. It was brought by Mr. Hudson and RAH against TPine and Pride only. This action was commenced in April of 2019. The Defendants, TPine and Pride, defended this action, and TPine brought a Defendant’s claim against both Mr. Hudson and RAH. This action was stayed by way of a Court Order on August 6th, 2019.

[25] In October 2019, RAH commenced an action against TPine and Pride. The action proceeded under the Simplified Procedure. TPine and Pride defended the action, and TPine brought the same type of counterclaim against both Mr. Hudson and RAH. This action was originally in respect of the Volvo truck only.

[26] In response to TPine’s counterclaim, Mr. Hudson and RAH brought a counterclaim against TPine, Pride and CLE. CLE originally did not defend this action and was noted in default. On June 9th, 2020, Bloom J. issued an Order on consent setting aside the noting in default. CLE then defended the action.

[27] As noted above, Mr. Hudson and RAH ceased making payments on the Kenworth truck. As a result, the truck was repossessed by the Defendants. Mr. Hudson and RAH brought a preservation motion before Doi J. on August 13th, 2020. They wanted to have the truck preserved pending trial. Doi J. dismissed this motion, awarding partial indemnity costs to the Defendants.

[28] Prior to the hearing of the motion before Doi J., the payments for the lease on the Kenworth for April, May, and June that Mr. Hudson was holding “in trust” were paid to counsel for the Defendants to hold in trust. Doi J. determined that these payments should be released to TPine. Doi J. also awarded partial indemnity costs to the Defendants. However, Doi J. reduced those partial indemnity costs to take account of the fact that the lease payment for all of June was made when the truck was only in Mr. Hudson’s possession until June 11th, 2020. This is an issue that I will address in my calculation of damages.

[29] The action continued, Affidavits of Documents were exchanged, and discoveries were completed. The pleadings were amended, essentially on consent, by way of an order made by Ricchetti R.S.J. on May 11th, 2021. The action that proceeded before me dealt with both the Kenworth and the Volvo.

[30] A pre-trial was held in this matter on May 11th, 2022. At that time, Associate Justice Jolley directed that the evidence in chief of all witnesses would be provided by Affidavit. She also set out strict time limits for cross-examination and re-examination at trial.

[31] On August 27th, 2022, the Defendants brought a motion to adjourn the trial on the basis that one of their witnesses was unavailable. On September 1st, 2022, Tzimas J. “reluctantly” adjourned the trial to the week of October 31st, 2022 and deferred the consideration of any costs thrown away to the trial judge. The trial proceeded before me the week of October 31st, 2022.

The Evidence

a) The Evidence Generally

[32] As I have noted above, Associate Justice Jolley made an order requiring the parties to provide their evidence by Affidavit and limiting the time for cross-examination and re-examination.

[33] I received an Affidavit from Mr. Hudson, on behalf of the Plaintiff, and heard testimony from Mr. Hudson. For the Defendants, I received Affidavits and heard testimony from the following people:

a) Sonny (Manjit) Rai, who was at all material times the Leasing Manager for Pride and TPine. b) Hassan Iftikhar, who was employed as a salesperson with Pride. Mr. Iftikhar left Pride in September of 2022. c) Vivek Tiwari, who was employed as an Account Manager with Pride at the material times. At the time that he testified, Mr. Tiwari had been promoted to Vice-President of Sales Operations. d) Harmanjit Singh Jhand, who was employed by Pride from 2015 to December of 2021. From the start of his employment until December of 2018, Mr. Jhand was an Accounts Manager. From January to December of 2019, Mr. Jhand was a Sales Manager. Then, from January of 2020 to the end of his employment with Pride, he was the Procurement Manager. e) Mark Pagniello, Collections Manager with CLE Capital. In that role, Mr. Pagniello oversees the collection team and deals with delinquent leases and Court matters.

[34] For all Affiants, I permitted the party calling them to ask some limited questions to complete their examination-in-chief. These questions were limited to an introduction of the witness and to issues that had either not been covered in the Affidavit or needed to be corrected. In Mr. Hudson’s case, I permitted him to provide me with significant additional documentation, including a manual entitled the National Safety Code Standard 11.

[35] The Affidavits of all the witnesses were marked as Exhibits and I treated the documents attached to the Affidavits as having been introduced for the truth of their contents. The other documents that were introduced were also marked as Exhibits and I also accepted them for the truth of their contents.

b) The Issue of Fraudulent Leases

[36] Mr. Hudson spent considerable time on the issue of whether the signatures on various copies of the leases in the possession of the Defendants were placed on the leases at the time the leases had been agreed to or had been placed there after the fact. It appeared to me that Mr. Hudson was alleging that the Defendants had engaged in fraudulent conduct with the documents that they issued. I have concluded that Mr. Hudson’s claims in respect of the potential fraudulent documents were not issues that were relevant to my disposition of this case.

[37] I reached this conclusion for two reasons. First, in his evidence, Mr. Hudson testified that he had signed lease agreements and other documentation for both trucks. Indeed, he produced this documentation. Second, during the course of evidence, counsel for the Defendants conceded that she would be prepared to have me use the documentation in Mr. Hudson’s Affidavit to decide the case. As a result, any claim that there was a fraud perpetrated by the Defendant in placing signatures on copies of the leases after the fact does not affect the question of what the terms of the leases were. This same conclusion applies to the other documents that I reviewed. Therefore, any alleged fraud on the part of the Defendants does not affect the question of whether there was a breach of the contracts by any of the Defendants. The terms of the contracts are the same regardless.

[38] Having determined that the terms of the contract are the same regardless, the resolution of this alleged fraud does not change the outcome of the case. Therefore, it would be a waste of Court resources to inquire further into these allegations. For these reasons, I declined to further consider Mr. Hudson’s evidence and submissions on this issue.

