Erika Reid - v. -, 2019 SKPC 55

IN THE PROVINCIAL COURT OF SASKATCHEWAN CIVIL DIVISION Citation: 2019 SKPC 55 Date: September 4, 2019 File: 276 of 2018 Location: Regina _____________________________________________________________________________ Between: Erika Reid - and - Michelle Leader Erika Reid For the Plaintiff Michelle Leader For the Defendant _____________________________________________________________________________ JUDGMENT DEMONG , J _____________________________________________________________________________ Introduction

[ 1 ] Ms. Reid is suing to recover a vehicle which she says she lent to Ms. Leader on the understanding that the vehicle would be returned to her on demand. She alleges that she formally asked Ms. Leader to return the vehicle but Ms. Leader refused and continues to refuse to do so. In the interim, Ms. Reid has been making payments on the loan that she had incurred to purchase the vehicle and she seeks further monies from Ms. Leader to reflect these payments – essentially a claim for ‘loss of use’ or alternatively, ‘the depreciated value’ of the vehicle while it was in the wrongful possession of Ms.

Leader. [ 2 ] Ms. Reid seeks further damages to reflect the fact that the vehicle has been damaged, or alternatively, not kept in a state of repair while in the possession of Ms. Leader. Ms. Reid seeks pre-judgment interest on any monies due and owing to her and her costs of this action. [ 3 ] Ms. Leader has filed a reply and has counterclaimed. In her reply she asserts that the parties entered into a contract of sale in which Ms. Reid, through an agent, sold her the vehicle for the sum of one dollar.

She argues that the Bill of Sale that reflects this agreement is clear and unambiguous and should be strictly enforced. [ 4 ] By way of counterclaim, Ms. Leader asserts that she lent Ms. Reid the sum of $2,500.00 and that she has demanded repayment of this loan, but Ms. Reid has refused and continues to refuse to repay her. She also asserts that the plaintiff has caused damage to her tires, her garage and a door on her fence. She seeks recovery of monies in relation to that damage. [ 5 ] Ms.

Leader also asserts that the plaintiff has caused her to suffer stress and mental anguish, damage to her reputation, and a reduced ability to earn income – all of which arise from what are alleged to be attempts by Ms. Reid to defame her character. In total, Ms. Leader is seeking the sum of $35,000.00 together with her costs of this action. [ 6 ] At the case management conference held March 22, 2019, Ms.

Leader was advised that this Court had no jurisdiction to deal with allegations of defamation, because this jurisdiction is specifically precluded by section 3(2) of The Small Claims Act, 2016, SS 2016, c S- 50.12 [ Act ] which states:

(2) This Act does not apply to a claim for libel, slander, malicious arrest, malicious prosecution, or false imprisonment. [ 7 ] Defamation is a catch-all word for libel and slander. Therefore, this Court has no jurisdiction to deal with this aspect of her claim. At the commencement of trial I again advised Ms. Leader that I had no jurisdiction to entertain this aspect of her counterclaim, and on that basis, this portion of Ms. Leader’s counterclaim is dismissed. Issues [ 8 ] This Court is called upon to address the following issues: 1.

Was the plaintiff’s vehicle sold to the defendant with the expectation that the defendant would obtain full ownership of the vehicle, or, was the arrangement one where the plaintiff offered to lend the vehicle to the defendant for an unspecified period of time and on the understanding that it would be returned to her on demand? 2. If the vehicle was simply loaned to the defendant, can this Court order that the vehicle be returned to the plaintiff, and has the plaintiff proven her entitlement to additional damages? 3. Is Ms. Reid entitled to additional relief by virtue of Ms.

Leader’s decision to retain the vehicle? 4. Does the plaintiff owe the defendant the sum of $2,500.00 or some lesser amount and if so, how much?

5. Did the plaintiff cause damage to property owned by the defendant, and if so, what is the quantum of loss for that damage? 6. Is either party entitled to costs in these proceedings, and if so, how much? Erika Reid’s Claim [ 9 ] Ms. Reid carries the burden of proof, to convince the Court, more likely than not, that the arrangement that she had with Ms. Leader is different than what appears to be patently obvious - as evidenced by a Bill of Sale executed by Michelle Leader and Erika Reid’s ostensible agent, and which has been introduced as Exhibit P-2 .

