Pelley v. Streeper, 2024 ABCJ 24

In the Alberta Court of Justice Citation: Pelley v. Streeper, 2024 ABCJ 24 Date: 20240129 Docket: 2302100007 Registry: Grande Prairie Between: Robert Leo Pelley Plaintiff Defendant by Counterclaim - and - Donald Streeper Defendant Plaintiff by Counterclaim Corrected judgment: A corrigendum was issued on January 30 , 2024; the corrections have been made to the text and the corrigendum is appended to this judgment. Decision of the Honourable Justice A. B.

Chrenek Overview [ 1 ] The Plaintiff tenant seeks damages for the wrongful seizure of five vehicles and two trailers as well as tools, supplies and other items as part of the termination of a verbal sub-lease agreement. The Defendant landlord counterclaims for unpaid rent and damages. [ 2 ] The sub-lease commenced in February 2021 between the Plaintiff, Mr. Pelley, as tenant and the Defendant, Mr. Streeper, as landlord. The premises leased were one third of a commercial shop and several parking stalls in the surrounding yard. [ 3 ] The lease was terminated in May 2022.

The landlord maintains that there was rent outstanding in the sum of approximately $3,200.00, which the tenant denies. Since the termination of the sub-lease, the landlord has retained the tenant’s vehicles and trailers together with most of the assets tenant had in the shop. Issues [ 4 ] The issues are:

a) Whether or not there was rent outstanding in May 2022?

b) Whether there a wrongful seizure and if so, what is the appropriate measure of damages?

c) Whether or not the tenant subsequently broke into the shop and caused damage and loss to the landlord, and if so, the value of the damage. Facts and Analysis [ 5 ] The tenant was in the business of buying used vehicles, other assets and parts, fixing them up and selling them. The landlord advertised extra shop and yard space he was looking to sub-let. The tenant started leasing one third of the landlord’s shop and a portion of the surrounding yard in mid February 2021.

He used the shop to work on vehicles and had vehicles and trailers parked in the yard of the premises. [ 6 ] Rent was agreed to between the parties in the amount of $1000.00 per month for the first year of the lease, and then increased to $1,500 per month. The rent increase occurred in February 2022 when the landlord informed the tenant that he had to pay the new amount, retroactive to January 1, 2022.

The tenant accepted this and started to pay both the ongoing and the retroactive amounts in mid to late February 2022. [ 7 ] In late May 2022, the tenant was locked out of the shop, and he found the landlord in the yard of the rental premises moving his vehicles with a front-end loader such that he could not access them. The keys to the vehicles were in the shop and the locks to the shop had been changed. [ 8 ] The landlord lost his keys in May 2022 and had to change the locks to the shop. In the process, he decided to impound the tenant’s assets to inspire him to pay the back rent that was owing.

He texted the tenant to tell him that if he paid up the rent, he would give the tenant the new key. The landlord then moved the vehicles and blocked them in the yard. [ 9 ] Neither party disputed that the landlord’s actions in changing the locks, interfering with the tenant’s possession of the shop, and prohibiting access to the vehicles in the yard terminated the lease in May 2022. Was there Outstanding Rent in May 2022? [ 10 ] There was no discussion between the parties prior to the locks being changed about rental arrears.

The text messages from the landlord after he changed the locks sought back rent in exchange for a new key, but no amount was included in the texts. The landlord maintained that the rental arrears were about $3,200.00 but had no records other than his recollection that the arrears built up between March and May of 2022. The landlord believed that rent at the time was current to the end of February. [ 11 ] The tenant denies rent was in arrears in late May 2022. He maintains that he had just paid both May and June rent totaling $3000.00.

His claim includes a refund of the June rent paid in the sum of $1,500.00. [ 12 ] The tenant believed the reason that he was locked out was due to the landlord hearing rumors that he was planning to leave and stop leasing the shop and yard, which the landlord denies. [ 13 ] Rent was seldom paid on time during the fifteen-month lease. Except for one payment done by e-transfer, rent was always a cash payment from tenant to landlord. Payments were generally made when the parties were in the same place or after the tenant made a cash sale.