[39] I also acknowledge that Mr. Hudson has claimed that some, if not all, of the Annual Inspections were fraudulent. For reasons that I will explain, I have concluded that this argument also has no merit.

c) The Browne v. Dunn Issue

[40] Mr. Hudson was self-represented and was representing the corporate Plaintiff at trial. As a result, before Mr. Hudson began to cross-examine any witnesses and while he was still on the witness stand, I outlined the principle in Browne v. Dunn, to him. I explained to Mr. Hudson that, if he wanted to subsequently argue that a party had engaged in misconduct, he had to put that claim to the party when they were testifying. Mr. Hudson seemed to understand the requirements of the rule.

[41] However, at the end of the trial, Mr. Hudson sought to lead evidence to demonstrate that one of the invoices from Prem had been forged. That invoice, #7306, was for the Annual Inspection sticker for the Volvo. It is dated February 28th, 2019. It was attached to Mr. Hudson’s initial Affidavit.

[42] At no point during his cross-examination of any witness did Mr. Hudson suggest that this document had been invented. The closest he came to this suggestion was to ask Mr. Tiwari whether he could explain why this document was not in Pride’s Affidavit of Documents. No suggestion was ever made to any of the witnesses that Prem had not done this work, or that the money had not been paid by Pride for the work.

[43] In reply, Mr. Hudson sought to introduce evidence that was in his possession before the trial started in order to show that this invoice was fake. I ruled that Mr. Hudson would not be permitted to introduce this evidence and advised the parties that I would explain the reasons for my decision as part of my reasons for judgment. Those reasons follow.

[44] The rule in Browne v. Dunn can best be described as a “puttage” requirement. If one party is going to argue something contradictory to what a witness said, then that party is required to put that fact to the witness while they are in the witness box. The rule is rooted in principles of fairness and is designed to ensure that witnesses are given the opportunity to comment on contradictory testimony: see R. v. Quansah, 2015 ONCA 237, 125 O.R. (3d) 81, at paras. 75-86.

[45] In this case, Mr. Hudson had provided a copy of the invoice from Prem in his materials. There was no indication, until the Defendants had completed their case, that Mr. Hudson was challenging the authenticity of this document. As a result, the Defendants would have been prejudiced had I permitted Mr. Hudson to raise this issue in reply. I also note that I explained the rule in Browne v. Dunn to Mr. Hudson before he completed his evidence so that he understood what he was required to do. Finally, permitting Mr. Hudson to claim that this document was faked would have required a re-do of significant portions of the evidence. Indeed, it might have required additional discovery and/or production of additional documents or the testimony of a witness from Prem.

[46] For these reasons, I determined that the Plaintiff would not be permitted to raise this allegation at this late stage in the trial.

Credibility and Reliability

[47] Issues of credibility and reliability are being raised in this case, at least indirectly, by the Plaintiffs. As I understand the Plaintiffs’ claims, they are alleging that the Defendants have engaged in fraudulent conduct and have misled the Plaintiffs about documents that have been signed.

[48] Therefore, at the conclusion of evidence, I provided the parties with the Court of Appeal’s decision in R. v. H.C., 2009 ONCA 56. It contains a brief and clear description of the differences between credibility and reliability. At paragraph 41, Watt J.A. states:

[41] Credibility and reliability are different. Credibility has to do with a witness’s veracity, reliability with the accuracy of the witness’s testimony. Accuracy engages consideration of the witness’s ability to accurately

i. observe; ii. recall; and iii. recount

events in issue. Any witness whose evidence on an issue is not credible cannot give reliable evidence on the same point. Credibility, on the other hand, is not a proxy for reliability: a credible witness may give unreliable evidence: R. v. Morrissey (1995), 22 O.R. (3d) 514, at 526 (C.A.). [Citation revised.]

[49] In this case, I am of the view that all of the witnesses who testified before me were credible, in that they were honestly attempting to tell me what happened to the best of their recollection. In other portions of these reasons, I explain why I reject any claim that the Defendants were engaged in fraudulent conduct or were otherwise misstating what they had done. However, there were issues of reliability with some of the testimony. I will briefly outline those now.

[50] I am concerned about the reliability of Mr. Hudson’s evidence for two reasons. First, in his testimony, Mr. Hudson had a tendency to focus on what he thinks happened or should have happened rather than what actually happened. One good example of this problem can be seen in Mr. Hudson’s understanding of the decision of Doi J. In his evidence, Mr. Hudson took the position that this endorsement encapsulated an agreement that no further payments would be made for the Kenworth truck. On review of the endorsement, no such agreement exists.

[51] Second, Mr. Hudson’s Affidavit tended to state things that were not borne out by the documents that he attached to the Affidavit. An example of this can be found at paragraph 14 of his Affidavit, where Mr. Hudson states that he was told that the required work was completed on the Volvo and that it could be picked up. The attached text messages do not seem to have anything to do with that issue. There were other examples of this problem. As a result, I have approached Mr. Hudson’s evidence cautiously.

[52] On the Defendant’s side, there were some issues with the recollections of witnesses. Given that the trial was more than three and a half years after most of the events giving rise to this action, the dimming of recollections is to be expected.

[53] Given these issues, I have relied primarily on the written and contemporaneous documentation that I was given. Where I have made findings of fact in respect of the testimony of witnesses, I have explained the reasons for my findings.

The Issues

[54] This is a complicated action that has had a number of claims, counter-claims and third party claims. Essentially, however, there are two basic issues that arise in this case:

a) Whether the Plaintiff had the right to rescind the leases for either of the trucks. b) Whether the Defendants had breached the contract, such that the Plaintiff was entitled to treat the contract as at an end.

