Shawn Johnson First Plaintiff/ DEFENDANT BY Counterclaim And: Andy Johnson Second Plaintiff And: Wayne Johnson D EFENDANT/FIRST PLAINTIFF BY Counterclaim And: Stephen Johnson SECOND PLAINTIFF BY Counterclaim, 2023 NLSC 54

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Johnson v. Johnson , 2023 NLSC 54 Date : April 14, 2023 Docket : 202001G2437 Between: Shawn Johnson First Plaintiff/ DEFENDANT BY Counterclaim And: Andy Johnson Second Plaintiff And: Wayne Johnson D EFENDANT/FIRST PLAINTIFF BY Counterclaim And: Stephen Johnson SECOND PLAINTIFF BY Counterclaim Before: Justice Peter N. Browne Place of Hearing: St. John’s, Newfoundland and Labrador Dates of Hearing: February 1-3, 2023

Summary: The First Plaintiff/Defendant by Counterclaim, Shawn Johnson, and his uncle, Andy Johnson, the Second Plaintiff, sought an order forvacant possession against the First Defendant/First Plaintiff by Counterclaim, Wayne Johnson, of a residential property. Wayne Johnsoncounterclaimed saying he had a life interest in the residential property by way of oral contract and the equitable doctrine of partperformance.

As a secondary aspect of his counterclaim, Wayne Johnson and the Second Plaintiff by Counterclaim, Stephen Johnson, sought a twothirds interest in a company in which Shawn Johnson was the sole shareholder on the basis of an oral contract and part performance. The Court held that Shawn and Andy Johnson established, on a preponderance of evidence, that they were the legal title holders of theresidential property and were entitled to an order for vacant possession.

It dismissed the counterclaim for a life interest in the residentialproperty and a two thirds interest in Shawn Johnson’s company on the basis that the evidence did not support the finding of an oralcontract by way of part performance. Appearances: Adam N. Foote Appearing on behalf of the Plaintiffs/ Defendants by Counterclaim Daniel W. Bennett Appearing on behalf of the Defendants/Plaintiffs by Counterclaim Authorities Cited: CASES CONSIDERED: Suley v. Suley, 2013 NLTD(G) 146; Genge v. Dredge, 2008 NLTD 172; Hollett v. Hollett (1989), (NL SC), 106 Nfld. & P.E.I.R. 271, 39 A.C.W.S. (3d) 893 (Nfld.

S.C. (T.D.)); Steadman v. Steadman (1974), [1976] A.C.536, [1974] 2 All E.R. 977 (H.L.); Cleary v. King, 2014 NLCA 33; R. v. Neary, 2000 NFCA 22; Faryna v. Chorny, (BC CA), [1952] 2 D.L.R. 354, 1951 CarswellBC 133 (C.A.); R. v. Dinardo, 2008 SCC 24; R. v. C.H. (1999), (NLCA), 182 Nfld. & P.E.I.R. 32, 44 W.C.B. (2d) 162 (Nfld. C.A.) STATUTES CONSIDERED: Statute of Frauds 1677, 1677 (29 Cha. 2 C.3) (U.K.) RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch.

D REASONS FOR JUDGMENT Browne, J.: INTRODUCTION [1] This action arises out of a dispute between the First Plaintiff/Defendant by Counterclaim, Shawn Johnson (“Shawn”), theSecond Plaintiff, Andy Johnson (“Andy”), the Defendant/First Plaintiff by Counterclaim, Wayne Johnson (“Wayne”), and the SecondPlaintiff by Counterclaim, Stephen Johnson (“Stephen”).

[ 2 ] Shawn and Andy are the registered owners of a property situate at 101 Hillview Drive West, in the City of St. John’s, in the Province of Newfoundland and Labrador (the “Hillview Property”). Wayne currently resides at the Hillview Property and refuses to vacate. Shawn and Andy seek an order for vacant possession. [ 3 ] Wayne acknowledges that Shawn and Andy are the registered owners of the Hillview Property.

However, in his counterclaim, Wayne alleges that he conveyed the proceeds from the sale of his matrimonial home (the “Dillon Property”) to Shawn in exchange for a one-third equity stake in Shawn’s purchase of the company now known as 8917 Newfoundland and Labrador Inc. (“8917 Inc.”), as well as a life interest in the Hillview Property. [ 4 ] Shawn alleges in his defence to the counterclaim that Wayne had no connection with, or involvement in, the purchase and establishment of 8917 Inc., or that he gave Wayne the right to reside in the Hillview Property in perpetuity.

BACKGROUND The Hillview Property [ 5 ] Shawn purchased the Hillview Property on December 21, 2007 from Johnny Hynes for the sum of $40,000. The Deed of Conveyance was registered in the Registry of Deeds on March 20, 2008 as Registration No. 243107. [ 6 ] On September 18, 2008, Shawn Johnson as Vendor conveyed his interest in the Hillview Property to himself and Andy (Shawn’s uncle) for the consideration of $1.00.

The Deed of Conveyance was registered on September 29, 2008 as Registration No. 278524. [ 7 ] The Conveyance adding Andy was necessary to allow Shawn to obtain a mortgage on the Hillview Property bearing Registration No. 278524. The mortgage between Shawn and Andy as Mortgagors, and Computershare Trust Company of Canada as Mortgagee, was registered on September 29, 2008 (the “Mortgage”).

A separate arrangement between Shawn and Andy included the requirement that Shawn be responsible for all costs (mortgage and otherwise) of the Hillview Property, with all proceeds on its sale going to Shawn. [ 8 ] Shawn lived at the Hillview Property for a period of time in 2008 and 2009, while he built and renovated other properties. Shawn also renovated the Hillview Property. Once the Hillview Property renovations were complete, the house was ready for occupancy. [ 9 ] Shawn regularly allowed members of his family, including his father, Wayne, to stay temporarily at the Hillview Property beginning in 2009.

