BEN GILLESPIE Claimant - v. -, 2011 NSSM 33

Claim No: 343301 IN THE SMALL CLAIMS COURT OF NOVA SCOTIA Cite as: Gillespie v. S & L Worx Hydroponics Inc., 2011 NSSM 33 BETWEEN: BEN GILLESPIE Claimant - and - S & L WORX HYDROPONICS INC. and LORETTA JOSEY Defendants Claim No. 344955 AND BETWEEN: SCOTT RETEFF Claimant - and - BEN GILLESPIE Defendant REASONS FOR DECISION BEFORE Eric K. Slone, Adjudicator Hearing held at Halifax, Nova Scotia on May 18, 2011 Decision rendered on May 31, 2011

APPEARANCES For Ben Gillespie Tony Amoud, counsel For all other parties Erin Cain, counsel BY THE COURT: 1 These two cases were heard together, on consent of the parties, as they involve the same set of facts, and are somewhat in the nature of an action and a counterclaim involving a third-party . 2 The cases arise out of informal agreements involving the supply of hydroponic equipment. The case presents two utterly different versions of those agreements, that allow for very little shading. If one of the versions is accepted as correct, the other is substantially a lie, and vice-versa.

Rarely is this court presented with such a stark choice. The Parties 3 Ben Gillespie is the proprietor of B & C's Medicinal Nursery, which operates a hydroponic garden and sells related supplies. Some of its work involves medicinal marijuana, which can legally be grown under a licence from Health Canada. 4 S & L Worx Hydroponics Inc. is in a similar business. Loretta Josey is the owner of that business, as well as of a business that operates in the same premises known as S & L Overhead Door Services. That latter business is actually a business name registered by S & L Worx Hydroponics Inc. 5 Ms.

Josey personally operates a hydroponic garden growing marijuana, under licence from Health Canada. 6 Scott Reteff is a partner in S & L Overhead Door Services, and installs garage doors. He was at one time (and at relevant times) in an intimate relationship with Ms. Josey, although they are now simply business partners. He also has a licence to grow medicinal marijuana. 7 For ease of reference, I will refer to the parties as follows: a. Ben Gillespie is “Gillespie” b. B & C's Medicinal Nursery is “B & C” c. S & L Worx Hydroponics Inc. is “Worx” d. Loretta Josey is “Josey” e.

S & L Overhead Door Services is “Overhead” f. Scott Reteff is “Reteff” Gillespie’s version

8 Gillespie got to know Josey because they were in the same business, and Gillespie occasionally bought things in her store (Worx). This is not disputed. 9 Gillespie’s version of the relevant events is essentially this. In about early 2010, he and Josey were talking about medicinal marijuana cultivation, which Gillespie was already doing in an advanced way (technologically speaking). Josey was in the process of applying for her medicinal marijuana licence and was already operating a small hydroponic garden in the back of her shop.

Gillespie says that Josey became interested in some techniques that he had been using, which allowed for a much greater yield than one might otherwise get. This involved special equipment to cool the liquid, as well as an elaborate system of controlling the light. He says that he offered to obtain and supply her with most of the necessary equipment from his suppliers in Canada and the United States.

He says that they struck a deal whereby he would charge her for all of the equipment at “cost plus $5.00" [1] and that he would expect to be paid back in four quarterly installments after the garden was up and running. 10 The biggest ticket item was an air conditioner costing approximately $5,000.00, with other items such as an advanced electrical panel in the several thousand dollar range. 11 He said in his testimony that his deal was with Josey, although that he has also sued Worx. When this was pointed out to him on cross-examination, he said his deal was sith both Josey and Worx.

As the equipment was delivered by him to Josey, Gillespie came to meet Reteff who he understood to be involved in the Overhead business and also was Josey’s boyfriend.

He says he assumed that “S & L” was Scott and Loretta (a point which Josey denied - she says it stands for ‘sweet and low’). 12 Gillespie admits that as he was putting together the garden for Josey, it was often Reteff that assisted him rather than Josey, because Reteff was available and more technologically handy. 13 Gillespie testified that he kept track on his computer of all of the equipment that he was supplying to Josey, which he kept as something of a running invoice on what appears to be a B & C invoice form.

