Driving Force Inc v I Spy-Eagles Eyes Safety Inc, 2020 ABQB 785

Court of Queen’s Bench of Alberta Citation: Driving Force Inc v I Spy-Eagles Eyes Safety Inc, 2020 ABQB 785 Date: 20201215 Docket: 1703 15571 Registry: Edmonton Between: The Driving Force Inc. Plaintiff - and - I Spy-Eagles Eyes Safety Inc. and Loretta Juneau Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice N.J. Whitling _______________________________________________________ 1.

Introduction [ 1 ] In this action, the Plaintiff The Driving Force Inc. (“Driving Force”) sues the Defendants I Spy-Eagles Eyes Safety Inc. (“I Spy”) and Loretta Juneau for conversion and breach of contract. The property at issue is a fleet of trucks which were leased by Driving Force to I Spy for use in I Spy’s business. I Spy has stopped making monthly payments on the trucks, but has not returned them to Driving Force. The parties disagree as to the terms of the applicable leases. Among other things, they disagree as to whether or not I Spy had the right to purchase the trucks.

Driving Force has not requested an Order directing the return of the trucks, and has not pleaded a claim in detinue. In addition to I Spy, Driving Force sues Ms. Juneau, the principal of I Spy, in her personal capacity. The Defendants have counterclaimed against Driving Force for breaching the same leases. 2. The Parties

[ 2 ] Driving Force is a vehicle sales and leasing company that carries on business at 28 geographical locations across Canada. Prior to the recent COVID-19 pandemic, it employed some 600 persons. The leases at issue in this action were entered into with I Spy at Driving Force’s location in Grande Prairie, Alberta. [ 3 ] I Spy is an Alberta corporation which carries or carried on business as an oilfield services company based in Beaverlodge, Alberta. It provided medical and safety services to companies working in the oilfield.

I Spy used the trucks it leased from Driving Force to provide these services to is clients. [ 4 ] Ms. Juneau is the owner and sole director of I Spy. She entered into the leases on behalf of her company. 3. The Trucks [ 5 ] The documentation before the Court reflects a total of nine vehicle leases between Driving Force and I Spy. All of the leased vehicles were Ford Super Duty F-350 trucks. The leases were entered into from time to time between December, 2013, and September, 2015.

Driving Force assigned a 6-digit “unit number” to each truck for its record-keeping purposes, and those unit numbers will be used in these reasons to refer to the trucks. Of the nine trucks, one was returned to Driving Force (117317), and one was purchased by I Spy (117591). In closing arguments, counsel for Driving Force indicated that no claim was made for a third truck (123312), since by its calculations, I Spy overpaid what was owing for that truck by some $7,586.40.

With respect to the remaining six trucks (120423, 121459, 121805, 125634, 128580 and 128930), I Spy has retained possession of all of them and has stopped making payments on all of them. The final monthly payments on each of these six trucks appear to have been made on or about August 4, 2017. The unit numbers respecting each of the nine trucks and the amounts claimed by Driving Force are summarized below: Unit Number Amount Claimed 117317 -- 117591 -- 120423 $16,558.38 121459 $13,602.96 121805 $17,273.92 123312 ($7,586.40) 125634 $35,955.46 128580 $49,357.06 128930 $66,780.50 Total: $191,941.88 4.

Driving Force’s Witnesses [ 6 ] Ms. Juneau testified that the Driving Force employee she dealt with when negotiating the leases was Ms. Aaron Bergeron. Driving Force did not call Ms. Bergeron as a witness at trial. Mr. Ayman Ammoura, Driving Force’s current President, testified that Ms. Bergeron is no longer employed by Driving Force, and that her current whereabouts are unknown. [ 7 ] However, Driving Force did call Ms.

Bobbi Josephson, a Rental Manager at its Grande Prairie branch, who testified that she was responsible for preparing the written documentation respecting Driving Force’s rental agreements with I Spy. Ms. Josephson testified that Ms. Juneau signed the leases for I Spy. Ms. Josephson did not agree that her task was to document terms and conditions that had previously been agreed upon between Ms. Juneau and Ms. Bergeron. [ 8 ] Mr. Ammoura provided evidence about Driving Force’s general practices respecting its leases with customers, and was able to explain and interpret the existing documentation. Mr.

Ammoura did not become involved in the dispute with the Defendants until after a significant controversy had arisen. Mr. Ammoura was able to identify the trucks that had not been returned by I Spy based upon whether or not the final invoice issued to I Spy included a value in the “Kms In” space. A blank value indicated that the vehicle had not been returned. [ 9 ] Driving Force also led evidence from its Controller, Ms. Marcy Watt. Ms. Watt testified that she prepared a reconciliation of the invoices issued by Driving Force to I Spy and the payments received on those invoices.

Her resulting spreadsheet was marked as Exhibit 5. This document summarizes the history of payments by I Spy with respect to each of the trucks, including the dates of the first and last payments. [ 10 ] The credibility of Driving Force’s witnesses is not seriously at issue in this trial. Instead, the Defendants argue that their evidence is of little value since the leases were actually negotiated by Ms. Bergeron, who was not called as a witness.

5. Ms. Loretta Juneau’s Testimony [ 11 ] Ms. Juneau was the only witness called by the Defendants. She testified that she negotiated the leases of the trucks with Ms. Bergeron, and that she continued to deal with Ms. Bergeron respecting her leases until they experienced a “communication breakdown”, beyond which point in time she dealt with other Driving Force representatives. She did acknowledge that she signed documentation provided to her by Ms. Josephson, but said that Ms. Josephson was merely following up on agreements that had previously been reached between Ms. Juneau and Ms. Bergeron. [ 12 ] Ms.

Juneau’s credibility is a significant issue in this trial. As explained in greater detail below, the agreements that she claims to have entered into with Ms. Bergeron differ significantly from the written agreements that she signed. Driving Force denies that any such collateral agreements exist, and argues that the agreements between the parties consist solely of their written agreements. [ 13 ] Ms. Juneau did not present as a credible witness. Her recollections of the key events at issue were few and lacking in specifics.

She repeated many times that her initial arrangement with Driving Force was for a “custom factory order truck lease to own”, or words to that effect, and that the first truck delivered to her (117317) did not meet the specifications of her order. But Ms. Juneau provided very little evidence in relation to the leases of the trucks that are actually at issue in this action. Her central proposition was that she had acquired all of the trucks pursuant to a lease to own agreement with a 36-month term and a buyout price of “about $4,000”. [ 14 ] On cross-examination, Ms.

Juneau rarely provided an answer that was responsive to the question put to her. Some of Ms. Juneau’s difficulties in testifying may have been understandably attributable to her hearing difficulties. But even after questions were repeated for her at higher volumes so that she could hear and understand them, Ms. Juneau was either unable or unwilling to provide responsive answers. Instead, she would repeat that she had ordered a “custom factory order truck lease to own” and that Driving Force had delivered the wrong truck. [ 15 ] When Ms.

Juneau was asked on cross-examination to acknowledge that she had no documentation to support her own version of the agreements, she would insist that such documentation does exist. However, very little in the way of supporting documentation ever materialized. What was produced instead was a large collection of written agreements bearing Ms. Juneau’s signature and reflecting different contractual terms. [ 16 ] At one point during her cross-examination, Ms. Juneau refused to acknowledge the presence of her signature on one of the many rental agreements between Driving Force and I Spy.

