MELODY TAMMY SIERRA JANZ Plaintiff v. WHITEHORSE WHOLESALE AUTO CENTRE LTD., 2016 YKSC 27

SUPREME COURT OF YUKON Citation: Janz v Whitehorse Wholesale Auto Centre Ltd. , 2016 YKSC 27 Date: 20160621 S.C. No. 16-A0005 Registry: Whitehorse Between: MELODY TAMMY SIERRA JANZ Plaintiff And WHITEHORSE WHOLESALE AUTO CENTRE LTD. and EDWIN WOLOSHYN Defendants Before Mr. Justice L. F. Gower Appearances: Melody Tammy Sierra Janz Edwin Woloshyn Appearing on her own behalf Appearing on his own behalf and on behalf of Whitehorse Wholesale Auto Centre Ltd.

REASONS FOR JUDGMENT INTRODUCTION [ 1 ] This is a dispute about whether two lease/purchase agreements regarding two Ford F350 trucks, entered into in May and August 2014 (the “lease agreements”), were subsequently varied by a conversation between the parties in April 2015. The purchaser is the plaintiff, Melody Janz (“Janz”), and the vendor is the defendant, Whitehorse Wholesale Auto Centre Ltd. (“Whitehorse Wholesale”). The second defendant is Edwin Woloshyn (“Woloshyn”), who is the owner and sole director of Whitehorse Wholesale.

All parties are self-represented. [ 2 ] There is no dispute that Janz failed to make numerous payments under each of the lease agreements. However, she says that the conversation in April 2015 resulted in a further agreement between the parties, whereby Whitehorse Wholesale waived the necessity for Janz to make payments until either she returned to work or received settlement money from a personal injury lawsuit, whichever occurred first. I will refer to this as the contract variation issue. Woloshyn disputes making any such agreement or variation.

Accordingly, because of Janz’s defaults under the lease agreements, he seized one of the trucks on March 19, 2016 and the second on April 19, 2016. [ 3 ] Janz filed a statement of claim seeking an order for the return of the trucks, as well as an interim injunction preventing their resale by Whitehorse Wholesale. On April 19, 2016, I made an order setting this matter down for trial.

At that time I also granted an interim injunction preventing Whitehorse Wholesale from selling either truck until a further order of this Court following the trial. [ 4 ] The trial took place on June 8, 2016 and effectively proceeded as a

summary trial. I ordered that the respective affidavits filed by the parties before trial be made exhibits. Janz also testified, along with two additional witnesses for the plaintiff. Woloshyn was the only witness for the defendants. [ 5 ] By the time of trial, Whitehorse Wholesale had filed a counterclaim for the unpaid lease payments, plus interest and other seizure related costs. Janz has filed a statement of defence to that counterclaim.

However, at the trial on June 8, I indicated that I would have to decide the contract variation issue first, because it would only be if I decide in favour of Whitehorse Wholesale on the point that the counterclaim would become relevant. [1] FACTS [ 6 ] Based upon the testimony of the parties and Janz’s husband, Darren Lehune (“Lehune”), as well as the two affidavits from Janz, Woloshyn’s affidavit, Lehune’s affidavit, and the exhibits filed at the trial, I make the following findings of fact.

[ 7 ] On December 19, 2013, Janz had a slip and fall injury and broke her left foot. She retained legal counsel, Debra Fendick, to pursue a personal injury lawsuit against the owner or occupier of the property where the injury occurred. [ 8 ] On May 8, 2014, Janz entered into a lease agreement with Whitehorse Wholesale for a black 2014 Ford F350. After trading in her 2012 Jeep for $29,000, Janz agreed to pay a further $55,776 for the truck by making monthly payments of $664 over 84 months.

Woloshyn was aware of Janz’s foot injury, the lawsuit and the fact that she was not working at the time. [ 9 ] In June 2014, Janz received a letter from her doctor, Dr. Ikeji, that she was fit to return to her regular work as a class one truck driver. [ 10 ] On August 29, 2014, Janz entered into a second lease agreement with Whitehorse Wholesale for a red 2015 Ford F350 with dual rear wheels. After making a $5,000 down payment, Janz agreed to pay a further $82,398.96, by making monthly payments of $980.94 over 84 months.

She also agreed to pay $0.20 per kilometre for each kilometre in excess of 140,000 km over the term of the lease. Woloshyn was aware that Janz was still unemployed at that time. [ 11 ] On November 13, 2014, Janz returned to work as a class one truck driver with Procision Trucking and Mining in Fort Nelson, British Columbia, hauling gasoline from the Fort Nelson area to a gas plant near Fort St. John, British Columbia. She continued with that employment until January 10, 2015, when she was laid off due to a shortage of work.