His long term plan was to keep the Hillview Property until the mortgage was paid off and then sell it. [ 10 ] In 2014-2015, while Wayne was still occupying the Hillview Property, Shawn suspected he was involved in illegal activity so he asked Wayne to vacate the property. Shawn claims that from this point onward, he asked Wayne to leave on numerous occasions but Wayne refused and, according to Shawn, has made threats of violence against him and his family. [ 11 ] On May 15, 2020 Shawn served Wayne with an eviction notice through the intermediary of legal counsel.

In response, Wayne informed Shawn he would not leave the Hillview Property. Shawn claims that following service of the notice Wayne again made threats of violence against him and his family. Several years prior, Shawn had directed Newfoundland Power to cut the electricity to the residence, which they did, but he understands that Wayne is supplying electricity to the Hillview Property by way of a gas-powered generator. The Dillon Property [ 12 ] In March 2010, Wayne bought out his ex-wife’s interest in their former matrimonial home situate at 16 Dillon Crescent, St.

John’s, in the Province of Newfoundland and Labrador (the “Dillon Property”). In April 2010, Wayne conveyed his interest in the Dillon Property to Shawn for the “stated value” of $50,000.00. It is Wayne’s belief that no actual money changed hands. [ 13 ] Shawn eventually sold the Dillon Property on or about June 11, 2010 for the sum of $205,000.

Wayne argues that Shawn netted a substantial profit from this sale that ultimately would have been his had he not made an arrangement (“the Arrangement”) with Shawn for a one-third equity stake in 8917 Inc., as well as the right to a life interest in the Hillview Property.

The Arrangement [ 14 ] Wayne alleges that the transfer of the matrimonial home to Shawn was made in consideration of a larger plan involving the Hillview Property and the purchase of companies and assets from Paul Billard involving Wayne , Stephen (his other son), and Shawn, with the latter component being central to his counterclaim . [ 15 ] According to Wayne, the Arrangement saw him move into the Hillview Property and reside there as long as he wished without an obligation to pay rent to Shawn .

He now claims a life interest in the Hillview Property after having gifted the consideration (and/or profit or equity) of the Dillon Property. Wayne acknowledges there is no deed or other documentary evidence showing or confirming the Arrangement. [ 16 ] The other aspect of the Arrangement was that Shawn could use the funds or profit from the sale of the Dillon Property for the purchase of the companies known as Paul Billard Limited and Jen - Mar Concrete.

According to Wayne, he, Shawn , and Stephen all agreed that they would purchase these companies , with the primary asset being the real property situate at 1 Riverview Avenue, Mount Pearl (“the Riverview Property”) currently held in the name of 8917 Inc. [ 17 ] Wayne says he, Shawn, and Stephen had all rented the Riverview Property from Paul Billard for a number of years prior to putting together a deal to purchase his companies and the property. Wayne, Shawn and Stephen all agreed orally to share in the profits,

and losses, of these entities. He claims he relied upon Shawn’s word that he would follow through on this promise. [18] Even though Shawn was the lone signatory on all legal paperwork, including the shares in Paul Billard Limited and Jen-MarConcrete, Wayne maintains the beneficial ownership of those shares was for himself, Stephen and Shawn. The Arrangement was puttogether from February 2010 through April 2010, with the Dillon Property being sold in June 2010.

The Riverview Property [19] On January 8, 2009 Shawn signed an Agreement of Purchase and Sale in respect of company shares for what is now known as8917 Inc. and Jen-Mar Concrete, along with property situated at 1 Riverview Avenue, Mount Pearl. The transaction closed on May 30,2009 for the purchase price of $425,000. No documents flowing from the purchase contain any reference to Wayne as purchaser,guarantor, shareholder, director, or officer of either 8917 Inc. or Jen-Mar Concrete Limited. ISSUES 1.

Does Wayne have a life interest in the Hillview Property and have a legal or equitable entitlement to reside there rent-free? 2. Do Wayne and Steven have a legal or equitable interest in 8917 Inc. and the Riverview Property? REASONS [20] For the reasons that follow, Shawn and Andy have established on a preponderance of evidence that: (

a) Wayne does not have alife interest in the Hillview Property; and (

b) Wayne and Stephen do not have a legal or equitable interest in the Riverview Property of8917 Inc. THE LAW The Objective Theory of Contract Formation [21] In Suley v. Suley, 2013 NLTD(G) 146, at paragraphs 12 to 13, Whalen, J. (as he then was) summarized what is known as theobjective theory of contract formation: 12 S.M. Waddams, in his text The Law of Contracts, 5th ed. (Toronto: Canada Law Book, 2005), deals with this objective theory ofcontract formation. Waddams is quoted in the case of Law Society of Saskatchewan v. McLeod (1996), (SK KB),115 Sask.R. 144, [1993] S.J.

No. 589 (Q.B.), at paragraph 19 as saying: "The principal purpose of the law of contracts is to protect reasonable expectations engendered by promises. It follows from this purposethat the law is not so much concerned to carry out the will of the promisor as to protect the expectation of the promisee. This is not,however, to say that the will of the promisor is irrelevant. Every definition of contract, whether based on agreement or on promise,includes a consensual element.

But the test of whether a promise is made, or of whether assent is manifested to a bargain, does not andshould not depend on an enquiry into the actual state of mind of the promisor, but on how the promisor's conduct would strike areasonable person in the position of the promisee." 13 In the realm of private law a contract has to be interpreted on the basis of the intent of the parties at the time the contract wassigned and not at the time of any alleged breach. See: McDonald v. Sea Crest Holdings Ltd., 2009 NLTD 101, 60 B.L.R. (4th) 208 atpara. 10; also, Davidson v.