[55] The Defendant TPine has brought a counterclaim for damages from the Plaintiff’s failure to complete the contracts. If the Plaintiff is successful on either of these issues, then his success will be a full answer to any claim of damages being brought by TPine. If the Plaintiff is unsuccessful, then it will become necessary to consider TPine’s damages claims.

[56] The Plaintiff has also claimed damages for “lost revenue, income, profit, wages”. At the conclusion of the evidence, I asked Mr. Hudson to identify the evidence I had in the record before me to demonstrate that he had suffered any damages as a result of any breach of this contract. He mentioned an invoice from a lawyer that had been helping him put materials together.

[57] When I re-asked the damages question in argument, Mr. Hudson argued that the remedy of recission entitled him to be put back in his original place. In other words, the contract was rescinded, and he was entitled to receive his money back.

[58] When I pointed out to Mr. Hudson that he had the use of the Kenworth truck for 18 months for the business, he acknowledged the possibility that he might have been enriched. As a result, he stated that if there was a way to make things fair then that’s what I should do. Mr. Hudson did not point to any evidence to support his position.

[59] Based on these submissions, there is no evidence to support any damages claim from the Plaintiffs beyond the direct monies paid to the Defendants, even if the Plaintiffs were successful in their claims of fundamental breach or that the contracts should be rescinded.

The Applicable Law

[60] There are two principles of contract law that must be analyzed in this case: recission and contractual breach. I will briefly set out the applicable principles for each one. The Plaintiff is only seeking recission of the contract for the Kenworth.

[61] The test for when recission is available is set out in Hunter Engineering Co. v. Syncrude Canada Ltd., [1989] 1 S.C.R. 426 (at 499-500):

The formulation that I prefer is that given by Lord Diplock in Photo Production Ltd. v. Securicor Transport Ltd., [1980] A.C. 827 (H.L.), at p. 849. A fundamental breach occurs "Where the event resulting from the failure by one party to perform a primary obligation has the effect of depriving the other party of substantially the whole benefit which it was the intention of the parties that he should obtain from the contract" (emphasis added). This is a restrictive definition and rightly so, I believe. As Lord Diplock points out, the usual remedy for breach of a "primary" contractual obligation (the thing bargained for) is a concomitant "secondary" obligation to pay damages. The other primary obligations of both parties yet unperformed remain in place. Fundamental breach represents an exception to this rule for it gives to the innocent party an additional remedy, an election to "put an end to all primary obligations of both parties remaining unperformed" (p. 849). It seems to me that this exceptional remedy should be available only in circumstances where the foundation of the contract has been undermined, where the very thing bargained for has not been provided.

[62] This test is regularly adopted by the Courts, and I was referred to the decisions in Aquila v. Hamilton General Homes, an unreported decision of this Court and the Divisional Court’s decision in Lamba v. Mitchell, 2021 ONSC 8011.

[63] Second, there are the principles of contractual breach and repudiation. The Plaintiff’s argument, in essence, is that the conduct of the Defendants in respect of both the Volvo and the Kenworth amounted to a repudiation of the agreement of purchase and sale.

[64] At the conclusion of the evidence, I provided the parties with the Court of Appeal’s decision in Barresi v. Jones Lang Lasalle Real Estate Services Inc., 2019 ONCA 884. In that decision, the Court of Appeal stated (at para. 5):

[5] The trial judge correctly noted that contractual repudiation occurs “by words or conduct evincing an intention not to be bound by the contract”: Guarantee Co. of North America v. Gordon Capital, [1999] 3 S.C.R. 423, at para. 40. A contractual breach “is a repudiation of the contract if it is a breach of a contractual condition or of some other sufficiently important term of the contract so that there is a substantial failure of performance”: Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10, [2015] 1 S.C.R. 500, at para. 145. [Citation revised.]

[65] In addition to the principles of contract law, I was also referred to the Highway Traffic Act, R.S.O. 1990, c. H.8. More specifically, Mr. Hudson directed my attention to the regulation for Safety Inspections, R.R.O. 1990, Regulation 611. This regulation requires an annual inspection to be completed on all commercial vehicles, and the vehicles to display an Annual Inspection Sticker. Annual inspections require the vehicle to adhere, with some limited exceptions, to the NSC Standard 11B. That standard was also filed in evidence. When I refer to an Annual Inspection or to the Annual Inspection Sticker, I am referring to inspections conducted in accordance with the Regulation and the NSC Standard.

[66] As can be seen, these principles require consideration of the facts of each case. In this case, there are two separate leases for two separate trucks. The existence of separate trucks requires me to consider the two contracts separately. The issues in respect of the Volvo contract are more complicated, so I will address them first.

The Volvo Contract

a) The Sequence of Events

[67] The Volvo was purchased on January 8th, 2019, and a credit card deposit of $1,000.00 was paid for the vehicle. For reasons I will come to, I have determined that the total deposit paid for the Volvo is $10,000.00. Mr. Hudson arranged for the Volvo to be inspected by a third party, and a series of inspections were completed.

[68] On or about January 14th 2019, Mr. Hudson had the Volvo inspected by a third party mechanic. A series of defects were identified, including an oil leak, the fact that the batteries were not secured to the truck, and other details. Mr. Hudson identified these issues to Mr. Iftikhar and Mr. Tiwari.

[69] Prem performed work on the Volvo and provided an invoice dated January 22nd, 2019. The work included replacing brake parts, replacing parts in the oil system, and fixing other items on the truck. The total of the invoice was $4,795.38. Mr. Hudson was told that the work on the Volvo was completed on February 2nd, 2019. Mr. Hudson had a mechanic inspect the Volvo and came to the conclusion that the defects had not been remedied. He advised Mr. Iftikhar and Mr. Tiwari of the issues. On February 19th, 2019, Mr. Hudson was advised that the Volvo was ready for pick-up and that Mr. Iftikhar and Mr. Tiwari had expected to see him the previous Saturday.