The parties were not always in the same place for rent to be paid on the first of each month. The tenant believed that timely payment was relative in these circumstances and as a result, rent was typically paid in arrears. [ 14 ] The reason for the rent increase was an increase in the cost of utilities which were included in the monthly rental cost to the tenant.

There was no notice of the rental increase when it was required in February 2022, nor any basis to make it retroactive to January 1, 2022, but the tenant did not dispute the increase or its retroactive effect and started making payments. [ 15 ] It makes little sense for the landlord to take the steps of locking the tenant out and impounding the vehicles, which ultimately had the effect of ending the lease, only because he was worried about the tenant moving out and not continuing to rent. [ 16 ] The landlord’s best evidence, which was limited, was that the outstanding rent was about $3,100 to $3,200.00.

January 2022 rent was paid in mid-February, and February rent was paid in full according to the landlord. Other than that evidence, it was unclear how the amount claimed was determined or what non-payment or part payment gave rise to that amount. [ 17 ] I find the rent was in arrears in the sum of $3,200.00. I base this finding on the following facts:

a) that there had recently been a retroactive increase in rent to $1,500.00 per month,

b) that rent was seldom paid on time,

c) that there was a request for approximately $3,500.00 for back rent at the termination of the lease according to the tenant,

d) that rent was paid in full to at least the end of February,

e) that there had been a recent payment of rent by the tenant just prior to the locks being changed, and

f) that whether the impetus for the landlord’s actions was the lost keys necessitating replacement or a concern that the tenant may bevacating the premises, the actions of the landlord are consistent with there being rental arrears outstanding. [18] Accordingly, the tenant is indebted to the landlord for the rent outstanding in the sum of $3,200.00. Was there a wrongful seizure, and if so, what is the appropriate measure of damages? [19] The landlord in this case terminated the lease and at the same time, seized the tenant’s assets.

The tenant argues that thisseizure was not authorized by law, has resulted in damages to the vehicles that would cost beyond their value to repair, and amountsessentially to the wrongful act of conversion or trespass to chattels. [20] The right of distress allows a landlord to seize property of a tenant to cover unpaid rent. It is a powerful remedy that does notfirst require judicial authority or approval and is therefor subject to limits.

It arises from an existing landlord and tenant relationship andits purpose is to remedy the default and allow the tenancy to continue. [21] The right to terminate or forfeit a lease upon default by the tenant is a separate and mutually exclusive legal right to distressfor rent as it means there is no landlord and tenant relationship, and the landlord regains possession of the premises. [22] When presented with

an act of default, the landlord must elect to proceed in one manner or the other, but not both. [23] When the lease terminated, and the relationship of landlord and tenant in this case ended, and the landlord was not entitledunder the common law to distrain or seize for the arrears of rent. Once the tenancy is terminated for arrears of rent, there is no longer aright to distrain for that breach: A & M Enterprises v B.J.

Millwork (1985), (AB KB), 61 AR 283, Brown Ltd vCarling O’Keefe Breweries of Canada (1989), (AB KB), 101 AR 72. [24] The seizure of the tenant’s property, and the continued retention of these assets from May 2022 to the date of trial, gives riseto the torts of conversion, detinue and trespass to a chattel. In Sprung Instant Structures Ltd v Royal Bank of Canada 2008 ABQB 30, theCourt describes these tortious acts as follows: In Clow v Gershman Transport International Ltd (2000), 2000 ABQB 360 , 265 AR 181 (Alta.

Q.B.), Paperny J.A. describedthe tort of conversion at para 13: The essential features of the tort of conversion are: (1) a wrongful act; (2) involving a chattel; (3) consisting of handling, disposing ordestruction of the chattel; (4) with the intention or effect of denying or negating the title of another person to such chattel. Paperny J.A. cited The Law of Torts in Canada, 3rd Edition, (Toronto, Carswell, 1989), wherein at p 95, professor Fridman writes: Conversion consists in a wrongful taking, using or destroying of goods or the exercise of dominion over them that is inconsistent with thetitle of the owner.

It is an intentional exercise of control over a chattel which seriously interferes with the right of another to control it.There must be a voluntary act in respect of another's goods amounting to a usurpation of the owners proprietary or possessory rights inthem.