Allelix Inc. (1991), (ON CA), 7 O.R. (3d) 581, [1991] O.J. No. 2230 (C.A.) at p. 587. The Statute of Frauds and Oral Contracts [22] The Statute of Frauds 1677, 1677 (29 Cha. 2 C.3) (U.K.) (the “Statute of Frauds”) was first enacted in 1677 in England and isin effect in Newfoundland and Labrador by virtue of having been enacted prior to the specific date of reception of English law in ourjurisdiction. Butler, J. (as she then was) stated in Genge v.

Dredge, 2008 NLTD 172, at paragraphs 75 to 76: 75 The Statute of Frauds, supra, was first enacted in 1677 in England and is in effect in this Province by virtue of having beenenacted prior to the specific date of reception of English law for our jurisdiction. (Swan, Canadian Contract Law, 1st ed. at page 274footnote 7). "While much has changed since 1677, there are still situations in which certainty and deliberation are to be promoted, andcontracts have to be in writing." (Canadian Contract Law, supra, at page 273). 76 At page 274 Swan states:

When enacted in 1677, the Statute of Frauds, as stated in its

preamble, was aimed at the "prevention of many fraudulent practices whichare commonly endeavoured to be upheld by perjury and subornation of perjury". The method of achieving this was the requirement thatcertain kinds of transactions had to be evidenced by a written document, signed by the person being sued. And at page 276 he concludes: As will be seen, the Statute of Frauds is in some respects quite inappropriate now.

In fairness to those who drafted it, it is unlikely thatany legislation passed more than 300 years ago to deal with problems that existed at that time and in the legal context which createdthose problems would work well now. [23] Specifically, the Statute of Frauds states at Clause IV: IV. ... no action shall be brought ... upon any contract for Sale of Lands, Tenements or Hereditaments, or any Interest in or concerningthem; ... unless the Agreement upon which such Action shall be brought, or some Memorandum or Note thereof, shall be in Writing,and signed by the Party to be charged therewith, or some other Person thereunto by him lawfully authorized… (emphasis added) [24] In Hollett v.

Hollett (1989), (NL SC), 106 Nfld. & P.E.I.R. 271, 39 A.C.W.S. (3d) 893 (Nfld. S.C. (T.D.))(“Hollett”), at paragraphs 27 to 31, the Court discussed the sufficiency of the memorandum of agreement referenced in the Statute ofFrauds: [27] (ii) Sufficiency Of Memorandum.

Section IV provides that no action shall be brought on a contract relating to land unless thecontract is sufficiently evidenced in writing. Failure to produce evidence of writing sufficient to satisfy the Statute renders the contract, inthe absence of appropriate evidence of part performance, unenforceable. [28] No particular form is stipulated by the Statute with respect to the writing required and the memorandum may be constructedfrom several connected papers: Millar v. Whelan (1861), 4 Nfld. L.R. 561.

The note or memorandum may also come into existence afterthe formation of the contract, provided that it comes into existence prior to the commencement of action: Garland v. Jerrett (1989), (NL SC), 77 Nfld. & P.E.I.R. 252; 240 A.P.R. 252 (Nfld. T.D., Cameron, J.). [29] The memorandum need only identify the essential terms of the contract which are usually “the parties, the property and theprice”: McKenzie v. Walsh, (SCC), [1921] 1 W.W.R. 1017; 61 S.C.R. 312; 57 DIR. 24, per Davies, C.J.C., at 25.

Theseare the only material terms that must be included; however, if there are other specific terms which are being relied upon, there must beevidence in the memorandum of those as well: Garland v. Jerrett, supra. [30] Where the material terms can be located in the document, any ambiguity in them can be clarified by parol evidence. Thisincludes parol evidence to identify the specific property in question. In Dynamic Transport Ltd. v. O.K. Detailing Ltd. (1978), (SCC), 20 N.R. 500; 9 A.R. 308; 6 Alta.

L.R.(2d) 156; 85 D.L.R.(3d) 19 (S.C.C.), Dickson, J„ stated at p. 23 D.L.R.: “On the issue of certainty of description of land, courts have gone a long way in finding a memorandum in writing sufficient to satisfythe Statute of Frauds. The judges have consistently attempted to ascertain and effectuate the wishes of the parties, undeterred by lacunasin the language in which those wishes have been expressed.” [31] In appropriate cases, the courts will also imply terms.

Even if a specific price is not named, this will not necessarily be adeficiency since, in appropriate cases the courts will imply that a term that a reasonable price was to be paid: Millar v. Whelan, supra. [25] The case law surrounding the Statute of Frauds also contemplates the role of equity in transactions involving land. Hollett isalso instructive when it comes to addressing the role of equity where an alleged agreement in respect of land has not been formalizedthrough written means. [26] At paragraphs 117 to 118 in Hollett, Green, J. (as he then was) remarked on the tension between the

interpretation of the lawand the informal arrangements that seem typical in rural parts of Newfoundland and Labrador: 117. This case in many ways typifies the informal arrangements which frequently are involved in land holding in ruralNewfoundland. It seems to me that a court ought to be sensitive to the fact that land holding, from a practical point of view, is oftenbased upon arrangements which do not fit neatly into formal legal categories.

If courts take too formalistic an approach to theapplication of property law concepts in such circumstances, the result may be the frustration of normal social expectations. I note that inother contexts relating to real property law in Newfoundland, the courts have in fact modified traditional legal principles to take accountof local conditions, for example, with respect to dispensing with the necessity of a requirement for a formal sealed deed to constitute aconveyance, as in Butt v. Humber (1976), 6 R.P.R. 207 (Nf S.C.).