Procision failed to pay her for the period from January 2-10, 2015. [ 12 ] Janz informed Woloshyn of this issue. Woloshyn responded with words to the effect of “Okay, get me what you can. Don’t worry, something will work out”. Woloshyn also inquired about the status of the lawsuit and how it was coming along.

Janz informed him that she was waiting to see her doctor to see if a specialist was needed, and that her lawyer would not have any new information on the lawsuit until such time as the medical issue was resolved. [ 13 ] For the 2014 Ford, Janz made four consecutive payments of $665 per month from June up to and including September 2014. She then missed two consecutive payments due in October and November 2014. Janz next made a payment of $665 in December 2014, but missed every consecutive month following until making another payment in November 2015.

She then failed to make any further payments up to and including the date of trial. [ 14 ] For the 2015 Ford, Janz made a payment of $985 in September 2014. She then missed her payments due in October and November, until making another payment of $985 in December 2014. Once again, Janz missed her payments due for January, February and March 2015, until making a payment of $985 in April 2015. She then failed to make any further payments up to and including the date of trial. [ 15 ] Around the end of April 2015, Janz saw a new doctor, Dr. Kwong, who recommended an appointment with a specialist, Dr.

Penner, coming from Vancouver to Whitehorse in May 2015 to discuss possible surgery to her foot. Dr. Kwong said that Janz was not allowed to return to work until after she met with Dr. Penner. After this appointment with Dr. Kwong, while travelling in a truck with her then-fiancée, Mr. Lehune [2] , Janz telephoned Woloshyn using the truck’s Bluetooth phone system and notified him that she had been ordered off work until after seeing the specialist.

This is the conversation at issue in this trial. [ 16 ] Janz testified that Woloshyn responded to this information with words to the effect of “Okay, I’ll work with you until you get back to work or until your lawsuit claims settlement comes through, whichever occurs first”. In her second affidavit, Janz deposed that she also asked Woloshyn if he wanted one or both of the trucks back, because she was not able to work and was not sure how long it would be before she could go back to work to continue to make payments.

She further deposed that Woloshyn quickly responded with “No, I do not want the trucks back, I’m sure we can work out some sort of arrangement on payments”. In addition, Janz deposed that she agreed with Woloshyn’s instruction to keep him posted and “in the loop” on her medical, financial and legal situation.

Finally, she deposed that she asked Woloshyn if they needed to write something up and he said that there was “No need to waste paper”. [ 17 ] For reasons which follow, I generally accept this evidence as establishing the nature of the conversation. [ 18 ] When Woloshyn was cross-examined by Janz, he did not remember having a conversation with her about returning the two trucks. However, he did not say the conversation did not occur. [ 19 ] Because the conversation took place over the Bluetooth phone system in the truck in which Janz and Lehune were travelling, Lehune could hear both Janz and Woloshyn.

Lehune deposed in his affidavit that Janz asked Woloshyn if he would wait for payments on the trucks until she was able to return to work or her settlement was reached. He further deposed that Woloshyn agreed to wait for payment, but that Janz was to “keep him in the loop” on her medical situation and with respect to the status of her lawsuit. Lehune also deposed that Janz asked Woloshyn if he was going to write a letter to her concerning this new arrangement and Woloshyn’s response was “Why waste paper?

I call the shots around here, no need”. [ 20 ] Lehune’s testimony was slightly different from his affidavit, but was nevertheless generally consistent. He stated that Janz wanted to make sure that she could continue the agreement she had made with Whitehorse Wholesale or, alternatively, return the trucks. Lehune testified that Woloshyn had no qualms about Janz keeping possession of the trucks and paying him outright from the settlement anticipated from the lawsuit. He stated that there was conversation about Janz being ordered off work.

Lehune testified that when Janz offered to return the trucks, Woloshyn replied with words to the effect of “No, don’t worry about it, we have an agreement”. He further stated that the nature of the conversation was that Woloshyn was going to wait either for Janz to receive money from the lawsuit settlement or for her to return to work, and that the two would keep in touch regarding the progress of either contingency. [ 21 ] On May 5, 2015, Janz had her appointment with the specialist, Dr. Penner, in Whitehorse. Dr.

Penner wrote Janz a note saying “She is to be off work due to left foot injury until recovery from foot surgery is complete”. [ 22 ] Janz remained off work throughout the summer of 2015 and, as I indicated above, she made no further payments on either truck over that time.

[23] On September 30, 2015, Janz had the surgery on her foot. Shortly after that, she telephoned Woloshyn to inform him of thesurgery and Woloshyn requested that Janz provide a letter from Debra Fendrick regarding the status of the lawsuit. [24] On November 10, 2015, Debra Fendrick provided a letter to Whitehorse Wholesale stating the following: We are writing this letter at Melody Janz’s request. Ms. Janz is our client with respect to serious injuries she sustained in a slip and fall in December of 2013. Her injuries have requiredsurgery and prevented her from working and earning an income.