Before a person can be found responsible for conversion, the court must be satisfied that he either knowingly or carelessly, withoutascertaining or attempting to ascertain who the true owner of the property was, took possession of the goods and exercised somedominion over them in the real sense, not merely in the sense of a transporter changing their physical location.

Succinctly put, conversionis a "positive wrongful act or dealing with the goods in a manner, and with an intention, inconsistent with the owner's rights." Detinue differs from conversion in that it is concerned with the wrongful detention of a chattel but without the intention or effect ofdenying or negating the title of the Plaintiff to the chattel. As with conversion in order for a Plaintiff to establish detinue it is necessary toprove that the Plaintiff had possession or an immediate right of possession at the time the chattel was detained.

Also, the Plaintiff mustestablish that a demand for the return of the chattel has been made and refused. The demand must be unconditional and the refusal mustbe absolute and unqualified. A trespass to a chattel will be established where the plaintiff has possession or an immediate right of possession and that right orpossession is wrongfully interfered with, physically, by the defendant, but without the intention or effect of denying or negating thePlaintiff's title.

It is apparent from the foregoing that to establish either conversion, detinue or trespass to chattels, it is necessary for the Plaintiff to provethat it had possession, or an immediate right of possession, at the relevant time. [25] The tenant possessed and had the right to possess all items claimed prior to the termination of the tenancy, and the wrongfulseizure of the assets denied the tenant title to those assets as well as the use of the various supplies and tools, ultimately ending his buyand sell business. [26] Looking at damages, the law in this area treats a conversion as resulting in a “forced sale” of the assets converted and requiresa wrongdoer to pay the market value of the assets at the time of the conversion: BMW Canada Inc. v Mirzai, 2018 ONSC 180 at para 26.

The court is tasked with determining the “purchase price” of the assets converted by the wrongdoer, who then “purchases” them to putthe claimant, in this case the tenant, back in the position they would have been in but for the wrongful act: Shearer v Shields and Britz,2017 ABPC 108 at paragraphs 34-35.

[ 27 ] The amount of the various vehicles, trailers, tools and supplies is in dispute. Neither party provided any expert evidence as to value, but both offered their understanding of market value at the time of the wrongful seizure. Photographs were provided, but most relate to the vehicle condition long after they were seized. There was obvious damage as a result of using the front-end loader to move the vehicles, and they have now sat exposed to the elements for over 18 months. Some of the vehicles, however, had a window missing or other issues at the time of the seizure and required work.

Others had newer tires at the time. [ 28 ] The onus is on the tenant to prove the values of the assets at the time of the seizure on a balance of probabilities, or a standard that is more likely than not. The landlord described a background and accreditation as an appraiser but provided little detail about each of the vehicles or the assets in the shop when valuing them. The tenant provided a fair bit of detail, including previous sales, specifications, and saleable features of all the assets. The tenant kept a close eye on the prices of used vehicles and equipment as part of his business.

He further provided detailed information about the mechanical condition, age, and physical state of each asset.

For instance, he provided details of the value that one of the vehicles had previously sold for, and what he had purchased several of the items for. [ 29 ] As I will detail later in these reasons, the tenant did attend and retrieve assets such as tires, a toolbox and shop vac, but other supplies, tools, and materials of the tenant’s remained in the shop and wer e held by the landlord. [ 30 ] Based on all the considerations above, I take the view that while the tenant’s values were based more on what he would ask for the sale of each item than their actual value, the valuation of the assets by the tenant falls much closer to their value than does that of the landlord.

I find that the value of the assets converted by the landlord is as follows: 2000 Dodge Ram 1500 4x4 truck $ 5,000.00 1996 Jaguar limited edition show vehicle $ 5,000.00 1993 Toyota Tercel $ 3,000.00 1991 Volkswagen Golf GTI $ 2,500.00 1988 Dodge Ram 5500 $ 3,000.00 2001 Enclosed Utility Trailer $ 1,500.00 1999 Utility Trailer $ 1,000.00 Miscellaneous tools, parts, paint, supplies and code readers $ 5,000.00 Total $26,000.00 [ 31 ] The landlord is indebted to the tenant in the sum of $26,000.00.