118. It might be tempting from this to conclude that the court ought to have a broad discretion in such cases to adjust the rights of theparties according to what seems to be fair. That, of course, is not available to the court.

The categories of legal principles must beapplied, but in applying them the court ought to fashion those principles to take account of local conditions and to exercise care, where ithas a choice of categorization, to ensure that the category which most accords with the expectations of the parties is used. [27] A court of equity may enforce an agreement if there is evidence of part performance. Hollett adopts the test prescribed inSteadman v.

Steadman (1974), [1976] A.C. 536, [1974] 2 All E.R. 977 (H.L.) (“Steadman”), which says “… part performance will besufficient if, on balance, the acts in question indicate some contract between the parties and are consistent with the oral contract alleged.” [28] Using the test outlined in Steadman, the Court in Hollett further considered whether part performance had been established.Green, J. identified the payment of the purchase price, acknowledged by the defendant, as well as the acts of the plaintiff entering uponthe property, and commencing, with the help of the defendant, the excavation of a house basement.

Using the Steadman test, these twoacts, taken together, were enough to meet the threshold of part performance. [29] Green, J. then went on to explain that the law of part performance, as well as the applicable legal test, is an exception to theStatute of Frauds, and the rule that contracts in relation to land and/or interests in land must be in writing.

He stated at paragraphs 39 to40, and 42, of Hollett, as follows: (iii) Part Performance 39 Where the equitable doctrine of part performance is applicable, a contract involving land which is not evidenced by amemorandum in writing sufficient to satisfy the Statute may nevertheless be enforced in equity. 40 The difficult question is what acts of part performance are sufficient to take the contract outside the writing requirements of theStatute? There has not been a uniform test propounded in the cases.

The traditional test is one that requires the acts of part performanceto be "unequivocally referable" to the alleged contract: Maddison v. Alderson (1883), 8 App. Cas. 467; Deglman v. Guaranty Trust Co.of Canada, (SCC), [1954] S.C.R. 725.

A more recent, and liberal, test has now been enunciated in England in Steadman v.Steadman, [1976] A.C. 536 (H.L.), which suggests that part performance will be sufficient if, on balance, the acts in question indicatesome contract between the parties and are consistent with the oral contract alleged. … 42 In view of the recent tendency of courts in this jurisdiction to apply the more liberal Steadman approach and in the absence of apost-Steadman decision of the Supreme Court of Canada rejecting that approach, I intend to apply that approach in this case. [30] In Cleary v.

King, 2014 NLCA 33 (“Cleary”), at paragraph 50, the Court of Appeal subsequently adopted the liberal test fromSteadman and Hollett. Using this test, it concluded the contract in respect of an alleged agreement to purchase land was enforceable,notwithstanding the Statute of Frauds. Rowe, J.A. (as he then was) held the parties’ acts were enough to satisfy the doctrine of partperformance. These acts included: (

a) The plaintiff approaching the defendants and proposing he would bid at the auction on their behalf, on the condition theywould convey a portion of the land to him; (

b) Attending at the auction and successfully bidding on the land; (

c) Attending to the arrangements which resulted, several years later, in a Deed of Conveyance transferring the land to thedefendants; (

d) Working with the defendants on developing parts of the land, partly in expectation he would be building his retirement homeon the land, and partly for their benefit, as a good neighbor. [31] The Court concluded there was clearly a contract between the parties that was consistent with the oral contract alleged by theplaintiff. Accordingly, the defendants were liable in damages for breach of the obligation to convey the land in question to the plaintiff.The plaintiff received an award of the value of the land as it was agreed by the parties, but not an interest in the land itself.

The Law on Credibility [32] Both counsel agree this case turns on the evidence of the parties and whether the independent documents that were produced asexhibits support a finding there was an oral contract between Shawn and Wayne (

i) to give Wayne a life interest in the Hillview Property;and (ii) to give Wayne and Stephen a one third interest each in the Riverview Property.

[33] Shawn’s counsel argues the only reliable and neutral witness testimony the Court can rely upon in determining the existenceand nature of the oral contracts at issue is that of Andy Johnson and Gail Locke. [34] An assessment of any witness's credibility involves an assessment of (

a) the witness's honesty (his belief in the truth of what heis saying); and (

b) the reliability of the witness's evidence (his ability to remember and testify accurately). [35] In addressing the credibility of each of the witnesses, I should take into account the following considerations:

a) What is the witness's demeanour? While demeanour is important, it is not the sole or most important factor in determiningcredibility. Findings of credibility should not be made on the witness's demeanour alone (see para. 27 of R. v. Neary, 2000 NFCA 22, asper O’Halloran, J.A. at p. 357 in Faryna v. Chorny, (BC CA), [1952] 2 D.L.R. 354, 1951 CarswellBC 133 (C.A.);

b) Is the evidence consistent with the witness's other statements? How significant are the differences and are they adequatelyexplained (see R. v. Dinardo, 2008 SCC 24)?

c) Does the evidence have an internal consistency and logical flow (see R. v. C.H. (1999), (NL CA), 182 Nfld. &P.E.I.R. 32, 44 W.C.B. (2d) 162 (Nfld. C.A.)?

d) Does the evidence make sense in light of the preponderance of probabilities which a practical and informed person would findreasonable given the particular place and condition (see Faryna v. Chorny)? Issue 1: Does Wayne have a life interest in the Hillview Property and have a legal or equitable entitlement to reside there rent-free?

Positions of the Parties Shawn’s Position [36] Shawn’s counsel distinguishes Hollett from the present case by pointing out that the Court relied on four receipts, that whenread together, were found to be a sufficient written memorandum to satisfy the Statute of Frauds. [37] In Hollett, each receipt contained amounts which totalled the purchase price alleged by the plaintiff, and each contained anotation “for payment on land” and an acknowledgement that the defendant was in receipt of funds.

