Location Access Credit Inc/Acces Credit Leasing Inc Claimant — v. —, 2021 NSSM 4

IN THE SMALL CLAIMS COURT OF NOVA SCOTIA cite: Location Access Credit Inc v. Eisnor, 2021 NSSM 4 SCCH 487076 Between: Location Access Credit Inc/Acces Credit Leasing Inc Claimant — and — Tamara Dorothy Rose Eisnor Defendant Adjudicator: Augustus M. Richardson, QC For the Claimant: Carine Martel, counsel For the Defendant: No one appearing, although properly served Heard: February 16, 2021(by teleconference) Decision: February 17, 2021 DECISION and ORDER [ 1 ] When does a claim for the breach of an automobile lease-to-buy agreement arise?

Is it when the lessee refuses to make any further payments on the lease, telling the lessor to repossess the car? Or is it when the lessor sells the car, thereby quantifying its loss on the lease? The answer to the question determines when the two-year limitation period established by s.8(1) and (2) of the Limitation of Actions Act , SNS 2014, c.35 (the “ LAA ”) begins to run. The claimant says that the claim arose when it sold the car, credited the sale price to the lessee and thereby quantified its loss. I do not agree.

On the facts and for the reasons that follow, I find that the claim arose when the lessee (defendant here) breached the lease by refusing to make any further payments under it. The Facts [ 2 ] On June 30, 2016 the defendant entered into an automobile lease with an option to purchase. The agreement was assigned to the claimant, which had providing the financing for the lease to purchase. The lessee agreed to make 156 weekly payments of $79.79 starting on July 8, 2016. On February 10, 2017 the defendant informed the claimant that she wanted to return the automobile. She told the

claimant it could repossess the automobile because it was no longer working. She would not be making any more lease payments. The claimant repossessed the automobile on February 11, 2017. [ 3 ] The claimant sold the automobile at auction on April 11, 2017 for $2,000.00 plus HST of 13% for a total of $2,300.00. [ 4 ] The claimant says that the balance owing on the lease as of the sale of the automobile was $5,165.50. Deducting the sale price leaves a balance of $3,165.00. To that are added two returned payment fees, the auction fees and the repossession fee, for a final total of said to be owing of $4,671.33.

On April 20, 2017 the claimant made a demand of the defendant on that amount. It had no response. The claimant eventually commenced the within action in this court on April 5 th , 2019 for $4,907.57. [ 5 ] Counsel did not refer me to the similar case of Location Accès Crêdit Inc/Acces Credit Leasing Inc 2020 NSSM 26 . In that case Adjudicator Nickerson dismissed the claim as having been commenced more than two years after the claimant issued a demand letter. The demand letter had been issued after the defendant had defaulted on the lease, and after the car had been sold.

That being the case it was not necessary for Adjudicator Nickerson to consider whether the claim had in fact been discovered earlier. [ 6 ] The facts here are different inasmuch as the within claim was commenced less than two years after the demand letter of April 20, 2017. It was also issued less than two years after the car was sold at auction. The question that arises is whether the claim arose earlier than those two dates.

In particular, if the claim arose on February 10, 2017, when the defendant told the claimant it could repossess the car because she would no longer be using it or making lease payments, then this claim would be out of time. [ 7 ] In saying that the claim arose as of the date of the auction, or the demand letter, counsel for the claimant relies on the unreported decision of Adjudicator Lederman, QC in Location Access Credit Inc/Acces Credit Leasing Inc v Shay (July 8, 2019, Amherst, SCAM 487267). That action concerned a similar fact scenario.

While Adjudicator Lederman ultimately decided against the claimant on a different point, he did rule that the claim was discovered when “the car was sold and a cheque generated to the Claimant by the auction company ... [t]hat is the correct starting date for the limitation period.” He rejected the date of surrender of the car because “[b]efore the sale at auction, the final amount owing by the Defendant was not known.” [ 8 ] With respect, I do not agree that is a correct statement of law in claims like these. [ 9 ] The fact that the claimant might not know the final or exact amount of the loss until after it has repossessed and sold the car is not and cannot be determinative of when a cause of action (or claim) arises.

Damages in breaches of contract are not an exact science. The final amount can only be known with a judgment. That does not mean however that the claimant under a financed lease like this does not know as of the date of the breach that it has suffered serious loss giving rise to a cause of action against the lessee. As was observed in Jogosky v. Corporation of the Town of Huntsville 2010 ONSC 4590 (appeal dismissed 2011 ONCA 324 ) at para.26, “a plaintiff does not need to know the precise cause of injury before the limitation period starts to run, or the full extent of the loss suffered.

Such a threshold for the commencement of a limitation period “places the bar too high”. Instead, a plaintiff need only know enough facts to base its allegation against the defendant.” [ 10 ] This observation was cited with approval by Jamieson, J in Smith v. Parkland Investments Limited 2019 NSSC 74 , who went on to note at para. 64 as follows: “Discoverability means the knowledge of the facts that may give rise to the action. The knowledge required to start the limitation period running is more than a mere suspicion but less than exacting knowledge. The discovery of the claim does not require that Dr.

Smith knew her claim against the Town was likely to succeed. The limitation period runs from when Dr. Smith had or ought to have knowledge of a potential claim. The discovery of additional facts at a later date does not postpone the discovery of the claim:” see also Jesty v. Vincent A. Gillis Inc 2019 NSSC 320 at para.32; and see Cassie v. Metcap Living Management Inc 2020 NSSM 17 and Hackett v. Metcap Living Management Inc 2020 NSSM 18 to similar effect. [ 11 ] With those observations in mind I turn to the LAA .

It provides in part that a claim “may not be brought after ... two years from the day on which the claim is discovered:” s.8(1) (a). Section 8(2) of the LAA provides as follows:

8(2) A claim is discovered on the day on which the claimant first knew or ought reasonably to have known (

a) that the injury, loss or damage had occurred; (

b) that the injury, loss or damage was caused by or contributed to by

an act or omission; (

c) that the act or omission was that of the defendant; and (

d) that the injury, loss or damage is sufficiently serious to warrant a proceeding. [ 12 ] I think it is fair to say that lease to purchase agreements invariably spell out how many lease payments are to be made over what period of time and in what amount. A lessee who terminates payments and, in this case, invites the lessor (or assignee) to repossess the car has clearly breached the lease. The breach clearly causes injury, loss or damage to the lessor. Indeed, such leases most often provide a formula to calculate the amount of the loss (that is, the lessee’s liability) upon such a breach.

The lessee is clearly the party who caused the injury, loss or damage. The injury, loss or damage was caused by the lessee’s breach of the lease ( i.e. his or her refusal to continue making lease payments). And in such cases it is clear that the injury, loss or damage is serious enough to warrant a proceeding. Indeed, I expect that the very first communication from the lessor following such a breach is a threat of legal proceedings. [ 13 ] All of the above points apply to the facts before me.

I am accordingly satisfied that the claimant “discovered” its claim on February 10, 2017 when the defendant advised that she would no longer be making any payments under the lease. Her invitation to the claimant that it could repossess the car was the surest sign possible that she had no intention of making any further payments. All of the ingredients for a cause of action—a contract, a breach and loss therefrom—were in place as of that date. The two year limitation period began to run then. It expired two years later on February 11, 2019. This claim, commenced on April 5 th , 2019 was out of time.

It must as a consequence be dismissed. I will make an order to that effect. DATED at Halifax, NS this 17 th day of February, 2021 Augustus Richardson, QC Adjudicator