I trust that you will make the necessary arrangements with Ms. Janz so that her vehicle is not repossessed for failure to make paymentinstalments on her lease arrangements while she is recovering from her injuries. [25] Woloshyn did not contact Janz regarding this letter until early March 2016, when he indicated that he wanted a more detailedand irrevocable assurance from Fendrick regarding the payment of the anticipated settlement funds towards the arrears on the leaseagreements.

Janz indicated that Fendrick was away from Whitehorse until mid-April 2016, and that she would not be able to respond toWoloshyn’s request until Ms. Fendrick’s return. [26] As stated above, Woloshyn personally seized the 2014 Ford on March 19, 2016[3], and instructed the deputy sheriff to seize the2015 Ford after the court appearance before me on April 19, 2016.

ANALYSIS [27] Absent the conversation between the parties at the end of April 2015, there is no question that Whitehorse Wholesale has thelegal authority under para. 16 in each of the lease agreements to seize the trucks in the event that the purchaser fails to make the monthlypayments due. That paragraph states:

(16) Default: If the Lessee fails to make any payment under this Lease when it is due, or if the Lessee fails to keep any otheragreement in this Lease, the Lessor may terminate this Lease and take back the Vehicle. The Lessor may go on the Lessee’s property toretake the Vehicle... [28] What then was the nature and legal impact of the April 2015 conversation? [29] As I indicated earlier, I generally accept Janz’s evidence establishing the nature of the conversation between her and Woloshynaround the end of April 2015.

I do so for three principal reasons: 1) Although Woloshyn denied making such an agreement with Janz, he did not deny that portion of the conversation where Janz offeredto return the two trucks. Rather, he testified that he did not remember that portion of the conversation, but not that the conversation didnot occur; 2) Janz’s evidence is substantially corroborated by Lehune.

Although Lehune candidly admitted that he had difficulty rememberingdates and other details, I generally found him to be a credible witness, if not always reliable; and 3) Woloshyn’s conduct, on behalf of Whitehorse Wholesale, in failing to make any demand for payment, or any threat to repossessunder either of the lease agreements, until finally taking action on March 19, 2016, is entirely consistent with Janz’s assertion that heindicated he was not interested in taking possession of the trucks at the end of April 2015, and was still hopeful that his company wouldbe paid out from Janz’s personal injury settlement, or that Janz would recommence making monthly payments once she returned to work. [30] That said, I do accept Woloshyn’s evidence that he was always interested in finding a way to extract some cash from Janz.During virtually all of his conversations with her, he specifically mentioned that the company needed money from her to make good onthe arrears. [31] In any event, the more important question is what the legal effect of the April 2015 conversation is. [32] Janz relies upon an Ontario Supreme Court case entitled In the Matter of: The Mining Act before the Mining and LandCommissioner, (1978) (ON SC), 20 O.R. (2d) 593, in support of her argument that Whitehorse Wholesale ought to beprevented from repossessing the trucks by way of the doctrine of promissory estoppel.

This doctrine was summarized by Grange J. atpara.13, quoting from the English case of Hughes v. Metropolitan Railway: It is my view that the doctrine to be applied whether it be called waiver or promissory estoppel or variation of the contract or simplybinding promises, stems from the words of Lord Cairns in Hughes v. Metropolitan Railway. Co. (1877), 2 App.

Cas. 439 at p. 448: It is the first principle upon which all courts of equity proceed, that if parties, who have entered into definite and distinct terms,involving certain legal results--certain penalties or legal forfeiture--afterwards by their own act or with their own consent, enter upon acourse of negotiation which has the effect of leading one of the parties to suppose that the strict rights arising under the contract will notbe enforced, or will be kept in suspense, or held in abeyance, the person who otherwise might have enforced those rights will not beallowed to enforce them where it would be inequitable having regard to the dealings which have thus taken place between the parties.

That principle was accepted by the Supreme Court of Canada in Conwest Exploration Co. Ltd. et al. v. Letain, (SCC),[1964] S.C.R. 20 at p. 28, [41 D.L.R. (2d) 198 at p. 206,] and in numerous other Canadian cases. In Central London Property Trust Ltd.v. High Trees House Ltd., [1947] 1 K.B. 130, Denning, J., traced the principle first to justify an oral variation of a written contractincluding one required to be in writing to a representation without consideration and to a representation not just of an existing fact but toone as to the future.

The essential features are an unambiguous representation which was intended to be acted upon and indeed was actedupon.