However, her counsel later acknowledged that the authenticity of her signature on the agreements was not at issue. [ 17 ] In addition to being inconsistent with the documentation she signed and received, some of Ms. Juneau’s evidence was inherently unbelievable. The main example of such evidence was Ms. Juneau’s testimony respecting the first truck she acquired from Driving Force, being truck 117317 or “the XLT”. Ms. Juneau testified that because the interior of the XLT was beige rather than black, Ms. Bergeron agreed to let her take it as a “promo vehicle”, meaning that I Spy was not required to pay for its use.

Although I Spy did immediately begin making monthly payments on that truck, Ms. Juneau stated that the payments on the XLT were supposed to be applied towards the payments on some other truck to be provided in the future. The XLT was not returned to Driving Force by the Defendants until approximately 25 months later and after some 38,000 kilometres of use. Ms. Juneau claims that all of this use was supposed to be for free. No documentation supporting the existence of a promotional agreement was produced or entered into evidence. The rental agreement that Ms.

Juneau did sign respecting truck 117317 contains daily and weekly rental rates, and does not state that the payments are to be applied towards a different lease. [ 18 ] I do not find Ms. Juneau to be a credible witness. Where her testimony differs from that of Driving Force’s witnesses or the existing documentation, I prefer the contrary evidence. 6. The Written Agreements [ 19 ] Mr. Ammoura explained that Driving Force leases vehicles to its customers in a variety of ways, depending upon each customer’s particular needs and circumstances.

These arrangements include both “rental agreements”, which do not contain an option to purchase, and “lease to own agreements”, which do contain an option to purchase. Driving Force documents its leases with its own set of standard form contracts. [ 20 ] As just noted, Driving Force’s standard form of “rental agreement” only contemplates a rental of the vehicle for a defined term at a specified rental rate. It does not confer any option to purchase the vehicle upon the “Renter” or lessee, and does not otherwise contemplate any transfer of title.

The form consists of a single sheet of paper with writing on both sides. The front of the form sets out information particular to each transaction, and has a line at the bottom for the customer’s signature. The back of the form contains a set of standardized terms and conditions. These include Condition 10, which states that the vehicle must be returned to Driving Force at the end of the rental term.

The form also serves the purpose of an invoice and sets out the rental payment currently due. [ 21 ] In contrast, Driving Force’s standard form of “Vehicle Finance Lease Agreement” is a lease to own agreement in that it includes a “Residual Purchase Agreement”, which confers an option to purchase the vehicle at the end of the term for a pre-determined price. One of the key elements of these agreements is the residual or buyout price. Mr.

Ammoura explained that Driving Force’s practice was to determine the residual price at the commencement of the agreement on the basis of several factors, including the term of the lease, the vehicle’s anticipated value at the end of that term, whether the lease was open or closed, and Driving Force’s profit margin. The residual price is also a function of the size of the monthly payments to be paid by the customer during the term of the lease. All else being equal, the higher the monthly payments, the lower the residual price.

[ 22 ] Driving Force’s practice was to obtain a customer signature at the bottom of the applicable form whenever it entered into a new lease with a customer. It would then retain a copy of the form for itself and provide another copy to the customer. Mr. Ammoura explained that when a customer retains possession of the vehicle beyond the return date specified on the form, Driving Force does not necessarily demand the return of the vehicle. Instead, Driving Force may effectively extend the term of the lease for another month by sending out another invoice in the same form.

Since these renewal invoices are automatically generated in the customer’s absence, they do not contain a customer signature, and the signature lines contain the typewritten words “ON FILE”. [ 23 ] With respect to the particular leases entered into between Driving Force and I Spy, the evidence includes original copies signed by Ms. Juneau on behalf of I Spy for three of the nine trucks (117317, 121459, and 123312), photocopies with signatures for three of the others (121805, 128580, and 128930), and unsigned copies with the “ON FILE” signature line for the three others (117591, 120423, 125634).

Although no explanation was provided for the absence of signed agreements respecting three of the trucks, there is no dispute that these agreements were effectively accepted by I Spy. Many copies of the agreements respecting these three trucks were provided to I Spy, I Spy took possession of the trucks, and the monthly rental rates specified in the agreements were paid. [ 24 ] Of the nine leases, only the lease respecting truck 123312 is a lease to own agreement.

The documentation respecting that agreement is more extensive than the others, and includes a Residual Purchase Agreement containing the following language: If you are not in default with regard to your lease agreement, you may purchase the vehicle at the scheduled termination of this lease for $26,000.00 being a genuine pre-estimate of the Fair Market Value of the vehicle at that time.

If you do not wish to purchase the vehicle at this amount, you remain liable to The Driving Force Inc. for the difference between the above mentioned amount, and an independent appraisal amount (for the subject vehicle) as determined by a maximum of three independent appraisals.

This option may be exercised by you of you advise the Lessor no later than thirty (30) days prior to the scheduled termination… [ 25 ] With respect to the written leases for the eight trucks other than truck 123312, including the six trucks for which Driving Force now claims damages, the Defendants acknowledge that they are rental agreements and not lease to own agreements. They do not contain any option to purchase, and there is no residual or buyout price specified anywhere in those agreements.

Instead, they provide at Condition 10 that the Renter is required to return the vehicle to Driving Force at the end of the term: 1. Return of Vehicle The vehicle must be returned on or before the date specified on the reverse of this Agreement. Written consent of DF must be obtained to renegotiate an agreement beyond this term. [ 26 ] Since Driving Force’s standard form of rental agreement also served the purpose of a monthly invoice, a great many of them were prepared and provided to I Spy, and many of them were entered into evidence at trial. 7.

The Proposed Amendments of March 16, 2015 [ 27 ] By no later than March 16, 2015, a significant dispute had arisen between the parties regarding their respective rights and obligations under the leases. The matters in controversy included whether or not I Spy had the right to purchase the trucks, and if so, at what prices. On that date, Mr. Brian Hogg, a Used Vehicle Manager with Driving Force, sent an email to Ms. Juneau attaching a series of letters respecting five of the trucks.

These letters set out new proposed terms and conditions which included both increased monthly payments and new buyout prices that could be exercised after a further six months. [ 28 ] Mr. Hogg was not called as a witness, and little in the way of context was provided to the Court respecting is letters of March 16, 2015. However, it appears from the reconciliation prepared by Ms. Watt that after that date, I Spy did pay the increased monthly payments reflected in Mr. Hogg’s letters. To that extent, at least, the leases between the parties were effectively amended. [ 29 ] However, Ms.

Juneau made it very clear in her evidence that the other terms in Mr. Hogg’s letters were unacceptable to I Spy. In particular, she did not agree with Driving Force’s proposed buyout prices since they did not reflect the “equity” that she believed I Spy had built up in the trucks. Neither side now takes the position that the terms contained in Mr. Hogg’s letters were accepted by I Spy, or that they otherwise carry contractual force. 8. The Alleged Collateral Agreement

[30] The central issue between the parties relates to the existence of a collateral agreement or agreements between the parties.While acknowledging that the written agreements do not confer any option to purchase upon I Spy, the Defendants argue that Ms.Bergeron, on behalf of Driving Force, agreed that I Spy could purchase the trucks after 36 months for a buyout price of “about $4,000”.Ms. Juneau’s evidence is that there was documentation prepared by Ms. Bergeron which evidenced this agreement, but that Ms.Bergeron did not provide copies of that documentation to Ms. Juneau. [31] In Sattva Capital Corp. v.