That document reads as follows: Bill of Sale Jan 2, 2018 I Darien Hunchuk of 1148 Falworth Rd. Calgary, Alberta Hereby certify that I am the lawful owner of this vehicle: Year: 2009 Model: IS250 Make: Lexus VIN JTHCK262495031150 and have the authority to sell it.

I hereby acknowledge the receipt of $1 one dollar in the form of cash from Michelle Leader of 2601 Winnipeg Street, Regina Sk as full payment for the purchase of the said vehicle which is sold ‘as is’. (signature) Michelle Leader (signature) Darien Hunchuk [ 10 ] On its face, and read literally, this document evidences that Darien Hunchuk, ostensibly as agent for Erika Reid, sold Erika’s vehicle to Michelle for a single dollar, and on that basis I should conclude that Erika sought to relinquish all right and title to the vehicle in exchange for the purported purchase price.

One might operate on the assumption that the Court need only look to the clear words of this agreement, and then strictly interpret them in order to determine the true intentions of the parties in order to resolve this dispute. But one would be wrong. [ 11 ] The law of contract has, as noted by Rothstein J, in Creston Moly Corp. v Sativa Capital Corp ., 2014 SCC 53 , [2014] 2 SCR 633 [ Sativa ], at para 47 , 48, and 50, evolved. He notes: [47] The

interpretation of contracts has evolved towards a practical, common sense approach not dominated by technical rules of construction. The overriding concern is to determine ‘the intent of the parties and the scope of their understanding’. .. To do so, a decision-maker must read the contract as a whole giving the words used their ordinary and grammatical meaning consistent with the surrounding circumstances known to the parties at the time of formation of the contract.

Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning; No contracts are made in a vacuum: there is always a setting in which they have to be placed…. In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.

[48] The meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the nature of the relationship created by the agreement. The meaning which a document (or any utterance) would convey to a reasonable man is not the same thing as the meaning of the words. The meaning of the words is a matter of dictionaries and grammars; the meaning of the document is what the parties using those words against the relevant background would reasonably have been understood to mean. [50] I am of the opinion that the historical approach should be abandoned. Contractual

interpretation involves issues of mixed fact and law as it is an exercise in which the principles of contractual

interpretation are applied to the words of the written contract, considered in light of the factual matrix. [ 12 ] This evolution in the

interpretation of contracts is entirely apposite in consideration of the dispute that has come before the Court. In looking at the words used, in the context of the factual matrix giving rise to the transfer of possession of Mr.

Reid’s vehicle, I am bound to look not only to the words of the agreement, but place them in context having regard to: (1) the surrounding circumstances known to the parties at the time of the formation of the contract; (2) the commercial purpose of the contract; and, (3) the genesis of the transaction, its background and its context, all in order to determine whether the agreement was, as Ms. Leader suggests an outright sale of a vehicle at a cost which is arguably fifteen thousand times less than the vehicle’s value; or, as Ms.

Reid suggests, an ill-conceived document put together for the express purpose of allowing Ms. Leader to register that vehicle in her own name for temporary use until such time and Ms. Reid could once again put it to her own use. [ 13 ] There is no question that Ms. Reid had originally purchased the vehicle and had, at some point in time, registered it with Saskatchewan Government Insurance (‘SGI’) under her own name. Ms. Reid says, however, that some time in the year 2017 she had been charged and convicted of impaired driving and that in consequence she was unable to operate the vehicle.

At some point in time, and as a favour to her friend, Darien Hunchuk, she temporarily transferred ownership of the vehicle to Ms. Hunchuk so that she could drive it. Thereafter, she says that Ms. Leader contacted her in the latter part of 2017 and asked if she could borrow the vehicle because her vehicle was in for repairs. Ms. Reid says that she was agreeable to doing so. At this point in time the parties were close friends. Based on their tenor in court and the acrimonious nature of their relationship since April of 2018, it is fair to say that they are no longer friends. [ 14 ] At the time of this request, Ms.