The present rule is now expressed by Snell in his work [Snell's Principles of] on Equity, 27th ed. (1973), p. 563, as follows: Where by his words or conduct one party to a transaction makes to the other an unambiguous promise or assurance which is intended toaffect the legal relations between them (whether contractual or otherwise), and the other party acts upon it, altering his position to hisdetriment, the party making the promise or assurance will not be permitted to act inconsistently with it. (my emphasis) [33] The requirement that the promisee suffer a loss or detriment of some kind as a result of the promise is confirmed in the text, Canadian Contract Law (3rd ed.), by Angela Swan and Jakub Adamski (Markham: Lexis Nexis, 2012), at 2.199: For a particular example of reliance to be entitled to protection, there must be

(1) an act or statement by the representor [promisor]; (2)reasonable reliance by the representee [promisee] on what the other did or said; and (3 a loss or detriment of some kind suffered by therepresentee… [34] I conclude that promissory estoppel does not apply in this case because, firstly, the statements and representations made byWoloshyn in the conversation of April 2015 were ambiguous, uncertain and unenforceable. At that time, Janz did not know for certainwhether she would be able to return to her employment as a class one truck driver following her anticipated surgery.

In addition, therewas no certainty that she would in fact receive a settlement from her personal injury lawsuit and, even to the extent that that was aprobability, there was no guarantee that the amount she would receive would be sufficient to satisfy the arrears on both of the leaseagreements. If I were to accept Janz’s position on the impact of the April 2015 conversation, the result could be that she might be able tocontinue to use the trucks indefinitely without making any payments.

That is an absurd result. [35] Secondly, because of my conclusion immediately above, it was unreasonable of Janz to rely upon these statements andrepresentations by Woloshyn. [36] Finally, Janz did not rely upon Woloshyn’s statements and representations to her “detriment”. On the contrary, she benefited bycontinuing to be able to use each of the trucks while not making any further payments, at least until the initial seizure on March 19, 2016. [37] The case of Dytkowski v Blasiak Trucking Ltd., 1999 CarswellBC 465 (S.C.), is very much on point.

There, the plaintiff was adriver for the defendant, a small trucking company. The plaintiff signed a conditional sale contract to purchase a truck of the defendant’sthat he had been driving for three years. The plaintiff said that the defendant wrongfully seized the truck the following year and soughtdamages for its wrongful seizure. The defendant counterclaimed for the cost of repairs that it said arose from the plaintiff’s negligentoperation of the vehicle.

The plaintiff argued that the agreement for the sale of the truck was made orally, however there was also awritten and signed conditional sale contract. [38] Ralph J., of the British Columbia Supreme Court, concluded that the defendant was entitled to seize the vehicle under theconditional sale contract.

Although the plaintiff, like Janz in the case at bar, asserted the defence of promissory estoppel because thedefendant had waived the requirement for the plaintiff to make payments on numerous occasions, this was dismissed by Ralph J. asfollows: 38 Under paragraph 13 of the conditional sale contract the Seller was entitled to take possession of the vehicle if the Buyer failed tomake any payment. The plaintiff says that, while he had failed to make payments when due, the defendant had stated on numerousoccasions that the plaintiff did not need to keep the monthly payments current at all times.

The plaintiff says he relied on that"representation" and as a result the defendant was estopped from seizing the vehicle. 39 The defendant denies making any such representation… 40 In John Burrows Ltd. v. Subsurface Surveys Ltd. and Murdoch Surveys Ltd. and G.

Murdoch Whitcomb, (SCC),[1968] S.C.R. 607 (S.C.C.) Ritchie J. considered this aspect of equitable estoppel at page 615: It seems clear to me that this type of equitable defence cannot be invoked unless there is some evidence that one of the parties enteredinto a course of negotiation which had the effect of leading the other to suppose that the strict rights under the contract would not beenforced, and I think that this implies that there must be evidence from which it can be inferred that the first party intended that the legalrelations created by the contract would be altered as a result of the negotiations.

It is not enough to show that one party has taken advantage of indulgences granted to him by the other for if this were so in relation tocommercial transactions, such as promissory notes, it would mean that the holders of such notes would be required to insist on the veryletter being enforced in all cases for fear that any indulgences granted and acted upon could be translated into a waiver of their rights to

enforce the contract according to its terms. 41 … [ I]t is my view that what the defendant did in this case was to grant the plaintiff an "indulgence" on more than one occasion to defer his monthly payments when due.

That indulgence did not estop the defendant from exercising its rights under the contract to seize the vehicle in the manner in which it did in this case . … 43 It is my conclusion that the defendant was entitled to seize the vehicle on April 3, 1993, and that it acted within the scope of its contractual rights in doing so. (my emphasis) CONCLUSION [ 39 ] For these reasons, Janz’s claim is dismissed and the interim injunction is terminated. I will remain seized of this matter in the event that Whitehorse Wholesale chooses to pursue its counterclaim.

Any determination on court costs should await the outcome of the counterclaim. ___________________________ GOWER J.