Creston Moly Corp., 2014 SCC 53 at para. 59, Rothstein J. described the parol evidence rule inthese terms: The parol evidence rule precludes admission of evidence outside the words of the written contract that would add to, subtract from, vary,or contradict a contract that has been wholly reduced to writing (King, at para. 35; and Hall, at p. 53). To this end, the rule precludes,among other things, evidence of the subjective intentions of the parties (Hall, at pp. 64-65; and Eli Lilly & Co. v. Novopharm Ltd., (SCC), [1998] 2 S.C.R. 129, at paras. 54-59, per Iacobucci J.).

The purpose of the parol evidence rule is primarily to achievefinality and certainty in contractual obligations, and secondarily to hamper a party's ability to use fabricated or unreliable evidence toattack a written contract (United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., (SCC), [1993] 2 S.C.R. 316, at pp. 341-42, per Sopinka J.). [32] One of the exceptions to the parol evidence rule pertains to collateral contracts.

However, the Supreme Court of Canada hasheld on several occasions that a collateral contract cannot be found where it would contradict the written agreement: Hawrish v Bank ofMontreal, (SCC), [1969] SCR 515 at p. 520; Bauer v Bank of Montreal, (SCC), [1980] 2 SCR 102 at p.113; Carman Construction Ltd. v Canadian Pacific Railway Co., (SCC), [1982] 1 SCR 958 at p. 967. [33] Taken at its strongest, the Defendants’ argument in the present case is that Ms. Juneau and Ms.

Bergeron negotiated a singleoral agreement at the outset of the relationship, and that each of the subsequent leases must be read and interpreted as part of a unifiedwhole.

The legal viability of such an argument was examined in Stankovic v. 1536679 Alberta Ltd., 2019 ABCA 187 at paras. 47-48: As noted in Axxess Mortgage Fund v 117620 Alberta Ltd, 2018 ABQB 626 at paras 183-189, the legal viability of a prior oralagreement that shapes the apparently contrary features of a written instrument, has been recognized by this Court in Palachek vCanadian Imperial Bank of Commerce, 1991 ABCA 8 at paras 8-10, 79 Alta LR (2d) 159; see also Strother v Darc, 2016 BCCA 297 atparas 24-26, wherein the court discussed the concept of “umbrella” agreements.

In Bank of Montreal v Wilder (1983), (BC CA), 149 D.L.R. (3d) 193 at para 146 (BCCA), aff'd (SCC),[1986] 2 SCR 551, the British Columbia Court of Appeal found that “[u]nder the shade of the umbrella” agreement, documents were tobe read and interpreted and applied as a unified whole. And further, “the umbrella agreement, as a collateral agreement, comes within thecollateral agreement exception to the parol evidence rule, so long as it is a true collateral agreement, established by the evidence and notmerely a unilateral oral representation in derogation from the express terms of the document . . .”. 9. Ms.

Juneau’s Testimony Respecting the Collateral Agreement [34] Ms. Juneau’s testimony respecting the nature of the collateral agreements she entered into with Ms. Bergeron was brief. Shestated that it was agreed that there would be a term of 36 months, and a buyout of about $4,000 at the end. Little else in the way of detailwas provided with respect to the contents of the collateral agreement, or the circumstances under which it was created. Ms. Juneau didnot specifically state that her agreement with Ms.

Bergeron was a single “master” or “umbrella” agreement which governed all thesubsequent leases, but she also did not suggest that there were a series of discrete agreements respecting each of the trucks. In any event,Ms. Juneau claimed a right to purchase all of the trucks for $4,000 after the expiration of 36 months. [35] Additionally, as noted above, Ms. Juneau stated many times that Ms.

Bergeron agreed that truck 117317, or the XLT, wasprovided to I Spy as a promo truck, such that I Spy’s payments on that truck were to be credited towards its payments on another truck tobe provided by Driving Force in the future. Ms. Josephson testified that she did not agree to provide the XLT on a promotional basis, andMr. Ammoura testified that Driving Force does not provide trucks to customers on a promotional basis. [36] As noted earlier, I do not find Ms. Juneau to be a credible witness. Although Ms. Bergeron did not testify, Ms.

Josephsonconfirmed that she was responsible for preparing the written agreements and other documentation between Driving Force and I Spy, andthat she obtained signatures from Ms. Juneau. Not only do those written agreements lack any option to purchase, they also state inCondition 10 that the vehicle must be returned to Driving Force at the end of the term, thereby implicitly negating the existence of anysuch option. [37] Further, when Driving Force and I Spy did agree to enter into a lease to own agreement, as distinguished from a mere rentalagreement, different documentation was prepared and signed by Ms.

Juneau. In particular, on August 25, 2014, Driving Force and I Spyentered into a lease to own agreement respecting truck 123312. That agreement is entirely unlike the agreements respecting the othereight trucks in that it contains a Residual Purchase Agreement specifying a buyout price, with an additional signature from Ms. Juneau at

the bottom. I Spy leased three of the trucks now at issue (125634, 128580, and 128930) after it entered into a lease to own agreement respecting truck 123312, yet obtained only rental agreements respecting those three trucks. A reasonable person could not have failed to understand that I Spy had only acquired a lease to own agreement with respect to one of the trucks, and rental agreements with respect to all of the others. [ 38 ] Given that Ms.

Juneau was not a credible witness, and given that the collateral agreement she relies upon is directly contradicted by the many written agreements she signed and received, I give her testimony on this subject very little weight. 10. Admissions by Driving Force [ 39 ] In support of the Defendants’ argument that there existed a collateral agreement, and that the documentation respecting that agreement has been lost or destroyed, they rely upon certain statements made by Driving Force employees in the context of the parties’ efforts to negotiate a settlement of this dispute.

Although these communications occurred when a litigious dispute was in existence, none of the parties has claimed settlement privilege over these communications. [ 40 ] Firstly, the Defendants rely upon a May 8, 2015, email exchange between Ms. Juneau and Mr. Brian Hogg of Driving Force, which includes the following exchange: [Mr. Hogg] It turns out that you are not tied to any long term agreement on the XLT so the only unit you are committed to is the one from Calgary the rest are on a monthly basis.

If I were you I would dissolve the agreement on all the oldest units unfortunately we have to have them back on our lot in order to continue to generate income and we can’t do that if they are elsewhere. Keep the ones you need and the others will have to be put back into our inventory. [Ms. Juneau] Brian I have paperwork and the agreement with Aaron was a lease to buy on that unit [Mr. Hogg] I don’t think it was ever followed up on.

That’s what the agreement was but I don’t think legal Docs were filled and signed according to the files [Emphasis added] [ 41 ] Secondly, the Defendants rely upon certain oral statements made to Ms. Juneau by Ms. Montana Currie on behalf of Driving Force during an in-person meeting at a restaurant in Beaverlodge. This meeting was audio-recorded by Ms. Juneau, and later reduced to an unofficial transcript. Ms. Juneau and Ms. Currie consumed food and alcoholic beverages at this meeting, and the conversation ranged across many personal matters unrelated to the present dispute. After an initial apology by Ms.