Reid was living in Calgary and Ms. Leader was resident in Regina. While the evidence is not as clear as one would have hoped for, I am satisfied that the vehicle was, at the time of Ms. Leader’s request, in Regina. [ 15 ] Ms. Reid says that at the end of December she invited Ms. Leader to Calgary and paid for Ms. Leader’s flight to Calgary, ostensibly to spend some time together, but also to give effect to the temporary transfer of the vehicle. Ms. Reid says that it was she, and not Ms. Hunchuk, who prepared the Bill of Sale referred to above.

She says that she prepared the Bill of Sale because the vehicle was actually owned by her, even though it was registered for insurance purposes in the name of Ms. Hunchuk. Setting aside the legal niceties of the difference between the ‘actual owner’ versus the ‘registered owner’ of a vehicle, I am satisfied that when the Bill of Sale was executed Ms. Reid was the actual owner with authority to affect its transfer. [ 16 ] Ms. Reid says that the sole purpose of the Bill of Sale was to allow Ms. Leader to present that Bill of Sale to SGI as proof of ownership so that it could be registered in Ms.

Leader’s name - so that Ms. Leader could drive it until such time as Ms. Reid’s could again register it in her own name and use it. (Because of the impaired charge, Ms. Reid had no legal authority to do so for a period of time). Ms. Reid says that Ms.

Leader knew full well that this was the intended purpose of the Bill of Sale and that it is inconceivable and wholly unreasonable, either subjectively or objectively, that one could conclude that the manifest mutual intent of the parties was that she would sell her Lexus, then worth in the vicinity of $15,000.00, for 1/15,000 th of its true value. [ 17 ] I am satisfied that Ms. Leader took possession of the vehicle and subsequently registered it with SGI on a month to month basis - and used it from time to time. In the latter part of April, 2018, Ms. Reid says that she asked that her vehicle be returned.

This is confirmed by a series of telephone texts between the parties and entered into evidence at trial. Unfortunately, at or about this time, the parties had a falling out. The texts identify an increasing acrimonious and profane breakdown in their relationship. Ultimately Ms. Leader refused to return the vehicle and Ms. Reid brought this action in June of 2018. The trial of the action was delayed because Ms. Reid could not affect service of the claim until November of 2018. It was delayed further, when, for medical reasons Ms.

Leader could not attend the original trial date, set for June 3, 2019. [ 18 ] The text message evidence before the Court confirms that Ms. Leader had originally asked to borrow Ms. Reid’s vehicle because hers had broken down. Those texts also indicate that Ms. Reid was asking for the return of her vehicle in or about April of 2018. Ms. Leader’s various responses to that request suggest that Ms. Leader was fully aware of the true nature of Ms. Reid’s ownership,

particularly when she said things like (the relationship having started to break down): ‘come get your car fuck’; …“I want storage fees too” …; “you’ll never find the car”…; and, ultimately, “if you ever call me a fucking thief again maybe I’ll sell the car and keep the money and try to take me to court, it’s in my name fully!!! …” . [ 19 ] While Ms. Leader wishes to argue that the Bill of Sale relating to the vehicle is proof of a contract in which full and unqualified ownership of the vehicle was transferred to Ms. Leader by Ms.

Reid, I cannot come to that conclusion in light of the factual matrix surrounding its genesis, and the subsequent circumstances surrounding its use. [ 20 ] In consideration of Sattva , it is clear that the genesis of the transaction was to allow Ms. Leader, a close friend of Ms. Reid to borrow the vehicle for temporary use. Ms. Leader had specifically asked to use it - not to buy it. In that sense, I am satisfied that the purported Bill of Sale was only intended to act (as between these legally unsophisticated parties) as a document to be presented to SGI for the purpose of temporary registration.

In consideration of the context of the arrangement, I note that Ms. Leader registered the vehicle month to month, which, to me, is indicative of her recognition that at any given time Ms. Reid may ask for it back. Short registration periods invite me to make that inference. In consideration of the market, it is abundantly clear the car’s value was approximately 15,000 times more than what it was purportedly sold for.