While the big ticket items were ordered specially, many of the smaller items were already at his shop in his inventory. 14 The total cost of the items that he included in his invoice was approximately $22,000.00, including HST. There is nothing on the B & C invoice that indicates whether or not B & C has an HST number. 15 Fast forwarding several months to October 2010, Gillespie says that he presented his copy of this running invoice and asked to be paid the first instalment. This coincided with what he claimed to be the time of the first harvest.

He says that when Josey and Reteff looked at the invoice, they noticed a discrepancy in that the cost of the air conditioner was shown as $6,285.00, which they believed was more than his cost. When he looked at his own invoice, he realized that he had added an extra amount for HST on top of a price that already included HST. He says he manually adjusted the invoice on the spot. 16 Gillespie says that under the agreement, the first instalment payment was due ten days after the first harvest. He says that it was not until December 17 or 18, 2010 that a payment was offered, because Josey was tight for money.

He said that he was supposed to pick up a cheque from Josey for one-quarter of the amount, but he was sick with the flu and sent his wife Cheryl instead. Cheryl attended at Josey’s store and was handed $3,300.00 in cash, which she brought home to Gillespie. 17 Gillespie testified that this was the only money that he ever received, and as a result things became highly conflicted and there was a total falling out in mid-January 2011. He admits that he sent some nasty text messages, of which he is not proud. He eventually sued to recover the balance of moneys he believes he is owed. Josey and Reteff’s version

18 Josey and Reteff tell a very different story. According to them, they went along with the idea of expanding the garden, but that it was Reteff that made a deal with Gillespie.

They said that the marijuana grow operation was a joint enterprise, unconnected to either of the S & L businesses, and that their agreement was that since Josey was supplying the space and most of the equipment, Reteff’s contribution to the enterprise would include what he got from Gillespie. 19 Reteff testified that he had an agreement with Gillespie under which Gillespie would supply the air conditioning unit and the electrical panel, which together were worth about $9,000.00.

The deal was that Gillespie would be paid a total of $12,000.00, with the extra $3,000.00 to compensate him for his time and effort in helping to put the garden together. Reteff says that aside from Gillespie’s help, the benefit to him was that Gillespie was putting up the money to buy the equipment which he (Reteff) otherwise could not afford at that time. 20 Most of the other equipment was purchased through Worx, or already in Worx’s inventory. 21 Reteff also testified that he bought a pound of marijuana from Gillespie, for which he owed Gillespie $1,800.00, in addition to the money for the equipment.

Reteff says that he did pay Gillespie $900.00 toward the $1,800.00, and that much of the dispute that arose in January 2011 concerned Gillespie’s impatience to be paid the rest. 22 Both Reteff and Josey testified that they handed over cash payments to Gillespie on three occasions: $3,000.00 in July 2010, $4,000.00 in November and $3,300.00 on the December occasion when Cheryl Gillespie picked it up. They called one witness who corroborated these three payments, Frankie Criddle, who is an Overhead employee.

He testified that he was present and watched the money - all $20.00 bills - being counted out. 23 Reteff testified that he assumed Gillespie wanted cash, as most transactions in the marijuana business are done in cash.

He denied that Gillespie ever stipulated payment by cheque. (I note that there is no evidence that Gillespie protested the cash payment of $3,300.00, which would not have been correct according to his version of the deal, in that it was not as much as he said he expected, and ought not to have been in cash.) 24 Reteff and Josey both testified that there was no need for Gillespie to supply all of the other equipment, since it was all equipment that Worx either had in stock or could get from its own suppliers.

They were adamant that the only things that Gillespie supplied other than the air conditioner and the electrical panel were a few used pumps. 25 Josey and Reteff both testified that Gillespie never presented them with an invoice, and in particular that they had never seen the invoice that Gillespie introduced at trial as something presented to them in October 2010; in fact, they claimed that they had not seen that document until a day or two before this trial when it was exchanged between lawyers. 26 Josey and Reteff both testified that they were suspicious of the amount that Gillespie was attributing to the air conditioner, and that they asked him to supply a copy of his invoice for that equipment, which he never did supply.