Currie on behalf of Driving Force, the conversation proceeded as follows: Ms. Currie: … So anyway, I wanted to put that [apology] out there and I mean that very sincerely. Part of my problem has been I don’t have anything, like I don’t have her agreements. I don’t have [Ms. Bergeron’s] agreements. I have searched her office, I have searched. Ms. Juneau: She took the record then or what? Ms. Currie: You know what, Loretta, I have no idea. Nobody can get a hold of her. I don’t know where she is. I don’t know where she is at. Um, so that’s been part of my struggle, not that that makes it better, so. Ms.

Juneau: No, but it’s not surprising because a lot of employees do things like that when they leave somewhere. They do other things like that to put a screw in things. Ms. Currie: She really put a screw into it. Ms. Juneau: Well, she did, yup.

Ms. Currie: Yup, a big one, so. Ms. Juneau: Because the agreements we had was that they were lease option to buy . Ms. Currie: And that’s what they should have been, and that’s what they are . Ms. Juneau: The first 3 trucks were all like her doing it, you know, and then afterwards when Brian came and then Brian said that all of a sudden there was 6 months before I could do leases with an option to buy, but I could rent the truck for 6 months and I said well why did that be? Ms. Currie: I am just going to go. Ms. Juneau: Lease to buy? Ms.

Currie: I am just going to explain that a little bit. [Emphasis added] [ 42 ] Various attempts at compromise were made by Ms. Juneau and Ms. Currie at the Beaverlodge meeting. One of the sticking points was Ms. Juneau’s unwillingness to assume responsibility for I Spy’s use of the XLT for 25 months and 38,000 kilometres. The following exchange occurred on this subject: Ms. Juneau: Well, there is not a whole lot to discuss because that truck was supposed to be a loaner truck and money was supposed to go to Lariat. Ms. Currie: Yeah I know. [ 43 ] Ms.

Juneau went on to state at the Beaverlodge meeting that she wanted all of her payments on the XLT to be applied to one of the other trucks. Ms. Currie responded by offering to credit I Spy with the sum of $14,000 to settle this issue, but that compromise was not acceptable to Ms. Juneau. [ 44 ] In assessing the significance of the above evidence, I note at the outset that by operation of s. 26.1(1) of the Alberta Evidence Act , Ms. Currie’s apology to Ms.

Juneau at the commencement of the Beaverlodge meeting does not constitute an admission of liability, and “shall not be taken into account in any determination of fault or liability in connection with that matter.” [ 45 ] Regarding the other statements made by Mr. Hogg and Ms. Currie, the Defendants argue that they constitute admissions by Driving Force that, contrary to the written agreements, the leases were all lease to own agreements. The Defendants rely, among other authorities, upon the following

summary of the law on this subject by Eamon J. in 1808882 Alberta Ltd. v. Moderno Ventures Ltd. , 2018 ABQB 885 at para. 97 : … Admissions are exceptions to the hearsay rule, and admissible to prove the truth of the matter admitted. The Court's main concern is that an admission must be made in a sufficiently formal manner to ensure that the party making the admission has considered its words carefully. Informal admissions are prima facie admissible, but that they may or may not be binding on the party that made them, depending on the circumstances under which they were made.

A party may adduce evidence to contradict or explain an informal admission. The Court should consider whether an admission was made inadvertently or hastily; whether it was made with knowledge of the facts, and whether new facts have come to light since the admission was made. In a

summary application, the admissions must be clear and unequivocal, without a need to weigh evidence.

[ 46 ] Applying the above principles to the present case, the admissions by Mr. Hogg and Ms. Currie are admissible as exceptions to the hearsay rule. However, a consideration of the circumstances in which they were made confirms that they are informal admissions and not formal admissions. That being the case, Driving Force does not require leave to withdraw them. [ 47 ] In order to assess the weight to be accorded to these admissions, they must be considered in their context.

Although neither party asserted that the communications in which the admissions are found are subject to settlement privilege, the fact remains that they were made in the context of the parties’ attempts to settle a litigious dispute. A significant amount of money and other property was at stake, and Driving Force was attempting to strike a deal to avoid litigation with one of its customers. In other words, the admissions were made to buy peace. [ 48 ] Further, neither of the admissions by Mr. Hogg or Ms. Currie appear to have been informed by any documents supporting Ms. Juneau’s version of events. Mr.

Hogg stated in his email that documents respecting the agreements alleged by Ms. Juneau were never “filled and signed”, and Ms. Currie advised Ms. Juneau at the Beaverlodge meeting that she had searched Ms. Bergeron’s workspace and had been unable to locate any agreements supporting Ms. Juneau’s version of events. In essence, Driving Force was willing to take Ms. Juneau at her word rather than fan the flames of controversy. [ 49 ] Having considered all of these circumstances, I place very little weight upon the admissions made by Mr. Hogg and Ms. Currie.

In addition to being vague and unsupported by documentation, they reflect concessions that were offered in the context of efforts to settle a litigious dispute. It is more likely than not that Mr. Hogg and Ms. Currie were prepared to proceed with negotiations on the basis of assumed facts that they did not know or believe to be true in the hopes of reaching a settlement. Consequently, they are of little probative value in determining the true nature of the parties’ contractual arrangements. 11.

Conclusions and Findings Respecting the Parties’ Agreements [ 50 ] I find that the Defendants have failed to establish the existence of any collateral agreement or agreements that give I Spy an option to purchase any of the trucks.

Even if I had found the evidence relied upon by the Defendants to be credible, the alleged collateral agreement cannot be found as a matter of law since it would contradict the terms of the parties’ written agreements ( Hawrish ; Bauer ; Carman Construction ) . [ 51 ] There being no collateral agreement, I find that the parties’ agreements respecting the trucks are their written agreements. The only written agreement conferring an option to purchase upon I Spy is the written agreement respecting truck 123312, which is not one of six the trucks for which Driving Force now claims damages. 12.

Breach of Contract [ 52 ] The Defendants claim damages for breach of contract respecting six of the trucks, namely trucks 120423, 121459, 121805, 125634, 128580, and 128930. I Spy has failed or refused to return all six of those trucks, and it appears from Ms. Watt’s reconciliation that I Spy’s last monthly payments were credited to I Spy’s accounts on or about August 4, 2017. There is no evidence that I Spy has ever purported to exercise any option to purchase any of these six trucks, and there is no evidence that Driving Force paid any buyout prices respecting any of these six trucks.

This conduct constitutes breaches of the leases, notably the obligation in Condition 10 to return the trucks at the end of each rental term. [ 53 ] The Defendants have raised at least three arguments as potential justifications for I Spy’s refusals to return the trucks or to pay any monthly rental fees beyond August, 2017. Firstly, they claim that I Spy breached the leases by failing or refusing to apply the payments made by I Spy for its use of the XLT as a promo vehicle to one of the other vehicles.