This is clearly indicative, not of a sale, but of a presumed mechanism to try to give the loan of this vehicle some type of ‘legal trappings’ to induce SGI into allowing it to be registered under a different name. Finally, the fact that Ms. Leader texted Ms. Reid and referred to it as Ms. Reid’s car is convincing evidence of what she understood the agreement between the parties to be. [ 21 ] Therefore, in consideration of this mixed question of fact and law, I find that the true nature of the agreement was that Ms. Reid had lent the vehicle to Ms.

Leader for her temporary use on the understanding that when she asked for it back, the vehicle would be returned to her. On that basis I find, subject to any third party equities that the Court may not be aware of, that Ms. Reid is the actual owner of the vehicle and not Ms. Leader. [ 22 ] Before dealing with Ms Reid’s damages and the ancillary orders necessary to reflect my decision, I would like to deal with Ms. Leader’s counterclaim. Michelle Leader’s Counterclaim [ 23 ] Ms. Leader’s claims are fourfold. First, she alleges that she lent Ms.

Reid the sum of $2,500.00 in either late December of 2017 or early January of 2018 which she says has not been repaid. She is uncertain of the precise date upon which this loan took place, but she says it was when she visited Ms. Reid, at Ms. Reid’s expense, in Calgary. She maintains that she had brought $2,800.00 in cash with her, ostensibly to finance a few days of shopping, meals, and night clubbing. She says that Ms. Reid had advised her that she could not access her bank account and required the money, ostensibly, to buy drugs.

There is no promissory note, and there is no other corroborative evidence of this loan. [ 24 ] Ms. Reid adamantly denies that any money was lent to her and has led evidence to show that in fact she had been able to access her bank accounts at the end of December and early January, including ATM withdrawals just before New Year’s Eve. In addition, she has filed bank documents evidencing that at all pertinent times she had in the vicinity of $7,500.00 in her chequing account.

She invites the Court to conclude that if each of the foundations upon which the apparent loan was made have no merit, then the allegation of a loan is equally meritless. She points to one other matter. She invites the Court to ask why Ms. Leader would lend Ms. Reid 90% of her available cash on hand, leaving Ms. Leader a scant $300.00 with which to pay for her own shopping, meals, and evening activities. Finally, she suggests, to put it simply, that Ms. Leader is a liar. [ 25 ] Ms. Leader carries the burden of proof on the balance of probabilities to convince the court that the loan occurred.

I am not satisfied that she has met that burden. I find that her foundational premise for lending the money had been rebutted by the evidence led by Ms. Reid, and in the absence of corroborative evidence I prefer Ms. Reid’s evidence over that of Ms. Leader. In so saying I note that in fact Ms. Leader did intentionally mislead the Court while giving evidence at trial. When she was asked if she had driven the vehicle that is the subject of this dispute to court on the morning of trial, she indicated that she did not.

She repeated that assertion and following a short recess she conceded that she had lied and wished to apologize for it. This, only after I had advised the parties that I would call court security to assist in searching for the vehicle in the surrounding area, and if found, make a preservation order in respect to that vehicle. [ 26 ] Ms. Leader must appreciate that when a party to a dispute, who has a vested interest in the outcome of the dispute, is prepared to lie in relation to one matter, it taints the integrity of all of one’s evidence. While Ms. Leader may have lent Ms.

Reid money, when the Court is presented with an adamant denial that it was lent; together with further evidence which tends to undermine the alleged

circumstances of that loan; and, when there is no corroborating evidence of that loan, then the Court must ultimately base its decision on credibility. Ms. Leader’s credibility is suspect. In my view she has not met the burden of proof which the law places upon her. This aspect of her counterclaim is dismissed. [ 27 ] Ms. Leader’s remaining claims deal with three allegations of vandalism. She alleges that on or about April of 2018 Ms.

Reid attended at her home and slashed one of the tires on the vehicle in question causing $55.00 in damages, kicked and displaced a fence door, and damaged the siding on the garage located on the property that she was renting. [ 28 ] Ms. Leader did not actually see Ms. Reid do any of these things, and she has no witnesses which can confirm that Ms. Reid did any of these things, and, again, Ms. Reid vehemently denies having done any of this. In relation to the tire, I find it somewhat difficult to believe that Ms. Reid, who had come to Regina to take possession of her vehicle, would decide to slash her own tire.