[70] The documentation I have been provided with also demonstrates that an annual inspection was done by Prem in February of 2019 and that an invoice for the annual sticker was provided to Pride on February 28th, 2019.

[71] On February 28th, 2019, Mr. Tiwari met with Mr. Hudson and a series of documents were signed. These documents included the Delivery Acknowledgement form, discussed at paragraph 15. At this point, Mr. Hudson took the Volvo and dealers plates from Pride.

[72] On March 4th 2019, Mr. Hudson arranged to have the Volvo inspected a second time at Canada Cartage. Mr. Hudson’s Affidavit identifies a series of deficiencies, as follows:

a) Required lights were not working and/or the wrong type; b) The fire extinguisher was defective; c) There was no hazard warning kit in the vehicle; d) There was no valid Annual Sticker; e) There were three stone chips in the windshield; f) The hood was not secured as the cable/latch was broken; and g) The required safety marking was missing.

[73] Based on these deficiencies, Mr. Hudson returned the Volvo to Pride. At the same time, the lease payments, which were supposed to start on March 21st, 2019, were deferred on consent to April 15th, 2019.

[74] The Volvo was taken back to Prem for further work. On March 8th, 2019, Prem invoiced Pride for fixing a valve, a hood cable, and replacing some lights. The invoice was an additional $1,281.42, all inclusive. On March 19th, 2019, Mr. Iftikhar advised Mr. Hudson that the additional work on the Volvo had been completed.

[75] On March 23rd, 2019, Mr. Hudson went to Pride and looked in the Volvo. Mr. Hudson noted that there was still an expired safety sticker on the truck. Mr. Hudson alleges that he was told by Pride’s inventory supervisor, a Mr. Maninderjit Sing [sic] that there were “still many defects outstanding on [the Volvo], including the expired safety sticker.”

[76] I reject Mr. Hudson’s evidence about what he was allegedly told by Mr. Sing for four reasons, as follows:

a) There was a considerable amount of work done on the Volvo by Prem, and that work was demonstrated by invoices. The invoices from Prem indicate that there was a current Annual Inspection Sticker on the vehicle. In addition, Mr. Tiwari’s Affidavit contains a statement that he had seen the sticker on the Volvo. A photograph was also provided showing a current sticker. b) Mr. Hudson did not demonstrate the existence of any specific deficiencies with the Volvo after March 23rd, 2019. In that respect, I note that Mr. Hudson attached photographs to his Affidavit of the alleged deficiencies. I have reviewed those photographs and they do not demonstrate any significant issues with the Volvo. c) Even as of March 6th, 2023, the list of deficiencies (at paragraph 72) was relatively minor in nature. d) Mr. Hudson did not provide any explanation as to either why he was talking to the Inventory Manager about the Volvo or why the Inventory Manager would be familiar with the Volvo.

[77] In his Affidavit, Mr. Hudson states that on March 26th, 2019, he requested proof that the work had been performed. Mr. Hudson goes on to state that the information was not provided. The problem with this assertion is that one of the pieces of information that Mr. Hudson asked for in the exchange was the name of the mechanic and that information was provided.

[78] A meeting took place on March 31st, 2019. Mr. Hudson testified that, in the March 31st, 2019 meeting, he was told by Harman (Mr. Jhand) that he could have a full refund. Mr. Jhand’s evidence made it clear that he had told Mr. Hudson that he would look into the matter and, if possible, would cancel the sale and arrange for a return of the deposit. On Mr. Jhand’s evidence, there was no guarantee that the transaction would be unwound.

[79] I reject Mr. Hudson’s evidence that he was promised a full refund for three reasons, as follows:

a) By the time of the March 31st, 2019 meeting, Pride had spent a considerable amount of time and money (more than $6,000.00) satisfying Mr. Hudson’s demands to have the truck repaired and brought into compliance with safety standards. It is unlikely that, having spent this money and concluded that the Volvo did comply with the safety requirements, Pride would then simply agree to rescind the agreement. b) In addition, Mr. Hudson had taken possession of the Volvo and had signed the Delivery Acknowledgement for the Volvo. This suggests that the transaction had actually been completed as of the end of February 2019 and would not be unwound. c) As I have set out elsewhere, I have concerns with Mr. Hudson’s tendency to see and hear what he wants to hear rather than what actually happened. I am of the view that this is another example of the same issue with Mr. Hudson hearing something more than what he was told.

[80] In resolving this issue, I note that Mr. Hudson had a text exchange after this meeting where he said that he was expecting the return of his deposit. Mr. Jhand responded with “will check with accounts and get it processed.” It is certainly possible to construe this message as being a promise to return Mr. Hudson’s deposit. However, it has to be seen in the whole context of the exchange. In particular, the fact that Mr. Jhand has to check with accounting is important, coupled with the context of point a) in the paragraph above.

[81] This brings me to the issues raised by Mr. Hudson in respect of the concerns he had with differences in job titles that various Pride staff used. In my view, the issue of the titles of Pride staff is not relevant to the question of whether there is a binding contract.

[82] The only way that the specific job functions of the staff at Pride that Mr. Hudson dealt with would be relevant is if there was a finding that someone had guaranteed Mr. Hudson a refund. In those circumstances, I might have to determine whether the person making the promise had the authority to make it and/or whether Mr. Hudson had reasonable grounds to believe that the promise was binding. Having determined that no such promise was made, the issue of job titles is otherwise irrelevant to the questions I have to determine.