Secondly, they argue that Driving Force breached the leases by refusing to recognize the “equity” that I Spy had built up in the trucks by virtue of the monthly payments it made. Thirdly, they argue that Driving Force breached the leases by refusing to provide the Defendants with adequate information and documentation respecting the parties’ lease and payment arrangements. (

a) Failing to Treat the XLT as a “Promo” Vehicle [ 54 ] Regarding I Spy’s first defence, and as noted above, I do not accept Ms. Juneau’s evidence that truck 117317, the XLT, was provided to I Spy by Driving Force as a “promo” vehicle, in the sense that I Spy was entitled to use that vehicle for 25 months and 38,000 kilometres free of charge. The written agreement respecting the XLT is dated November 14, 2013. Both the agreement and its related documentation were signed by Ms. Juneau. The agreement provides that I Spy is required to pay a daily rental rate of $79.95 and a weekly rental rate of $479.00.

Condition 10 requires that the truck must be returned on the date specified on the front of the agreement,

which is stated to be November 30, 2013. The rental agreement was then renewed on a month-to-month basis by Driving Force sendingout monthly invoices reflecting a lease for a further month at the same rates and on the standard terms and conditions. Nothing in theoriginal agreement or its monthly renewals states that the XLT was provided as a promotional vehicle, or that the monthly paymentswere to be applied towards another vehicle lease. Ms. Josephson testified that she did not agree to provide the XLT on a promotionalbasis, and Mr.

Ammoura testified that Driving Force does not provide trucks to customers on a promotional basis. [55] Further, even if there did exist an obligation upon Driving Force to apply I Spy’s monthly payments on the XLT towards asecond vehicle, its failure to do so would not justify I Spy’s retention of all six trucks while refusing to make monthly rental payments onany of them. Consequently, I Spy’s first defence to breach of contract is rejected. (

b) Failing to Recognize I Spy’s “Equity” in the Trucks [56] Regarding I Spy’s second defence, the Defendants complain that Driving Force would only permit I Spy to purchase thetrucks at buyout prices which did not reflect I Spy’s “equity” in the trucks. By the Defendants’ own calculations, I Spy ought to havebeen entitled to purchase the vehicles at their then fair market values minus the aggregate of all the monthly payments it had made oneach truck. Since Mr.

Hogg’s letters of March 16, 2015, did not reflect buyout prices calculated on that basis, the Defendants argue thatthey were entitled to retain the trucks without making any additional payments. [57] In the context of vehicle and equipment leases, “equity” or ownership in the subject property may accrue to the lessee indifferent ways, depending upon the terms of the lease. As Yamauchi J. noted in Royal Bank of Canada v. Cow Harbour ConstructionLtd., 2012 ABQB 59 at para. 51, some vehicle and equipment leases expressly confer an equity interest upon the lessee.

As an example,a lease may provide that, following repossession, the lessee will be credited for any excess sums realized by the lessor on the sale of thevehicle: Re Smith Brothers Contracting Ltd. (1998), (BC SC), 53 BCLR (3d) 264 (SC) at paras. 58-60. DrivingForce’s own form of rent to own agreement also reflects the build up of a sort of equity in the sense that larger monthly payments willentitle the lessee to purchase the vehicle at a lower buyout price at the end of the term.

But contrary to the Defendants’ arguments, thissort of “equity” is not comparable to a homeowner’s equity in a house that she owns subject to a mortgage. A lessee under DrivingForce’s form of lease to own agreement does not acquire any ownership interest in the subject vehicle unless and until the option topurchase is exercised in accordance with its terms. [58] In any event, as emphasized throughout these reasons, the leases between Driving Force and I Spy respecting the six trucks atissue are not lease to own agreements.

They contain no option to purchase, and they contain no provision reflecting a build-up of equityin the trucks. Instead, they state that the vehicle must be returned to Driving Force at the end of the lease term. [59] Further, even if I had found the existence of the collateral agreement alleged by Ms. Juneau, the agreement described in hertestimony did not include any contractual term that would convert I Spy’s monthly rental payments into an equity interest in the trucks.Ms. Juneau’s testimony was limited to her recollection that the alleged leases to own were for 36 months with a buyout price of about$4,000.

Ms. Juneau did not suggest that Ms. Bergeron agreed that I Spy’s monthly payments would be credited as equity in the trucks. [60] For these reasons, the Defendants’ second defence to Driving Force’s claim for breach of contract is rejected. I Spy had notacquired any equity interest in the six trucks at the time that it stopped making payments. Instead, it was required by Clause 10 to returnall of the trucks to Driving Force at the end of the month that its last payment was made. (

c) Refusing to Provide I Spy with Information [61] Finally, the Defendants allege that Driving Force breached the agreements by refusing to provide the Defendants or theircounsel with information and documentation respecting their lease and payment relations. Mr. Juneau made many complaints of thisnature in the course of the parties’ attempts to resolve this dispute. At trial, the only specific information complained about by theDefendants was information respecting the amount that Driving Force paid to acquire the trucks prior to leasing them to I Spy.

DrivingForce refused to provide that information on the basis that it is internal and confidential. [62] This third defence to the Defendants’ claim for breach of contract is also rejected. Nothing in either the actual writtenagreements or the collateral agreements alleged by Ms. Juneau created any obligation on the part of Driving Force to provide theDefendants with any information respecting the terms on which Driving Force acquired the trucks from its own supplier(s). In any event,any breach of such an obligation would not entitle I Spy to keep all the trucks without paying for them. (

d) Conclusions on Breach of Contract [63] In conclusion, I find that I Spy breached its agreements with Driving Force by failing to return trucks 120423, 121459,121805, 125634, 128580, and 128930, to Driving Force after I Spy stopped making rental payments on those trucks.

13. Conversion [64] Driving Force also sues the Defendants for the tort of conversion. [65] The tort of conversion involves a wrongful interference with the goods of another, such as taking, using, or destroying thegoods in a manner inconsistent with the owner’s right of possession. The tort is one of strict liability, and although the dispossessionmust arise as a result of the defendant's intentional act, it is no defence that the wrongful act was committed in all innocence (BomaManufacturing Ltd. v. Canadian Imperial Bank of Commerce, (SCC), [1996] 3 SCR 727 at para. 31; 373409 AlbertaLtd. (Receiver of) v.

Bank of Montreal, 2002 SCC 81 at para. 8). In Fleming's The Law of Torts (10th ed., 2011) at pp. 66-67, thefollowing definition of conversion is found: Conversion may be defined as an intentional exercise of control over a chattel which so seriously interferes with the right of another tocontrol it that the intermeddler may justly be required to pay its full value. [66] In Chow v Gershman Transport International Ltd, 2000 ABQB 360 at para 13, Paperny J. (as she then was), adopted thefollowing four essential features of conversion from G.H.L.

Fridman, The Law of Torts in Canada, 3rd ed., (Toronto: Carswell, 1989) atp. 95: (1) a wrongful act; (2) involving a chattel; (3) consisting of handling, disposing or destruction of the chattel; (4) with the intentionor effect of denying or negating the title of another person to such chattel. [67] I find that I Spy is liable to Driving Force in conversion. The conduct which constitutes the conversion is the same conductwhich constitutes the breach of contract.