As a result, the Court held thesereceipts established the parties to the contract, the total consideration and the subject matter of the contract. [38] No such evidence exists in this case. Wayne, while claiming to have directed, assisted, and contributed toward the purchase ofthe Hillview Property and 8917 Inc./the Riverview Property, cannot identify with any particularity the amount of funds contributed, themanner in which they were transmitted, and any other pertinent details surrounding his involvement in either purchase.

In short, there isa general vagueness on the material terms of the alleged oral contract. [39] In fact, all the documentary evidence points to the opposite conclusion. The deed of conveyance for the Hillview Propertyshows Shawn and Andy are the lawful owners. The documents tendered in the purchase of companies and assets from Paul Billard showShawn financed the purchase and became the sole director of Jen-Mar Concrete Limited and 8917 Inc.

Wayne’s Position [40] Wayne’s counsel summarizes the legal test for part performance as an exception to the Statute of Frauds, as follows: Part performance will be sufficient if, on balance, the acts in question indicate some contract between the parties and are consistent withthe oral alleged contract. [41] In this case, Wayne asserts there was an oral contract with Shawn that following Wayne’s transfer of title to the Dillon Propertyto Shawn, Shawn would allow Wayne to reside in the Hillview Property on an indefinite basis. Wayne relies on the following evidence: i.

He conveyed the Dillon Property for an amount lower than the stated value (sold for $50,000), leaving Shawn withequity in the range of $150,000, and he began residing at the Hillview Property from around this time-period to present day; nearly 13years rent-free. ii. Shawn’s first attempt to remove Wayne from the Hillview Property was through his solicitor on May 15, 2020. Theeviction notice did not reference rent payments or monies owing. iii. Wayne argues that a logical determination for this Court to make is that his actions are absolutely consistent with anoral contract.

His only mistake is that he trusted his son to make good on his word. iv. The absence of a finding that there was an oral contract would mean Wayne is out funds and resources in the range of$150,000 from the transfer of the Dillon Property. This would leave Wayne without a life interest in the Hillview Property and facingeviction even though he made part performance. Analysis Oral Contract and Part Performance [42] Sadly, this case is a “he said/he said” dispute pitting the word of a son against that of his father and brother.

Overall, theevidence points to a family that made arrangements between themselves through a series of oral agreements and cash dealings. As theirrelationship broke down so too did their previous arrangements.

[ 43 ] According to Shawn, he and Wayne orally agreed that Wayne was only to occupy the Hillview Property until he was able to get back on his feet following a period of incarceration that ended in 2008. Shawn testified that on occasions he allowed various family members, including Stephen and an aunt and uncle, to stay there. He refused to accept any money from Wayne because he was afraid Wayne would lay claim to the property. Nor did he make any promises to him about this being a permanent living arrangement. [ 44 ] Wayne disputes this

interpretation and argues there was an oral agreement for a life interest in exchange for giving Shawn title to the Dillon Property valued at around $50,000. He says he received no money from Shawn, just a promise he could live at the Hillview Property for the rest of his life. The only documentary evidence Wayne could point to in support of the oral agreement is Exhibit S.J. #7 – the title deed from Wayne to Shawn for the Dillon Property. [ 45 ] On cross-examination, Wayne was asked what were the words Shawn used and what did he understand them to mean?

In response, Wayne testified that Shawn told him he would allow him to live there “for as long as you want”. He testified he interpreted this as meaning they had a deal whereby his transfer of title to the Dillon Property to Shawn entitled him to live at the Hillview Property as long as he desired, or until he died, with no set termination date. Wayne subsequently volunteered that he was not able to say what Shawn was thinking when he made this promise, but in support of his position he relies on the following evidence: i.

He conveyed the Dillon Property for an amount under the stated value (sold for $50,000), leaving Shawn with equity in the range of $150,000. ii. When shown Exhibit S.J. #6 (a letter from a law firm representing Shawn) he agreed it was a letter dated May 15, 2020 telling him he was evicted. Wayne testified this was the first formal notice he ever received to vacate and it was 8 years after he moved to the Hillview Property. However, on cross-examination, he agreed that it was not the first time Shawn asked him to leave the property.

He acknowledged that it was possible Shawn told him verbally to leave prior to the letter but he could not recall the dates when this occurred. iii.

The testimony of Stephen that in 2008 Wayne started residing at the Hillview Property and that Wayne told him that Shawn said he could live there as long as he wanted. [ 46 ] Wayne’s counsel acknowledged an assessment of credibility was necessary to overcome the burden imposed by the Statute of Frauds , but argues Wayne’s evidence falls squarely with the Steadman test adopted in Hollett . [ 47 ] Shawn’s counsel argues there is no objective evidence to support Wayne’s testimony.

Instead, when Shawn’s testimony and that of his witnesses is combined with the documentary evidence it points to the opposite conclusion: i. The Deed of Conveyance for the Hillview Property shows Shawn and Andy are the lawful owners (see S.J. #3 - Deed transferring the property to Shawn and Andy); ii. The Dillon Property which belonged to his parents went into foreclosure for the first time in 2007. Shawn paid his mother $2,000- $3000 and then began making bi-weekly payments of $1000 per month (previously the mortgage was $500 a month) which cost him $36,000. iii.

Eventually, his mother moved out of the Dillon Property and stopped paying the mortgage so he paid $66,000 to the Bank of Nova Scotia (“BNS”) to stop the second foreclosure and then carried out renovations of around $40,000. The renovations included kitchen cabinets, hardwood flooring and a new bathroom in the basement. iv. In April 2010, Wayne conveyed title to the Dillon Property to Shawn (see Exhibit S.J. #7). Shawn sold the property in June 2010 for $205,000 (see Exhibit S.J. #8). Using the proceeds from the sale he purchased a 2010 GMC truck for Wayne at $27,000 and a cabin cruiser boat for $10,000-$13,000.