[83] After the March 31st, 2019 meeting, Mr. Hudson followed up on a number of occasions to see whether the deposit was going to be returned to him. The response was that they were checking into it. Mr. Jhand then sent a text message asking Mr. Hudson to come and see them in person. The purpose of this meeting was to advise Mr. Hudson that Pride would not be refunding the deposit. Mr. Hudson then commenced the Small Claims action that led to the action that I must determine.

b) Was there a Breach by any of the Defendants?

[84] No.

[85] I start with the work done by Prem. In the cross-examination of Mr. Tiwari, Mr. Hudson seemed to suggest that the Prem invoices were forged. He made that suggestion in part because there were differences in the number of kilometers that the Volvo had been driven on different documents and in part because one of the invoices (#7306) was not present in the original copy of the Affidavit of Documents.

[86] I reject Mr. Hudson’s contention that the invoices for this work were forged. In my view, the work was done by Prem on two separate occasions, and the Annual Inspection Sticker was properly issued for the Volvo. The fact that Pride was prepared to send the Volvo to Prem to have work done on it on two separate occasions demonstrates that Pride wanted to ensure that this contract was completed and wanted to ensure that the customer was satisfied.

[87] I have already explained why Pride would not have agreed to unwind the agreement at paragraph 79. I will expand on that explanation to note that, by March 31st, 2019, Pride had attempted to resolve a whole series of issues raised by a demanding client. Pride had been put to significant expense to resolve those issues and there was no basis to conclude that the Volvo was anything other than a completely roadworthy vehicle.

[88] Although I understood that Mr. Hudson was only arguing repudiation in respect of the Volvo, I will deal with both repudiation and rescission together. The facts of this case come nowhere close to establishing either a claim for recission or a claim for repudiation. The Volvo was purchased in January of 2019. Pride fixed deficiencies in the Volvo on two separate occasions. Other than Mr. Hudson’s concerns on March 21st, 2019, that the safety sticker was expired, there was no evidence to demonstrate that the Volvo was anything other than a completely roadworthy vehicle that had passed all required inspections as of that date. In terms of the safety sticker, I accept the evidence of both Mr. Tiwari and Mr. Iftikhar that the safety sticker was on the other side of the vehicle and that Mr. Hudson had missed it. This evidence is supported by the invoice from Prem confirming that the inspection was completed. As a result, there was no breach of contract on the part of any of the Defendants.

[89] Having concluded that there was no breach of contract, it follows that there was a binding contract between the parties in respect of the Volvo. I will address the issue of damages below.

The Kenworth Contract

a) The Sequence of Events

[90] The Bill of Sale for the Kenworth was signed on October 20th, 2018. Mr. Hudson did not have an AZ licence at that point. As a result, the Kenworth was driven off the lot by a friend of Mr. Hudson’s father on November 2nd, 2018.

[91] The Kenworth had to be taken immediately to a fuel station as the gas tank was almost empty. In addition, as it was being driven to Cole, the engine light turned on. The mechanics at Cole inspected the Kenworth and confirmed that a lift axle switch was not connected, the backup horn was not working, and some safety equipment needed to be put into the Kenworth. The mechanics at Cole did not identify any other problems.

[92] There were some other faults that were identified in the Kenworth in December of 2018, when it was taken for service at the Kenworth Truck Centre. Those faults were repaired by a third party provider. The total invoice for service was approximately $1,500.00 and included services for the following:

a) A “Platinum Service Special”, which included changing the oil and other maintenance-type activities; b) Replacing the fuel filters; c) Installing brake stroke indicators; d) Servicing the auxiliary heater; and e) Replacing the centrifugal oil filter cap.

[93] Many of these items (such as changing the oil and filters) would clearly not have been covered by any claim that the Kenworth was unsafe or otherwise unable to run when it was purchased. In any event, Mr. Hudson did not raise these issues with TPine or Pride and, as far as I know, did not make a claim under the extended warranty for any of these repairs.

[94] The Kenworth remained in the possession of Mr. Hudson and the Plaintiff until June of 2020. There were no issues raised by Mr. Hudson about the Kenworth between the end of 2018 and March of 2020 and the truck presumably continued to be used by Mr. Hudson and the Plaintiff. In argument, I suggested to Mr. Hudson that I could infer from the passage of time that there was an Annual Inspection for the Kenworth and that it passed that inspection sometime between the end of 2018 and March of 2020. Mr. Hudson did not really dispute this inference, although his position was not entirely clear to me. However, there was no dispute that the Kenworth was driven right up to the day it was returned. Therefore, I conclude that the Kenworth was able to pass the Annual Inspection sometime between the end of 2018 and March of 2020.

[95] However, starting in March of 2020, Mr. Hudson declined to make payments on the Kenworth truck. Instead, he put the money that was owing on account of the Kenworth truck into a bank account. Mr. Hudson took the view that the money was being held “in trust”. He received demands for the money and declined to pay. Ultimately, on June 5th, 2020, he was advised by counsel for TPine that he had a week to bring the payments into compliance or return the truck to TPine. As described above, Mr. Hudson returned the truck to TPine.

[96] Mr. Hudson argues that he was entitled to rescind the contract for the Kenworth in March of 2020 because it should not have passed the safety inspection at the time that it was sold to him in 2018. There are four significant problems with this argument:

a) The Plaintiff did not raise any issues with the condition of the Kenworth for more than 15 months after he purchased it. b) The concerns that were raised as set out at paragraph 92 are relatively minor. c) The concerns that were raised were not ever raised during the warranty period where Mr. Hudson would presumably have had the opportunity to have them repaired. d) The Plaintiffs had use of the Kenworth for the entire time period between December of 2018 and June of 2020, when it was returned to TPine.