By refusing to return the trucks beyond the cessation of its monthly rental payments, I Spy tookand used the trucks in a manner inconsistent with Driving Force’s right of possession. This exercise of control over the trucks has soseriously interfered with Driving Force’s right to control the trucks that I Spy may justly be required to pay the trucks’ full value. 14.

Assessment of Damages for Breach of Contract [68] The basic rule for assessing damages for breach of contract was laid down by Parke B. in Robinson v Harman (1848), 1 Ex850 at p. 855: The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to beplaced in the same situation, with respect to damages, as if the contract had been performed. [69] The scope of the losses compensable as damages pursuant to the above rule is defined by the principles in Hadley vBaxendale (1854), 9 Exch 341, 156 ER 145 at p. 151: Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect ofsuch breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e., according to the usualcourse of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of bothparties, at the time they made the contract, as the probable result of the breach of it. [70] In the present case, all of the leases for the six trucks had, by the time of the breaches by I Spy, been continued on a month-to-month basis.

That is, Driving Force would send out a new rental agreement each month containing a demand for the monthly rental rate,as well as the standard terms and conditions printed on the back. As noted above, Condition 10 provided that the trucks were to bereturned to Driving Force on the date specified on the front, and the front of the document appointed the last day of each month as thereturn date. If those leases had been properly performed by I Spy, all six of the trucks would have been returned to Driving Force on thelast day of the month that I Spy made its last payment.

Driving Force is therefore entitled to damages representing the fair market valueof the six trucks that ought to have been returned to it on that date, plus any consequential damages, such as any loss of rental incomesince the breach. 15. Assessment of Damages for Conversion

[71] A tortfeasor liable in conversion will be forced to purchase the converted asset from the plaintiff. The general measure ofdamages is the market value of the converted asset as of the date of conversion. In addition, the plaintiff is entitled to consequentialdamages that are not too remote: Asamera Oil Corporation Ltd. v.

Sea Oil & General Corporation et al. (SCC), [1979]1 S.C.R. 633 at p. 652; Royal Bank v W Got & Associates Electric Ltd (1994), (AB KB), 150 AR 93 at para. 37, aff'd1997 ABCA 136, aff'd (SCC), [1999] 3 SCR 408; 2105582 Ontario Ltd. (Performance Plus Golf Academy) v. 375445Ontario Ltd. (Hydeaway Golf Club), 2017 ONCA 980 at para. 61; 1384334 Alberta Ltd. (c.o.b. Buster's Pizza) v. Buster's Pizza Donair& Pasta Enterprises Ltd., 2020 ABQB 369 at para. 93. [72] An application of these principles to the facts of the present case leads to the same measure of damages for conversion as forbreach of contract.

That is, I Spy is liable to Driving Force for the fair market value of the trucks on the date that I Spy converted thetrucks by refusing to return them at the expiration of the leases, plus any consequential damages that are not too remote. 16. Driving Force’s Proposed Approach to Assessing Damages [73] Driving Force’s proposed assessment of damages is not grounded in the legal principles summarized above. Instead, DrivingForce proposes an alternative methodology.

For ease of reference, the amounts claimed by Driving Force are here again reproduced: Unit Number Amount Claimed117317 --117591 --120423 $16,558.38121459 $13,602.96121805 $17,273.92123312 ($7,586.40)125634 $35,955.46128580 $49,357.06128930 $66,780.50Total: $191,941.88 [74] The amounts tabulated above are rooted in the testimony of Mr. Ammoura. He explained that using Driving Force’s standardpractices, he was able to effectively go back in time and create the notional lease to own agreements that Driving Force would,theoretically, have been willing to offer I Spy in the past.

Using a monthly rental rate of $1,850, an assumed term of 36 months, thetrucks’ Canadian Black Book values, and Driving Force’s traditional profit margin, Mr. Ammoura was able to calculate the buyoutprices that Driving Force would have offered to I Spy if the parties had negotiated lease to own agreements rather than rental agreements. [75] During closing arguments, Driving Force passed up a

summary of the above damage amounts calculated on the basis of anassumption that I Spy performed the notional lease to own agreements contemplated by Mr. Ammoura. The resulting calculationsassume that I Spy would pay $1,850 times 36 months, plus the notional buyout price determined by Mr. Ammoura for each truck.Driving Force would then credit I Spy with the rental payments that it actually paid pursuant to the actual rental agreements. [76] Driving Force’s proposed methodology is wrong in law.

Driving Force is entitled to be placed in the same situation that itwould have been if I Spy had performed the rental agreements that the parties actually agreed to. The law does not allow this Court toaward damages against a defendant on the basis of a fictional contract. However, as explained below, the amounts claimed by DrivingForce pursuant to its own methodology are acceptable in the exceptional circumstances of this case. 17.

Evidence Respecting the Fair Market Value of the Trucks on the Date of Conversion [77] As explained above, the law requires Driving Force’s damages to be assessed on the basis of the trucks’ fair market value onthe date or dates that they were converted by I Spy, together with any consequential damages that are not too remote. Since DrivingForce calculated its damages on the basis of an alternative methodology, Driving Force did not call expert evidence respecting the fairmarket value of the trucks on the date that they were converted. In fact, Driving Force did not address these issues at all.

However, therecord does contain some material containing helpful information respecting these subject matters. [78] Regarding the date of the conversion, the reconciliation prepared by Ms. Watt indicates that I Spy stopped making paymentson the six trucks at issue on November 9, 2016. There followed a series of 9 or 10 monthly invoices issued by Driving Force that werenot immediately paid. Then, on August 4, 2017, I Spy’s accounts for the six trucks were credited with three monthly payments of $1,850each (plus GST).

There being no other explanation regarding I Spy’s payment history, I find that I Spy converted the trucks on or aboutAugust 31, 2017, being the last day of the month of its last payments.

[ 79 ] Regarding the fair market value of the trucks on the date that they were converted, Ms. Juneau testified that in the course of her negotiations with Driving Force, she acquired what she understood to be the then “blue book” values of the trucks from Mr. Dustin Kersey, a Branch Manager with Hub International Insurance Brokers. The values used by Mr. Kersey – apparently for insurance purposes – were contained in an attachment to an email sent to Ms. Juneau on July 20, 2017, and now appear at page 294 of Exhibit 1. Ms. Juneau and her mother later included Mr.

Kersey’s values in a table entitled “Loretta’s trucks 2017” under the column title “Dustin”. That table was provided to Driving Force for negotiation purposes, and was marked at trial as Exhibit 4. Mr. Kersey’s values are as follows: Unit Number “Dustin” 120423 $43,000 121459 $47,000 121805 $47,000 125634 $47,000 128580 $49,000 128930 $49,000 [ 80 ] Also included in the record are valuation estimates of the six trucks that Ms. Juneau acquired from Rainbow Ford Sales Inc. for the purposes of her negotiations with Driving Force. These documents are undated, and Ms. Juneau was unable to say when she acquired them.

They do not include the unit numbers for the trucks, and so it is impossible to determine which of the six documents relate to which of the six trucks. They include handwritten notations, some of which are indecipherable, which apparently reflect the trucks’ odometer readings. The values on these documents are as follows: $52,000, $52,000, $38,000, $45,000, $45,000, and $45,000.