He also purchased Stephen a 2007 Chevrolet truck for $25,000. Shawn testified he did not make any money on the sale of the Dillon Property. Assessment of Credibility [ 48 ] Given the overall tenor of the evidence presented by the parties and general case law on credibility, I am unable to rely on the demeanor of either Shawn, Wayne or Stephen as they have vested interests in the outcome of the trial. Therefore, I must answer the following three questions in order to determine if there was an oral contract and, if so, what were its terms.

Question 1: Is either Shawn’s or Wayne’s evidence consistent with the testimony of other witnesses? Answer: Shawn’s is; Wayne’s is not. Shawn’s evidence that there was no oral contract giving Wayne a life interest in the Hillview Property is consistent with the testimony of his mother, Gail Locke, and his uncle Andy. Testimony of Gail Locke [ 49 ] I found Ms. Locke to be credible and reliable. She testified that when she and Wayne purchased the Dillon Property in 1998- 1999 the monthly mortgage payment was around $500 and the balance owing on the mortgage was $70,000.

She believed they made a $5000 down payment at the time of purchase. [ 50 ] Several years later they got into financial trouble because they had numerous lines of credit and credit cards with a lot of debt owing. Gail and Wayne later separated and divorced. As part of the terms of the settlement Wayne agreed to pay Gail $25,000 towards the debt owing in her name.

He eventually did, but took a long time to pay it off. [ 51 ] She confirmed Shawn’s evidence that there were two foreclosure proceedings and Shawn gave them the money to pay for both. [ 52 ] On the first foreclosure, Shawn gave them the money and started making double the monthly mortgage payments to make up

the difference (see Exhibit G.L. #1). [ 53 ] On the second foreclosure, Shawn paid off the $66,000 balance owing on the mortgage on their behalf. On the advice of Wayne’s lawyer, Gail conveyed the Dillon Property to Wayne for $25,000, being the amount Wayne was to pay her towards their matrimonial debt (see Tab 33, Exhibit S.J. #2). Ms. Locke recalled they were going to lose their matrimonial house in any event, so she and Wayne agreed that Wayne would transfer the Dillon Property to Shawn for his own purposes.

Shawn would take over the house and make renovations and sell it. [ 54 ] On cross-examination, Wayne’s counsel challenged Ms. Locke saying that part of the arrangement for the transfer of the Dillon Property was that Wayne would get to live in the Hillview Property in exchange for the transfer of the Dillon Property. In response, Ms. Locke said “No”, pointing out that Shawn paid for work to the house and for the foreclosures. When pressed further she stated “I know Shawn paid”. Testimony of Andy Johnson [ 55 ] I also found Andy to be credible and reliable as a witness. He is a retired bosun from the Coast Guard.

Wayne is his biological brother but they did not meet until Andy was 18. Andy knew Johnny Hynes as he was his foster brother. [ 56 ] Around 2007, Johnny was having financial troubles so Andy gave Johnny a loan of $15,000 to pay the CitiFinancial mortgage on the Hillview Property. He knew Johnny wanted to sell the property because he needed money and the house needed work. He also knew Shawn wanted to get into the home renovation business and didn’t have the credit. [ 57 ] The arrangement was that the purchase price for the Hillview Property was to be $75,000, but the deed would state $40,000.

Shawn paid Johnny $40,000 himself, Andy paid $15,000 (see Exhibit A.J. #1), and Shawn bought Johnny a house in Stephenville for $20,000. Shawn paid Andy back in installments over the first year. Andy also agreed to act as a co-signor on a mortgage Shawn needed to get on the property in order to get more credit. He agreed to do so as long as Shawn paid all costs including the monthly mortgage payments. If he did, Shawn would keep the proceeds of any sale of the property. [ 58 ] Andy testified he was never aware of any arrangement between Shawn and Wayne regarding a life interest in the Hillview Property.

Question 2: Does the evidence have an internal consistency and logical flow? Answer: The evidence of Shawn and Gail has an internal consistency and logical flow, whereas Wayne’s does not. [ 59 ] During the years of 2005-2008, Wayne and Gail were in serious financial trouble with extensive personal credit debt. On top of this, they were unable to make their monthly mortgage payments on the Dillon Property.

Wayne was convicted of criminal offences on September 14, 2007 and received 14 months incarceration. [ 60 ] On cross-examination, Wayne acknowledged he was still serving time at the time of the sale of the Hillview Property to Shawn, and following his release he lived at Howard House for approximately 6 months. [ 61 ] On cross-examination, Shawn admitted that while Wayne was living at Howard House in 2008, Wayne helped him with some of the renovations he made to the Hillview Property, but he was paid in cash (approximately $800 a week) as an employee.

Shawn acknowledged he did a lot of business in cash which he withdrew from his bank accounts. Wayne continued to work for Shawn until he fired him in 2015. [ 62 ] At the heart of Wayne’s claim that there was partial performance is his evidence that the consideration used in exchange for his life interest in the Hillview Property was the purchase price of $50,000 noted in the deed of conveyance for the Dillon Property.

Wayne maintained during his evidence he was never paid this money (see Tab 35, S.J. #7). [ 63 ] Wayne claimed in cross-examination that he could have kept the Dillon Property for himself as he had the money, but chose not to. Instead, he decided to sell it to Shawn, saying there was nothing in it for him if he did keep it. He signed the deed of conveyance to Shawn when the Dillon Property was ready to move into in exchange for Shawn’s oral promise to allow him to live at the Hillview Property. [ 64 ] I find there is no internal consistency or logical flow to Wayne’s evidence.