Ms. Leader, however, advised the Court that she had text messages which would confirm that Ms. Reid had told her that she would, in fact, slice her tires every day for a year if the vehicle was not returned to her. Ms. Leader was given the opportunity to adjourn for a day to provide that evidence, but on the return date she indicated that she could not source that text because her phone had been in for repair and its memory had been wiped cleaned.

In cross-examination she confirmed that she used an Apple I-phone and she was asked why she did not simply gather that stored memory from the I-cloud where memory is kept. She had no explanation as to why she had not, and therefore there is no corroborative evidence which would support her claim. As such she has not met the burden of proof demanded of her and this aspect of her claim is dismissed. [ 29 ] In regard to her last two complaints of vandalism, not only is there no corroborating evidence, it is clear that Ms.

Leader was renting the property in question, and that she vacated the property approximately one year ago. She did not repair the damage in issue, nor did she pay her landlord for this apparent damage. Her landlord has not, in the intervening year, demanded payment, nor has Ms. Leader even identified the cost of such repair. As such, even if she could convince the Court that Ms. Reid caused this damage, she has suffered no pecuniary loss. Once again, I find that Ms. Leader has failed to meet the burden of proof demanded of her and these additional aspects of her counterclaim are dismissed.

Assessment of Damages for Erica Reid [ 30 ] Ms. Reid seeks the return of her vehicle. Section 3(1) (

b) of the Act grants this Court the jurisdiction to allow for the recovery of personal property. As I have found that Ms. Reid is the lawful owner of the vehicle in question, a 2009 Lexus IS 250 AWD, VIN number JTHCK262495031150, I hereby direct that it be returned to her. [ 31 ] In the course of these proceedings, I made a preservation order directing that the vehicle in question be towed to Wheat Country Motors and placed into the care of its manager, Aggrey Fynn, who had indicated at trial that he would be agreeable to storing it without cost pending disposition of this case.

Upon presentation of a certified copy of this decision Mr. Fynn is directed to give that vehicle to Ms. Reid together with the key fob. The Court thanks him for his willingness to assist. When he does so, Ms. Reid is directed to remove the license plate on the vehicle and deliver it to the Small Claims Court clerk, after which time the Court Clerk will advise Ms. Leader in writing that she is free to collect it. [ 32 ] If Ms.

Reid seeks to register this vehicle with SGI or any other insurance provider, this decision shall operate as that insurance agency’s authority that, subject to any other third-party interest, Ms. Reid is the lawful owner of that vehicle. [ 33 ] I now turn to Ms. Reid’s further claim for damages. Because one of the tires has been slashed, she seeks the cost of buying four new matching tires in the sum of $775.72, four new rims, in the amount of $564.96, and a new set of headlights in the further sum of $686.30. I am not prepared to make this award of damages. There is no evidence before me that Ms.

Leader purposely damaged the headlights nor is there any evidence that Ms. Leader slashed the tire. When Ms. Reid decided to transfer the vehicle to Ms. Leader, there was no agreement that it be returned to Ms. Reid in its precise original condition. Wear and tear, and third-party vandalism to a vehicle is the unfortunate, but sometimes incidental consequence of lending one’s vehicle to another. I dismiss this aspect of Ms. Reid’s claim. [ 34 ] Ms.

Reid’s final damages claim seeks recovery of the sum of $12,197.50 which constitutes a series of bi-weekly payments that she made towards the loan that she obtained when she purchased the vehicle. She says that those biweekly payments equate to the sum of $287.00 per payment but her Exhibit P-4 identifies a bi-weekly payment of $230.86. Ms. Reid feels that Ms. Leader should be held to account for these payments from the time that she lent the vehicle to Ms. Leader until the date of trial. There are problems with this aspect of her claim.

[ 35 ] First, there was no agreement that Ms. Leader would be responsible for making these payments while availing herself of the use of the vehicle until such time that Ms. Reid requested its return. Ms. Reid’s best case scenario would to be seek recovery of her potential loss under this aspect of her claim from the time that she requested the return of the vehicle - which would have been towards the end of April, 2018, rather than the date that it was first lent to Ms. Leader. [ 36 ] Even then, were I to allow her claim as defined above, Ms. Reid would obtain double recovery.