[97] Mr. Hudson claims either recission of the contract or that there has been a fundamental breach of the contract. Neither argument can succeed. I start with recission. The test for the recission of a contract is a high one. It requires the party seeking recission to demonstrate that they were deprived of substantially the whole benefit of the contract. Given that Mr. Hudson had the use of the Kenworth for the entire time from December of 2018 to June of 2020 and was able to drive it, a claim for recission cannot be established.

[98] This brings me to the claim for repudiation. This claim is also not made out on the facts of this case. When Pride sold the truck to RAH, Pride believed that it had passed its’ Annual Inspection. It certainly had the Annual Inspection Certificate.

[99] Pride was never told until April of 2020 that there had been problems with the Kenworth. Even if Pride had been told about the problems, or was otherwise aware of them, they are very minor issues. In particular, the safety equipment, backup horn and disconnected cable identified by Cole are so minimal that, even if Pride had sold the truck knowing about those deficiencies, they would not have been enough to claim that Pride had repudiated the contract.

[100] The facts before me can be contrasted with one of the cases that I was referred to. In Nesbitt v. James Western Star Sterling Ltd., 2006 BCSC 473, the Court was required to consider the purchase and sale of a dump truck. In that case, the truck had been certified prior to it being sold to Mr. Nesbitt. However, within 600 kilometers, the truck required significant repairs, which included problems with the wheel alignment, a leaking fuel tank, problems with the brakes and damaged wheel rims. It was an extensive list of repairs that costed in excess of $10,000.00. The trial judge found that the mechanic from the Defendant who inspected the truck should have found a substantial portion of these issues. As a result, the trial judge permitted Mr. Nesbitt to recover damages based on the tort of deceit.

[101] While deceit was not argued in this case, I am of the view that the Plaintiffs could not establish the elements of that tort either. The problems with the truck in Nesbitt were much more extensive than the minor deficiencies in this case. To repeat, the issues that existed with the Kenworth at the time of purchase are not sufficiently significant to demonstrate that the Defendants had repudiated the contract.

[102] For the foregoing reasons, I conclude that RAH is bound to the contract to purchase the Kenworth and is bound to the lease agreement with TPine.

The Plaintiffs’ Claims Against CLE

[103] The Defendants argue that there is no tenable claim against CLE. During his argument, Mr. Hudson did not provide any specific assertions about CLE, other than that they pulled his credit report from the credit bureau and that they sent him a letter that was backdated. I find that there is no tenable claim against CLE by either Mr. Hudson or his company and I dismiss that claim. I will deal with each of these factual assertions in turn.

[104] I start by observing that there was no dispute that TPine had the right to assign the leases on the trucks purchased by the Plaintiff to CLE. That right flows from the lease agreements, which clearly state that the lease can be transferred “without notice to or consent of the lessee”.

[105] The assignment of the agreement to CLE transfers all the rights under the agreement to CLE. One of those rights is the ability to perform credit checks on the lessee and share the lessee’s account information for “any purpose” in that regard. The lessee, by signing the lease, provided a continuing authorization to run those credit checks. As a result, CLE was acting within its rights under the lease when it performed a credit check on Mr. Hudson.

[106] In the cross-examination of Ms. Rai, Mr. Hudson focused on details in respect of the relationship between TPine and CLE. In my view, these details are not significant because of the contractual arrangements in this case. Mr. Hudson’s leases permitted TPine to assign those leases without notice to him, and TPine had assigned those leases to CLE. The fact that the relationship between TPine and CLE was not clear from various documents that Mr. Hudson received does not change my conclusion that CLE was acting within its rights in its’ dealings with Mr. Hudson.

[107] Even if there was, somehow, a violation of the lease agreements between Mr. Hudson and TPine, there was no evidence led at trial to demonstrate that Mr. Hudson suffered any damages from CLE running a credit check on him.

[108] In addition, Mr. Pagniello’s evidence makes it clear that CLE was a third party service provider, and that their agreements were all with TPine. In other words, Mr. Hudson would not have known that CLE had actually been assigned the lease. The responsibility for managing the relationship with Mr. Hudson remained with TPine throughout these leases. CLE would only step in if TPine breached its obligations.

[109] In dealing with the relationship between TPine and CLE, Mr. Hudson again pointed to the fact that there were differences between the copy of the lease in the possession of TPine and the copy that CLE had. Again, given the fact that everyone agrees that valid leases were signed, there is no need to explore this alleged discrepancy. However, in any event, I note that Mr. Pagniello testified that CLE would put its own identifying information on its’ copies of the leases.

[110] This brings me to Mr. Hudson’s concerns about the letter that was in the materials that required him to do certain things on receipt of the letter. This letter was a notice of assignment. Mr. Hudson had concerns that this letter required him to provide documentation to CLE before he would have received the letter. It was not clear whether Mr. Hudson was arguing that this letter meant that the contract was breached. I am of the view that it did not for three reasons.

[111] First, I accept counsel’s assertion that the letter was being held in escrow and Mr. Pagniello’s evidence that it would only have applied if TPine had defaulted on their contractual obligations to CLE. Second, the letter was not produced until after this litigation had started. Finally, the letter did not change, in any significant way, Mr. Hudson’s obligations. He was still required to provide proof of insurance during the period of the lease.

[112] For these reasons, the claims against CLE are dismissed.

TPine’s Counterclaims

[113] TPine is counterclaiming against Mr. Hudson in respect of both the trucks because, according to TPine, there was a deficiency when each truck was repossessed and sold. The issues in respect of TPine’s counterclaims can be dealt with together.

[114] I have found that TPine had valid leases with RAH and that none of the Defendants breached any of the agreements with the Plaintiff. As a result, RAH remains bound to the agreements it has with the Defendant and liable for damages under those agreements.