Did the tenant subsequently break into the shop and cause damage and loss to the landlord? [ 32 ] The landlord claims that shortly after the termination of the tenancy, there were two forced entries into the shop, each resulting in loss and damage. Both were reported to the RCMP but ultimately the investigation neither resulted in charges nor the return of property. [ 33 ] Following the first break and enter, security cameras were installed. [ 34 ] In the first break in, the landlord described seeing the tenant at the doorway while he was moving the tenant’s vehicles with the loader.

Outside the shop appeared to be the same, but inside the shop there was damage to the sides of a one-ton truck with a sledgehammer laying nearby, and a hole in the roof of a side-by-side. The landlord repaired the side-by-side himself and claimed no damages for that. He claimed approximately $6,900.00 in damages as the quoted cost to repair the one-ton truck side panels. He also claimed for a battery which new would cost $393.00. [ 35 ] In the second break in, the lock to the man door to the shop was broken.

Photos from the security camera show a truck just like the tenant’s leaving the yard loaded with multiple tires, a toolbox, a shop vacuum, and other items. The landlord reported at this time that he was missing two electric impact wrenches valued at $300.00 each. As well, on this occasion, a window was broken on his 1965 Kenworth truck which must be special ordered from the United States at a base cost of over $500.00. [ 36 ] The tenant maintains that he did not return to the premises, although he did retrieve the tires which he maintained were in the yard and not in the shop.

A subsequent Kijiji advertisement of the tenant’s showed the same style and color of truck with various tires in the back for sale following the termination of the lease. In text messages when the lease was terminated, the tenant indicated he would simply grind the new lock and access the premises. [ 37 ] Based on the evidence in the camera shots, the subsequent Kijiji advertisement and the text, I find on a balance of probabilities that the tenant entered the premises after the cameras were installed and retrieved tires, a toolbox, shop vac and other items. In doing so I find he broke the lock.

I allow the damages claimed by the landlord of $700.00 for the Kenworth window and $600.00 for the wrenches. [ 38 ] The first reported break in is more difficult to assess.

[ 39 ] There was some evidence of how the tenant may have obtained keys to access the shop from the landlord’s truck. Nothing was taken from the shop on this occasion other than a dealer plate, however, which is inconsistent with the tenant’s clear desire following the termination of the lease to obtain his property from the shop. [ 40 ] The claim advanced for damages to property from the first alleged break and enter amounts to approximately $7,300.00 quoted to repair the side panels of the one-ton truck and to replace a battery.

Those repairs have not been undertaken, and it is unclear at this point over 18 months after the alleged break in if the repairs will occur. [ 41 ] The facts surrounding the first break in are sufficiently vague that I am not able to find on a balance of probabilities that the damages occurred because of any action of the tenant. Those damages in the counterclaim are denied. [ 42 ] In total, the tenant is indebted to the landlord for damages and loss in the sum of $1,300.00.

Summary [ 43 ] The Plaintiff, Robert Pelley, is entitled to damages in the sum of $26,000.00. [ 44 ] The Defendant, Donald Streeper, is entitled to damages totaling $4,500.00. [ 45 ] The net judgement owing by the Defendant to the Plaintiff is $21,500.00. [ 46 ] There will be Pre-Judgment interest on this sum payable by the Defendant to the Plaintiff from May 25, 2022. [ 47 ] If the parties are unable to determine the costs of this action, the matter may be returned before me to address costs. Heard on the 15 th day of January 2024. Dated at Grande Prairie, Alberta this 29th day of January 2024. Justice A.B.

Chrenek A Justice of the Alberta Court of Justice Appearances: Robert Leo Pelley, self-represented Donald Streeper, self-represented _______________________________________________________ Corrigendum of the Decision of

The Decision of the Honourable A.B.Chrenek Assistant Chief Justice _______________________________________________________ Paragraph 30 of the reasons omitted the 2000 Dodge Ram 1500 4x4 truck valued by the Court in the sum of $5,000.00. The value is added to paragraph 30 and reflected in paragraphs 31, 43 and 45 of the reasons, with the resulting damages being determined as follows: [43] The Plaintiff, Robert Pelley, is entitled to damages in the sum of $26,000.00. [ 45 ] The net judgement owing by the Defendant to the Plaintiff is $21,500.00.