The first of these documents include the handwritten word “wholesale”, suggesting that these are wholesale values. [ 81 ] Exhibit 1 also includes single-page printouts from the website “Canadian Black Book Online” for each of the six trucks. Mr. Ammoura explained that he used these documents to prepare the buyout prices for his notional lease to own agreements. The documents each contain a “Data version” value of “20170710” in the top right corner, which may indicate a date at or around the time that they were produced.

However, the resulting price ranges depend upon numerous variables that are not reflected in the evidence, including the general condition of the truck, [1] and the odometer readings. [2] Although Mr. Ammoura’s documents are of limited value, they do reflect values in the same general “ballpark” as those in Mr. Kersey’s and Rainbow Ford’s estimates. [ 82 ] The evidence summarized above does not establish with precision the fair market value of the trucks on the date that they were converted.

What that evidence does establish, however, is that the amount of damages now claimed by Driving Force is significantly lower than it would be entitled to on a strict application of its legal rights. Whereas Mr. Kersey’s numbers would yield a total value of $282,000, and whereas the Rainbow Ford numbers would yield a total value of $277,000, Driving Force now seeks only $191,941.88.

Driving Force’s lower number reflects the fact that it is prepared to recognize that its customer effectively acquired some “equity” in the trucks, despite the fact that no such equity is conferred on a strict reading of the applicable leases. Driving Force is also prepared to credit I Spy for the amount of $7,586.40 which it deems to be an overpayment on truck 123312, which was apparently purchased by I Spy pursuant to the one option to purchase that it did acquire. Driving Force also does not seek any consequential damages, such as any lost rental income from the converted trucks. 18.

Damages Award [ 83 ] Although the methodology proposed by Driving Force is incorrect in law, it is appropriate under the exceptional circumstances of this case to award Driving Force the amount that it seeks. That amount is less than Driving Force would be entitled to on a strict application of its legal rights. Driving Force has effectively abandoned a significant portion of its claim out of a sense of fairness to its customer. I therefore assess Driving Force’s damages in the requested amount of $191,941.88. 19. Personal Liability of Ms. Juneau [ 84 ] Driving Force sues Ms. Juneau in her personal capacity.

This despite the fact that all of the leases name I Spy as the “Renter”. Driving Force relies upon Aubin v Petrone , 2020 ABCA 13 , which contains the following passage at paras. 21-22. The corporate veil is not impenetrable. The law provides for instances when the veil may be “pierced” or “lifted”. Such instances are rare

and difficult to categorize, as the Supreme Court of Canada recognized in the seminal case of Kosmopoulos v Constitution InsuranceCo, (SCC), [1987] 1 SCR 2 at 10: As a general rule a corporation is a legal entity distinct from its shareholders: Salomon v. Salomon & Co., [1897] A.C. 22 (H.L.) Thelaw on when a court may disregard this principle by “lifting the corporate veil” and regarding the company as a mere “agent” or“puppet” of its controlling shareholder or parent corporation follows no consistent principle.

The best that can be said is that the“separate entities” principle is not enforced when it would yield a result “too flagrantly opposed to justice, convenience or the interests ofthe Revenue”: L.C.B. Gower, Modern Company Law (4th ed. 1979), at p. 112. Recognizing the variety of unpredictable situations in which it may be appropriate to lift the corporate veil, Kosmopolous reserves to thecourts a residuum of ability to act to prevent injustice when necessary. However, the courts have been appropriately leery of interpretingKosmopolous as free rein to trench on the principle of corporate separateness.

Some have tried to set out criteria or factors to govern thedetermination of when the corporate veil should be lifted. [85] In the present case, it the requirements of the Kosmopolous test are not met. I Spy is not a sham corporation created to shieldMs. Juneau from personal liability. Rather, it is a company that carried on business providing medical services to oilfield companies.Driving Force is a sophisticated commercial actor, and all of its documentation establishes that Driving Force understood that it wasdealing with a corporation and not with Ms. Juneau in her personal capacity. Ms.

Juneau’s conduct, while intentional, was not fraudulentor deceitful. She mistakenly believed that I Spy was not required to pay the buyout prices demanded by Driving Force, and openlyasserted those mistaken views to Driving Force. [86] Although not cited by Driving Force, there does exist a separate line of authority which suggests that a different approach tolifting the corporate veil applies to directors and shareholders who commit intentional torts such as conversion.

The gist of that authorityis encapsulated in the following passage from Lewis Klar et al., Remedies in Tort, looseleaf (Toronto: Carswell, 1987) at 4-60: §91.1 A director or a shareholder who commits a tort of conversion will be personally liable for the conversion.

That individual is theprimary tortfeasor responsible for the conversion occurring and the fact that he or she was acting on behalf of the company is no defence.Where the conduct of the sole officer, director and shareholder of the corporate defendant is intentional, wilful and deliberate, both theindividual and the company are jointly liable for the torts of conversion and trespass. [Footnotes omitted] [87] Cases lending support to the above principles include International Factors Ltd. v Rodriguez, [1979] 1 All ER 17 (C.

A) at p.20, Shibamoto & Co. Ltd. v. Western Fish Producers Inc., (FC), [1991] 3 FC 214 (TD) at paras. 47-49, aff'd (1992)145 NR 91 (FCA), Massey v Brost (1996), (AB KB), 185 AR 81 (QB) at paras. 44-46, Craig v North Shore HeliLogging Ltd. (1997), (BC SC), 34 BCLR (3d) 330 (SC) at paras. 58-65, Columere Park Developments Ltd v EnviroCustom Homes Inc, 2010 BCSC 1248 at para 33, and 1384334 Alberta Ltd. (c.o.b. Buster's Pizza) v Buster's Pizza Donair & PastaEnterprises Ltd., 2020 ABQB 369 at para. 94.

In Shibamoto at para. 49, Rouleau J. stated what he found to be the applicable rule in thefollowing terms: These cases demonstrate that when an individual chooses to convert property belonging to a third party and that property is in thepossession of a company which he controls, the individual as well as the company is liable in tort… [88] However, in CIT Financial Ltd. v 1153461 Ontario Inc. (2004), (ON SC), 47 BLR (3d) 269 (Ont SCJ),Sutherland J. disagreed with the above statement from Shibamoto, stating that “In my opinion such a broad and unnuanced statement isnot in accordance with the authorities.” Sutherland J. also noted that many of the aforementioned cases which impose personal liabilityupon directors for conversion deal with fraudulent or sham transactions.

Consequently, they would likely satisfy the requirements of theKosmopolous test in any event. [89] To the extent that the Shibamoto line of authority may reflect a relaxed standard of personal liability for directors who engagein conduct amounting to conversion, I decline to apply that standard in the present case. Since the particular conduct which amounts tothe conversion – namely the failure to return the trucks at the end of the leases – is specifically governed by contractual provisionsbetween the corporate parties, Ms.

Juneau may rely upon I Spy’s separate corporate existence to shield herself from personal liability. [90] In BG Checo International Ltd. v British Columbia Hydro and Power Authority, (SCC), [1993] 1 SCR 12at para 16 and 18, the Court accepted that wrongful conduct which supports an action in both in contract and in tort may be sued upon ineither or both. However, this concurrency of liability is limited by the “primacy of private ordering”, meaning that there may be arestriction on the right to sue in tort where an express or implied contractual obligation limits or contradicts the tort duty.