[115] This brings me to the claims against Mr. Hudson personally. Mr. Hudson signed a personal guarantee in respect of each of the leases. That guarantee reads, in part:

1. Guarantee. You hereby unconditionally and irrevocably guarantee all of the debts and liabilities, present or future, direct or indirect, absolute or contingent, matured or not, at any time owing by the Lessee to us which are remaining unpaid by the Lessee to us ("indebtedness"). Your obligations hereunder are unlimited.

2. Guarantee Absolute. Your liability hereunder shall be absolute and unconditional and shall not be affected by (a) any lack of validity or enforceability of any agreements between the Lessee and us; any change in the time, manner or place of payment of or in any other terms of such agreements or the failure on the part of the Lessee to carry out any of its obligations under such agreements; (b) any impossibility, impracticability, frustration of purpose, illegality, force majeure or act of government; (c) the bankruptcy, winding-up, liquidation, dissolution or insolvency of the Lessee, the Lessor or any party to any agreement to which we are a party; (d) any lack or limitation of power, incapacity or disability on the part of the Lessee or of the directors, partners or agents thereof or any other irregularity, defect or informality on the part of the Lessee in its obligations to us; or (e) any other law, regulation or other circumstance which might otherwise constitute a defence available to, or a discharge of, the Lessee in respect of any or all of the Indebtedness.

[116] Therefore, both Mr. Hudson and his company are jointly and severally liable for any damages that are owing as a result of any breaches of the lease.

[117] In this case, the leases were valid when Mr. Hudson and his company breached them. He breached the Volvo lease by refusing to either pick the truck up or to make the lease payments. Mr. Hudson and his company also breached the Kenworth lease by refusing to continue to make the payments. The facts supporting my conclusion that there was a breach on the part of the Plaintiffs in each case are set out above. I would add that the leases required payments to be made over the course of the terms of the leases and that the leases are a “non-cancellable contract”.

[118] In argument and evidence, Mr. Hudson pointed to the decision of Doi J. on the preservation Order. Mr. Hudson argues that paragraph 10 of that decision encapsulates an agreement that, if the Kenworth was sold and not preserved, Mr. Hudson would not be required to make any payments on account of the Kenworth. Paragraph 10 of Doi J.’s endorsement states:

[10] In the event that an interim order was made for the preservation of the Truck, the Plaintiff sought a temporary stay of all monthly lease payments for the vehicle. The Defendants took the position that the Plaintiff should continue making the monthly payments if an interim preservation order was granted, and indicated that they would not seek the payments if such an order was not made. For the reasons set out earlier, an interim preservation order for the Truck will not be granted. In the circumstances, I find that the $6,881.58 being held in trust should be released to TPine, which shall be subject to my comments below regarding costs for this motion. In submissions, the Plaintiff did not strongly oppose the release of these funds if an interim preservation order were not granted.

[119] There are two problems with Mr. Hudson’s argument as follows:

a) I do not read the words in the decision of Doi J. as precluding the Defendants from claiming the monies owing under the lease. The willingness to forego a requirement that the payments were going to be made monthly does not represent a willingness to forgo their claim. b) The context of the proceeding before Doi J. must be remembered. It was a motion for preservation of the Kenworth. It was not an adjudication of the merits of either the Plaintiff’s claim or the Defendant’s counterclaim.

[120] There are two heads of damages that TPine can claim. The first is the non-payment of the leases. The second is the storage costs. TPine’s damages must be reduced by any amounts that they were able to obtain by mitigating their damages.

[121] Calculating the amounts remaining under the leases is an arithmetical calculation that is based on the price of the lease and how many monthly payments were remaining under the lease.

[122] TPine stored the vehicles at a related company and charged a storage fee of $80.00 per day plus HST for the time between when the vehicle was either returned by Mr. Hudson (in the case of the Kenworth) or not picked up by Mr. Hudson (in the case of the Volvo). Although the charges for storage are significant, there was no evidence led to contradict Ms. Rai’s evidence that these charges were incurred. I accept that they were reasonable charges.

[123] Further support for the view that these charges were reasonable comes from the decision of Dow J. in The Hertz Corp. v. McLaren Collision Centre, 2016 ONSC 1327. In that decision, the Court accepted a daily storage cost of $60.00 for a vehicle. In this case, we are dealing with a truck, which is a larger vehicle. This decision is further support for the view that the storage costs were reasonable.

[124] Ms. Rai’s Affidavit sets out detailed information about the efforts of TPine to mitigate its’ losses. There was no real challenge to that evidence, with one exception. The exception was over the sale invoice of the Kenworth. As I understand the arguments, Mr. Hudson was concerned that the invoice had not been fully collected on by TPine and therefore could not establish that the Kenworth was sold. However, either way, the monies received from the sale of the Kenworth are mitigation that assists the Plaintiffs by reducing the value of the claim against them. Therefore, I accept the conclusion that the Kenworth was sold.

[125] The Kenworth was sold in the United States. Ms. Rai’s Affidavit suggests that the exchange rate was 1.29 Canadian dollars per US dollar. I had no other evidence of the exchange rate, and the Plaintiffs did not seem to challenge the rate. I therefore accept the exchange rate.

[126] There is one other issue that should be mentioned. Ms. Rai’s Affidavit calculates the damages on the Volvo as including the $1,000.00 deposit. However, the documentation that was filed as part of Ms. Rai’s Affidavit suggest that this deposit was paid on February 21st, 2019. Specifically, the lease agreement for the Volvo sets out a deposit of $10,000.00. Similarly, the documentation filed as part of Mr. Tiwari’s Affidavit supports the view that the deposit was paid. Further, Mr. Hudson’s original small claims claim seeks the deposit back. Finally, given that the deposit was part of the terms of the lease, I infer that the vehicle would not have been released to Mr. Hudson if the deposit had not been paid. As a result, I find that the deposit was paid and have reduced the calculations accordingly.