If Wayne had the money to pay what was owing on the mortgage then he could have kept the freehold to the Dillon Property in his own name and would not have to depend on Shawn’s word that he had a life interest in the Hillview Property. [ 65 ] Instead, what is logical and consistent is the evidence from Shawn and Gail that Wayne and Gail were heavily in personal debt and could not afford to keep the Dillon Property in their names. Shawn saved them from foreclosure twice, and on the second occasion paid off the mortgage and started making renovations to the property.

Gail confirmed that when she transferred her interest to Wayne as part of their divorce she and Wayne agreed that Wayne would eventually convey the Dillon Property to Shawn because of all the money Shawn had put into the property. [ 66 ] Shawn’s evidence was that he put $ 36,000 on the mortgage following the first foreclosure, $66,000 on the second foreclosure and $40,000 in renovations before he sold it for $205,000.

This was corroborated by Gail. [ 67 ] Shawn also testified that he did not make any profit from the sale as he purchased a truck and boat for Wayne, costing somewhere around $37,000-$40,000, and a truck for Stephen costing around $25,000. This evidence was also corroborated in part by Wayne who confirmed that Shawn bought a truck for him after the sale of the Dillon Property, but he thought it was for his company Wayne and Sons.

Question 3: Does Wayne’s evidence make sense in light of the preponderance of probabilities which a practical and informed person would find reasonable given the particular place and condition? Answer: The answer is “no”.

A practical and informed person would not find on a preponderance of probabilities that Wayne’s evidence reasonably established the necessary requirements for the doctrine of part performance. [ 68 ] At paragraph 13 of Suley , the Court noted that a contract has to be interpreted on the basis of the intent of the parties at the time the contract was signed, and not at the time of any alleged breach.

At paragraph 50 of Cleary, the Court of Appeal adopted the liberal test from Steadman and Hollett stating that part performance will be sufficient if, on balance, the acts in question indicate some contract between the parties and are consistent with the oral contract alleged. [ 69 ] Looking at the evidence in its entirety, I find the following supports my answer: • Wayne testified he moved to the Hillview Property in 2008 after Shawn and Stephen moved out.

He denied Shawn’s evidence that he spent a number of years living in the Goulds with his ex-girlfriend, but acknowledged that he did spend time there. • During cross-examination, Wayne was asked his response to Shawn’s evidence that his understanding was he could stay in Hillview Property temporarily until he got back on his feet. Wayne responded by saying the deal with Shawn was “for as long as you want”. He interpreted this as meaning he could be there as long as he desired or until he died, as there was no set end date.

He then volunteered that he could not say what Shawn was thinking and that he could have gone back to the Dillon Property as he didn’t need to be there. • Wayne testified in chief the arrangement was that he was to pay for the utilities while Shawn paid the mortgage. In 2015, there was a falling out where Shawn did not want anything to do with Wayne, Gail or Stephen and he began telling Wayne to move out.

Wayne’s response to Shawn was he wasn’t moving. • In 2016, Shawn had Newfoundland Power cut the electricity to the property so Wayne has used woodstoves and a gas generator for electricity and heat since. • When shown the eviction letter dated May 15, 2020 (see Exhibit S.J. #6), Wayne agreed he received the letter evicting him but stated this was 8 years after he moved in.

He later agreed that it was not the first time Shawn asked him to leave and that it was possible that Shawn told him so verbally, but he cannot recall. [ 70 ] Whereas, when Wayne’s evidence is compared to Shawn’s evidence, Shawn’s evidence is more in line with what a practical and informed person would find reasonable: • Shawn testified Wayne moved into the Hillview Property after he was released from jail in 2008. He told Wayne that he could stay there until he (Wayne) got back on his feet. He did not make any promises to Wayne about any permanent living arrangement.

Instead, he tried to get Wayne back on track so he also gave him a job with his construction company. • Shawn considers Wayne a violent man so he has not been on the Hillview Property since 2014. He described occasions where Wayne has pulled a gun on him, drove at him with his truck and other instances of threats and bullying. While the relationship starting deteriorating before 2015, things “blew up that summer and he felt his life was in danger”.

Wayne would show up at his place of business unannounced and threaten his employees. • Since then, Shawn has tried various measures to get Wayne to vacate the Hillview Property, including verbally asking him to leave, going to the Residential Tenancies Board, and going to the police. Each time he did something Wayne would follow-up with threats. Shawn claims that in 2016, Wayne was arrested as part of a Vikings motorcycle gang bust. He sent him an eviction notice in May 2020 and feels he cannot list the property with a real estate agent because of the risk of threats and bullying by Wayne.

So, as a last resort, he brought an action for vacant possession. Conclusion [ 71 ] In view of my reasons above, I conclude that there was no oral contract between Shawn and Wayne to provide Wayne a life interest in the Hillview Property. Wayne has not established that there was part performance. [ 72 ] Instead, I find that the preponderance of evidence supports Shawn’s version of events, namely: i. Wayne did not have the money to purchase the Dillon Property during the foreclosure proceedings because of the level of debt he and his ex-wife Gail Locke incurred during the marriage; ii.