If, for example,the contract includes a clause which limits or excludes liability for tortious conduct, that clause will be given effect. This principle wasapplied in Royal Bank v W Got & Associates Electric Ltd. (SCC), [1999] 3 SCR 408 at paras. 23-25, where it was heldthat claims in breach of contract and conversion for the same wrongful conduct should result in similar compensatory damages awards

absent “special features”. [91] In the present case, the conduct which constitutes the conversion is specifically addressed and regulated by the parties’ writtencontracts, and the same conduct constitutes the breach of contract and the conversion. Although the contracts do not expressly excludeliability against Ms. Juneau in her personal capacity, Driving Force understood and agreed that it would look to the corporation, and notto Ms. Juneau, for its remedies in the event of any breaches of their agreements.

Absent the sort of special circumstances contemplatedby Kosmopolous, Driving Force may not avoid its agreements by the expedient of framing its claim in both contract and conversion. [92] For these reasons, I dismiss Driving Force’s claim against Ms. Juneau in her personal capacity. Driving Force agreed that itwould look to I Spy, and not to Ms. Juneau, for the payment of the rental rates and the return of the trucks. It should be held to this aspectof its bargain absent exceptional circumstances. 20.

The Counterclaim of the Defendants (Plaintiffs by Counterclaim) [93] The Defendants counterclaim against Driving Force on the basis that Driving Force’s refusal to recognize the Defendants’ownership of the trucks has resulted in lost resale proceeds. In support of this claim, Ms. Juneau testified that had it not been for DrivingForce’s refusal to recognize I Spy’s ownership of the trucks, she would have taken seven of the trucks down to the United States whereshe would have sold them each at a profit of US$30,000.

On this basis, she seeks damages in the amount of US$210,000, less anyamounts found to be owing on the trucks. [94] The Defendants’ counterclaim is dismissed. Since the written agreements between the parties were rental agreements, and notlease to own agreements, the Defendants never acquired title to the trucks, and never had the right to sell them. Further, Ms. Juneau’sbare assertion that she could have sold each of the trucks at a profit of US$30,000 is not sufficiently reliable to establish the occurrenceof any such lost resale value. 21.

Driving Force’s Claim for Enhanced Costs [95] Driving Force seeks enhanced costs against the Defendants, and relies upon Clause 6 of the rental agreements, which reads: 6. Repossession Notwithstanding any other terms of this Agreement, DF may in its sole discretion terminate this Agreement for any cause and:

i) the vehicle shall, upon demand of DF, be delivered to DF at the renter’s expense at such place and time as DF shall designate; or ii) DF may, at the renter’s expense, and without legal process, repossess the vehicle where and when it is found; and the renter waives allfurther and future rights to possession of the vehicle and all claims for injury, damages or loss suffered or caused by or through suchrepossession.

Any repossession or other action DF may take shall not prejudice DF’s right to recover in full any loss or damages together with the costof any legal proceedings to enforce the terms of this Agreement, including costs on a solicitor and his own client basis. [Emphasis added] [96] Contractual provisions which entitle one party to an enhanced level of costs are generally enforceable, especially in thecommercial context. However, in 3058354 Nova Scotia Co. v.

On*Site Equipment Ltd., 2011 ABCA 168 at para. 101, Bielby J.A.addressed the effect of a contractual costs provision in the following terms: It is not clear that the wording of clause 13.4 is sufficient to support an award of solicitor-client costs: see Canada Deposit InsuranceCorp. v. Canadian Commercial Bank (1999), 1999 ABQB 266 , 243 A.R. 168 (Q.B.); West Edmonton Mall Ltd. v.McDonald's Restaurants of Canada Ltd. (1993), (AB KB), 144 A.R. 331 at para. 73 (Q.B.), aff'd (1995), 1995

ABCA 503 , 178 A.R. 127 at para. 23 (C.A.). It is not necessary to decide this issue, however, because even if that wording wassufficient, the trial judge had the discretion to override a contractual right to costs. He could refuse to enforce such a right where there aregood reasons for so doing, including where the successful party has engaged in improper conduct or where the case presents specialcircumstances that makes the imposition of solicitor-client costs unfair or unduly onerous: see 369413 Alberta Ltd. v. Pocklington(2000), 1999 ABQB 936 , 79 Alta.

L.R. (3d) 222 at para. 50 (Q.B.), rev'd on other grounds 2005 ABCA 376. [97] In the present case, I decline to award enhanced costs to Driving Force pursuant to Clause 6 of the rental agreements for thefollowing reasons. [98] Firstly, Clause 6 is less than clear in its wording as it relates to costs. As indicated by its title, the main purpose of Clause 6 isto deal with the subject of repossession. The language dealing with costs provides that any repossession of the vehicle by Driving Force“shall not prejudice” Driving Force’s right to recover costs on a solicitor and his own client basis.

Arguably, this language is not itselfthe source of any right to enhanced costs, and there is no separate provision conferring such a right upon Driving Force. [99] Secondly, Mr. Ammoura acknowledged during his testimony in-chief and cross-examination that at one point in the parties’negotiations, Driving Force advised Ms. Juneau that it considered the trucks to have been stolen, and threatened to report those thefts tothe police.

Although the Court was not provided with any more specifics regarding this communication, counsel for Driving Force didacknowledge during closing argument that it should not have happened, and that it would be appropriate to reduce Driving Force’sdamages award, at least to a limited extent, due to this conduct. [100] Thirdly, it becomes necessary at this point to refer to the records submitted by Driving Force to the Court in support of its claim.The documentation before the Court is contained primarily in Exhibit 1, which is a 612-page binder containing the entirety of DrivingForce’s production and all of the undertaking responses produced by the parties throughout the pre-trial stages of this action.

Noapparent effort was made to put this collection into any semblance of order, or to separate the relevant records from the irrelevantrecords. Most of the resulting collection consists of irrelevant material, such as settlement communications with counsel, invoices forparts and repairs, and seemingly random printouts from Driving Force’s computer system. The key records in this lawsuit, such as thewritten agreements between the parties, are scattered haphazardly throughout the binder.

It was necessary to review the entirety of thiscollection for evidence relating to important matters not addressed by Driving Force, such as the fair market value of the trucks. Theunwieldy nature of the resulting trial record has made the resolution of this claim significantly more difficult than it ought to have been. [101] For all of these reasons, I award costs of this action to Driving Force against I Spy on a party-and-party basis. No costs areawarded against Ms. Juneau in her personal capacity. 22. Conclusion [102] Driving Force’s claims against I Spy for breach of contract and conversion are allowed.

Driving Force is awarded damagesagainst I Spy in the amount of $191,941.88. Driving Force’s claims against Ms. Juneau in her personal capacity are dismissed. TheDefendants’ counterclaim is dismissed in its entirety. Driving Force is awarded party-and-party costs of this action against I Spy. Nocosts are awarded against Ms. Juneau in her personal capacity. Heard on the 8th day of September, 2020 to the 10th day of September, 2020. Dated at the City of Edmonton, Alberta this 15th day of December, 2020. N.J. Whitling J.C.Q.B.A.

Appearances: Jose A. Delgado for the Plaintiff G. James Thorlakson for the Defendants