[127] I would also note that it took some considerable time for the trucks to be sold. The Volvo was not sold until October 22nd, 2019, and the Kenworth was not sold until April 28th, 2021. However, both trucks were sold, and there was no evidence to suggest either that TPine took too long to sell the trucks or that the price that TPine received was not a reasonable price. In that regard, I note:

a) There was no deficiency for the Volvo, exclusive of storage costs. b) The Kenworth truck had been used for more than a year by Mr. Hudson. There would have been considerable wear and tear and depreciation during this time period. However, the deficiency was only approximately $15,000.00 (exclusive of the storage costs) once the lease payments that were made over the life of the agreement were accounted for.

[128] The values received for each truck do not appear to be unreasonable. Ms. Rai was subject to cross-examination and was not challenged on either the steps that were taken to mitigate the losses or the prices received for the sale of the truck. As a result, I accept that the steps that TPine took to mitigate its losses were reasonable.

[129] Given my findings, I have provided a chart as Appendix “A” that shows the damage calculations for each vehicle. There are two final issues that I should address in terms of these calculations.

[130] First, in the Appendix “A” calculation, I have separated out the tax on the lease payments from the rest of the monies paid. The reason I have done this is that it is not clear to me whether the damages payable to TPine should include taxes. If TPine will be required to pay taxes on the damages, it would seem to me that TPine should be able to collect the taxes from the Plaintiffs. If TPine is not required to pay the taxes on the damages, it would seem to me that TPine should not be able to collect the taxes from the Plaintiff. I will need submissions on this point.

[131] Second, there is the effect of Doi J.’s costs award. He reduced the total costs payable on the motion on August 13th, 2020 to take account of the fact that Mr. Hudson only had possession of the truck for 11 days in June of 2020. However, given my finding that the leases were binding on the Plaintiffs, it seems to me that the reduction in the costs Order of Doi J. should not be double-counted, and I have set that out on the chart.

[132] I am prepared to provide the parties with fourteen (14) calendar days to provide submissions of not more than three (3) single-spaced pages as to whether I have made an arithmetical error in the calculations, the effect of Doi J.’s costs award, and how to deal with the tax issues. Those submissions are to be strictly limited to these three issues. It is not an opportunity to re-argue any of the issues I have decided.

Conclusion and Costs

[133] For the foregoing reasons, the Plaintiffs’ claims against the Defendants are all dismissed. The Defendant TPine’s claim against the Plaintiff and Mr. Hudson is allowed.

[134] The Plaintiff company and Mr. Hudson are jointly and severally liable to pay the Defendant TPine the damages in this case. These damages remain to be precisely calculated, pending receipt of the submissions in paragraph 132.

[135] The parties are encouraged to agree on the costs of this trial. Failing agreement, the Defendants are to serve and file their costs decisions within fourteen (14) calendar days of today’s date. Those submissions are to be no more than three (3) single-spaced pages exclusive of offers to settle, case-law and bills of costs.

[136] The Plaintiff and Mr. Hudson are to serve and file their responding costs submissions fourteen (14) calendar days after receiving the costs submissions from the Defendants. Those costs submissions are also to be no more than three (3) single-spaced pages exclusive of offers to settle, case-law and bills of costs.

[137] For filing costs submissions, they must be uploaded to CaseLines and provided to my judicial assistant at zoe.chen@ontario.ca. There are to be no reply costs submissions without my leave, and there are to be no extensions to the deadline for costs submissions, even on consent, without my leave. If I do not receive costs submissions in accordance with this schedule, then there shall be no costs for this action.

[138] Finally, I confirm that I retain jurisdiction to finalize the damages calculation in this matter.

LEMAY J. Released: May 12, 2023

COURT FILE NO.: CV-19-4434-00 DATE: 2023 05 12 ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: RAH TRANSPORT INC. Plaintiff (Defendant by Counterclaim)

• and - TPINE LEASING CAPITAL CORPORATION and PRIDE TRUCK SALES LTD. Defendants (Plaintiffs by Counterclaim)
• and - RICHARD ANTHONY HUDSON Plaintiff by Counterclaim REASONS FOR JUDGMENT LEMAY J

Released: May 12, 2023

Appendix “A”

Kenworth Lease - Calculation

Description	Amount
Amount owed under Kenworth Lease agreement 32 months @ $2,029.96/month	$64,958.72
Taxes owing on lease 32 months @ $263.89/month	$8,444.48
Payments for April, May, and June 3 @ $2,029.96 (without taxes)	($6,089.88)
Taxes, April, May, and June @ $263.89/ month	($791.67)
Adjustments for June – Doi Endorsement	$1,452.82
Sale price $39,950 USD @ 1.29 CDN	($51,535.50)
Total owing =	$74,856.02
Less Mitigation =	($58,417.05)
$16,438.57 + storage costs $28,476.00
Total =	$44,914.57 (with taxes)

Appendix “A” – cont’d

Value Lease – Calculation

Description	Amount
Amount owed under Volvo lease 29 months @ $2,229.51/month	$64,655.79
Taxes owed under Volvo lease 29 months @ $289.84/month	$8,405.36
Credit for November 2019 Payment	($2,519.35)
Sale price of Volvo	($79,546.35) (including taxes)
With Taxes:
Amount owing =	$73,061.15
Credits =	($82,065.70)
($9,004.55)
Plus storage =	$10,667.20
Total damages Volvo =	$1,662.65