She would be awarded not only the return of her vehicle, but also all of that portion of those payments which constitute payment of the principal owing on the vehicle. [ 37 ] Because Ms. Reid has indicated that her intention was to sell the vehicle when it was returned to her, her actual loss is the diminished value of the vehicle - which is the difference in price between what the vehicle was worth at the time that she asked that it be returned, (April of 2018), and the date of trial ( August 19, 2019). [ 38 ] Ms.

Reid has not led any evidence relating to the diminished value of the potential selling price of the vehicle by not being able to sell it in the latter part of April, 2018. I appreciate that she has failed to do this not because she does not want to recover this sum, but rather, because she was unfamiliar with the manner by which she should have proven her damages. Because I am satisfied that the potential loss is more significant than an imposition of a rather nominal damages award, I am prepared to allow a reference on the issue of these further damages.

In my view this is consistent with the approach identified by Madame Justice Wilkinson in Syniuk v Kornberger , 2013 SKQB 404 , 432 Sask R 193, at para 27 : [27] In the circumstances before me, it is a case where there was an absence of evidence in terms of a traditional category or head of damages. The trial judge nonetheless recognized that the plaintiffs had misconceived the approach to be taken in terms of proving their loss. He was satisfied there was a substantial loss and that an order of nominal damages was inappropriate.

The preferable course in this situation would have been an adjournment, on terms, in order to allow the plaintiffs to procure the necessary evidence. [ 39 ] To that end, Ms. Reid is at liberty, if she so chooses, to file, with proof of service on Ms. Leader, such further documentation and calculations which tend, more likely than not, to prove the value of her vehicle as at April 21, 2018, and its diminished value (if any) on August 19, 2019. If she chooses to do so, she must serve and then file those materials with the Court, with proof of service on Ms. Leader, on or before Friday, September 27 at 4:00 p.m.

If Ms. Leader objects to the calculations submitted by Ms. Reid, she is at liberty to serve upon Ms. Reid and file her own materials and calculations for the consideration of this Court on or before October 15, 2019, and this Court will, shortly thereafter, append an addendum to this judgment assessing any further damages in favour of Ms. Reid. [ 40 ] If, however, Ms.

Reid fails to file any additional materials and calculations by September 27, and she chooses to abandon this component of her claim for the sake of closure, then the Court will treat this aspect of her damages claimed as abandoned. [ 41 ] Notwithstanding the possibility of further proceedings in this matter, and an addendum to this judgment, I am prepared at this time to make a costs assessment. [ 42 ] Having been successful in this action and in defense of the counterclaim, Ms. Reid is entitled to her costs. Under Section 36(1) of the Act I award Ms. Reid the following out of pocket expenses: 1.

Filing fee for issuing her claim on two occasions - $ 200.00. 2. Service and attempted service - $144.80. 3. Gas for travel to court from Calgary to attend case management conference and trial, $234.00. 4. Towing charges incurred pursuant to the Preservation Order made by the Court - $95.41. Total - $674.21

[ 43 ] Ms. Reid is also entitled to her general costs in this action and in the defense of the counterclaim pursuant to section 36(3). In my view none of the factors set forth in that subsection are particularly applicable in the instant circumstances. Having regard to the relatively simple issues in dispute, and the rather nominal counterclaim to be defended, I award general costs in the sum of $600.00 for a total costs award of $1,274.21. [ 44 ] This claim does not lend itself neatly to an assessment of prejudgment interest, and I decline to make any award thereof. [ 45 ] The parties are advised that while Ms.

Reid is free to recover her vehicle, Ms. Reid is to take no further steps to collect her costs until such time as this Court makes a further assessment of damages by way of further reference and addendum to this judgment. If, however, Ms. Reid declines to revisit her damages as earlier discussed, then she may proceed to commence collection efforts in relation to her costs upon written confirmation to the Court that she chooses to abandon that aspect of her claim. _________________________ P. Demong, J