The belief that he was ripping Reteff off was a significant reason for why the relationship blew up. 27 The other reason was that Gillespie started making strong demands for money in January 2011, which Reteff said had to do with the pound of marijuana that Gillespie had supplied.

At one point Gillespie became belligerent, threatening to “tell every crack head that there’s meds in the store.” By then Josey was adamant that she wanted nothing more to do with Gillespie. 28 I have not yet mentioned the fact that the electrical panel had to be sent back to BC to be modified, at Reteff’s expense ($850.00), but by the time it returned there was already a dispute and Gillespie intercepted its delivery. That is where it remains. This is an item that Gillespie valued at $2,000.00 in one version of his invoice, and at $3,400.00 in a later version.

Other evidence 29 There was very little evidence that could be said to derive from totally neutral sources. Gillespie’s wife Cheryl testified to the fact that she saw her husband packing some unspecified gear into the van, which he told her was destined for Josey and/or Reteff. This does not exactly corroborate Gillespie’s version of events, as it could have all been in connection with the air conditioner and electrical panel, or it might have been the used pumps that Gillespie supplied. It might also have been for someone else.

Cheryl also testified that it was only Josey who was with her when the $3,300.00 was paid in December, although she admitted that there were others who were not far away. This differs slightly from what the witnesses called by Reteff and Josey said, which was to the effect that Frankie actually saw the bills being counted out, while Reteff was not far away. I make little of this distinction, as I believe it is possible that Cheryl failed to recall or notice Frankie looking on.

Furthermore, there is no reason for Frankie to lie about this since the fact of the payment is not disputed, and Frankie was present and heard Cheryl testify before he gave his evidence. 30 Josey’s brother Chris Josey testified that he met Gillespie through his sister, and that they talked about possibly setting up a garden for Chris. He says that Gillespie offered to help in exchange for one-half of the harvest, which was when Chris lost interest. 31 Gillespie introduced letters written by two of his suppliers, representing that they had not sold certain equipment to Worx - namely certain chillers or pumps.

He put this forward as evidence that Josey, Reteff and Worx must have gotten these items from him, as (he testified) these are the only suppliers from whom these specific items can be sourced. In response, Josey and Reteff supplied invoices indicating that they had actually purchased these items, or similar ones, from a different supplier and from one of the ones that Gillespie stated was an exclusive supplier. 32 I also reviewed transcripts of text messages passing between Gillespie and Reteff in January 2011. Each party claimed that the messages were consistent with their version of the events.

Below are some of the texts which contain what I see as significant statements, or omissions, with my comments. 33 I should mention that what I was supplied with was probably not an exhaustive transcript of the texts, and Reteff also gave evidence that at a certain point he simply was not interested in communicating with Gillespie and his failure to reply should not be taken as any confirmation of whatever Gillespie states in the text. January 13, 2011 1340 Gillespie to Reteff I gave u something in good faith scott, I trusted you!! Its been 14 weeks since I gave it to you and u have been fucking me around.

I have been waiting for 12 weeks for my pumps also and u have been fucking me on that. You had 12 large 4 weeks ago, I want my money tomorrow morning 10 am As has already been mentioned, the major area of dispute was the “something” which was a pound of marijuana. This text mentions pumps, but no other equipment. Gillespie’s evidence initially was that he had lent Reteff money, which almost certainly was not the case. Once Reteff conceded that it was a pound of marijuana, Gillespie did not contest that. Gillespie was asked what he meant by “12 large” and testified that this was slang for 12 pounds of marijuana.

There was no evidence from anyone that such a large quantity of marijuana had been involved.

January 13, 2011 1341 Scott to Ben Your order is at the shop. Pick it up . Then you r not permitted there again. We will work out what u owed and pay you. I will not be threatened. It is unclear what Scott means by “order”. This may be code for money related to the marijuana transaction. January 13, 2011 1342 Scott to Ben Your pumps are broken . You need to fix them The used pumps appear to have been a bone of contention. January 13, 2011 1343 Ben to Scott Why did u wait sooooo long that I had to threaten you? Why didn't u pay me like a man?