When Shawn sold the Dillon Property he failed to make any real profit because of the expenditures he made on the mortgage, the renovations and the vehicles he purchased for Wayne and Stephen; iii. When Shawn allowed Wayne to take up residence in the Hillview Property he wasn’t intending to give Wayne a life interest, but rather he was trying to get Wayne back on his feet after being in jail. This intention is also consistent with Shawn’s evidence that he began employing Wayne in his company around the same time;

iv. Wayne’s evidence, that his presence on the property since 2008 supports his assertion of a life interest, holds very little weight when compared to Shawn’s evidence that he has been attempting to evict Wayne since at least 2015 when things “blew up” between them and he had to fire Wayne from his company. Since then any attempt to have Wayne removed has been met with threats and violence. Do Wayne Johnson and Stephen Johnson have an interest in the corporation that owns 1 Riverview Avenue, Mount Pearl, NL? Position of the Parties Wayne’s Evidence [ 73 ] As indicated in the background

section of these reasons, Wayne asserts through his counterclaim that there was an oral contract between him, Stephen and Shawn in relation to the Riverview Property. [ 74 ] Like his life interest in the Hillview Property, the consideration arose from the transfer of the Dillon Property to Shawn in exchange for a one third interest each in the business.

In their evidence the parties acknowledge the main reason for the purchase was for the real estate and that there is no documentary evidence of this agreement. [ 75 ] Wayne testified that the surrounding circumstances of the acquisition are indicative of their arrangement, namely that Shawn signed the personal guarantee to Paul Billard on April 13, 2010, while Wayne conveyed the Dillon Property to Shawn on or about April 7, 2010. [ 76 ] Additionally, Wayne testified he spoke with Paul Billard and told him that he could not come up with the financing so they mutually agreed Billard would take back a mortgage (see Exhibit S.J. # 9).

Wayne was shown page 6 of this exhibit during his evidence in chief and drew the Court’s attention to the fact that he witnessed the Billard signature and Shawn’s signature. [ 77 ] He later volunteered he was told by his lawyer that he shouldn’t put his name on any legal documentation, but the oral agreement was that after the completion of the sale all three would own the property, tear down the building and develop it as residential building lots. [ 78 ] It is on this basis that Wayne and Stephen seek a determination that they are one third owners of 8917 Newfoundland and Labrador Inc. and/or Gold Seal Roofing Inc., which is now an amalgamated entity of 8917 Inc.

Stephen’s Evidence [ 79 ] Stephen testified he knew very little about the details surrounding the purchase of the Riverview Property and was not able to provide any specifics about his interest. All that he was able to tell the Court was that he understood it was to be purchased for the family. Shawn’s Evidence [ 80 ] Shawn testified he met Paul Billard in 2004 when he rented the Riverview Property. In 2008 he started talking to him about buying the business. The total price for the company shares and the property was $425,000.

This consisted of a down payment of $20,000 to hold the property, three installments of $5,000 and a final payment of $90,000 (for a total of $125,000) on closing, along with a take-back mortgage of $300,000 to Paul Billard (see Exhibit S.J. #10, pages 49, 52-53 and 55; and Exhibit S.J. #9, pages 19, 29, 36, 42, 65, 85, 92, 108 and 110). [ 81 ] During his examination-in-chief, he was categorical that the property was purchased by him alone, stating: “I made all the payments, down payments and mortgage payments”. [ 82 ] During cross-examination, Shawn gave more background details regarding the Riverview Property, stating he began renting from Paul Billard in 2005-2006 and tried starting a mechanic garage/body shop.

He, not Wayne, negotiated the lease terms of $1500 a month and POU. Wayne and Stephen were his employees. Stephen was on the payroll and Wayne was paid in cash. Eventually, Wayne took over the garage from Shawn but it later failed. [ 83 ] When asked by Wayne’s counsel about the Arrangement he was firm in his response that he never agreed to give Wayne and Stephen any interest in the property or the business.

Analysis [ 84 ] During closing arguments, Wayne’s counsel conceded that his client’s evidence to support the existence of an oral contract regarding the purchase of the Riverview Property was not as strong as the evidence to support the existence of an oral contract for the Hillview Property.

He acknowledged there may have been no actual consideration between Shawn, Wayne and Stephen; rather it was more of a gentlemen’s agreement to buy and develop the property as residential building lots. [ 85 ] As noted in Suley , the objective theory of contract requires, whether based on agreement or on promise, a consensual element.

The test of whether a promise is made does not depend on an enquiry into the actual state of mind of the promisor, but on how the promisor’s conduct would strike a reasonable person in the position of the promisee. [ 86 ] Applying this criteria to the evidence of Wayne, Stephen and Shawn a reasonable person would not have interpreted Shawn’s actions in making the down payments himself, placing his name only on the mortgage back to Paul Billard, and signing his name only on the share transfer from Paul Billard’s company to his own company, as conduct demonstrating he was doing so on behalf of himself and his father and brother.

There is no objective evidence of a promise or a consensual agreement anywhere in the testimony of the parties.

Conclusion [ 87 ] In view of my reasons above, I dismiss the counterclaim of Wayne and Stephen that there was an oral agreement that Shawn was to hold title to the Riverview Property with a one third beneficial interest for both Wayne and Stephen. . DISPOSITION [ 88 ] Shawn has established on the preponderance of evidence that there was never an oral contract to provide Wayne with a life interest in the Hillview Property.

At most, the evidence supports a finding that Shawn permitted Wayne to reside on the property conditionally until he was able to get his life back in order following his incarceration. [ 89 ] Shawn is therefore entitled to an order for vacant possession under Rule 27.12.(1) of the Rules of the Supreme Court , 1986 , S.N.L. 1986, c. 42 , Sch.

D : In a proceeding or on an application to recover possession of property, final judgment may be entered directing possession of the property to be given to the party or applicant or, where possession cannot be given, ordering the value thereof to be recovered by the party or applicant, and award damages for the wrongful taking or withholding of the same. [ 90 ] Wayne and Stephen’s counterclaim for a two-thirds interest in the Riverview Property is dismissed as they have not proven on a preponderance of evidence that Shawn orally agreed to do so in exchange for equity in the Dillon Property. [ 91 ] The parties have leave to address the issue of costs. _____________________________ Peter N.

Browne Justice