When someone owes somebody for so long no wonder there is threats January 13, 2011 1344 Ben to Scott You broke my pumps, u fix them. They r your pumps I!! January 13, 2011 1347 Ben to Scott Not if you burned them out, I will see when I open them up January 13, 2011 1347 Scott to Ben And if anything else goes wrong its half. You and I r done January 13, 2011 1348 Ben to Scott Just pay me scott, fuck sakes man, I should be the last person you should stab in the back

January 13, 2011 1349 Ben to Scott Why do you always cause trouble with me? January 13, 2011 1351 Scott to Ben You threatened me. You can have all gear back. We r finished. Done. The term “all gear” is not inconsistent with either version of the deal. January 23, 2011 1352 Ben to Scott Like fuck!!!!!!!

You will b paid a visit tomorrow, we will see January 23, 2011 1353 Scott to Ben Bring it on Gelespie January 13, 2011 1353 Ben to Scott Lil girlie boy, I will C u tonight January 13, 2011 1354 Scott to Ben Call me ill meet u anytime January 13, 2011 1355 Ben to Scott I am going to tell every crack head that there's meds in that store. Won't be safe for years This was the threat that apparently fractured the relationship as far as Loretta was concerned.

January 13, 2011 1407 Scott to Ben Loretta and I don t want you in our shop Now she worried about your crack head threat. We will call the police if they continue. Do not text me January 13, 2011 1409 Ben to Scott To damn bad bro, you r the one doing this Not me. Just pay me. End this January 13, 2011 1410 Ben to Scott Call the police Scott, sure they would like to know about all kinds of things January 13, 2011 1410 Scott to Ben Show me something in writing. January 13, 2011 1410 Ben to Scott What?

January 13, 2011 1528 Ben to Scott Hi guys, your right this isn't going to work could you please bring all of the equipment down to the garage so I can pik it up quickly. Please make arrangements for the crane so we can lift the ac compressor off the roof and be ready to load. You can take the cost from what u owe me. Mon, tues or wed is good for me. Let me know what day is best for you. Its to bad it didn't work out. Btw, let me know and I will send darren to disconnect the ac. Thanks Again this is not inconsistent with either version of the agreement.

January 17, 2011 1010 Ben to Scott R we still on for wed at 6

several texts omitted ... January 17, 2011 1019 Scott to Ben Ben Loretta and I are going to call the police we have been threatened for last time. Do not try and contact us. We r done. It is not clear what further threat, if any, Gillespie made to provoke this response. January 17, 2011,1137 Ben to Scott Please feel free to call the police anytime u like, I will have a lot to say esp 2 people u sold clones 2 who will tell the police that. We are done scott, once I get my equipment back we won't talk again. I have your receipt for s and I purchasing the 23000 in equipment from my business. In writing.

The reference to $23,000.00 is consistent with Gillespie’s version. However, his statement that he had a written receipt for S & L purchasing equipment was not borne out by the evidence, as he was not able to produce any such thing. Reteff’s explanation for not questioning the reference to $23,000 is that he had basically stopped responding to Gillespie. Several texts omitted ... January l7, 2011 1531 Ben to Scott Scott, please stop. I talked to loretta and she said I could text her anytime. I don't want any issues.,. Just my equipment back. That's all!! Again these are not inconsistent with either version.

January 17, 2011 1537 Ben toScott That equipment is owned by my business until its paid for.

January 17, 2011618 Ben to Scott Hi guys. Sitting in my living room with cpl nick cashe of the rcmp h and b indoor grow unit. I have dealt with him many times. He has reviewed all of scotts texts since last week about my equip coming back to me on wed and he laughed at the one lorreta just sent about there being nothing there mine. He says I have 2 choices, charge you with theft or take u to court. These texts plus the serial numbers for all the goods I ordered that r in yur possession and 5 people from different stores I ordered from prove this. This can stop now or it can get messy, its completely up to you.

The “serial numbers” referred to proved to be for two items only - the AC unit and the electrical panel - which Reteff and Josey concede were supplied. Gillespie had no serial numbers for any other equipment. The “5 people from different stores” overstated what Gillespie attempted to establish from two merchants, which evidence I have already commented upon.

January 17, 2011 1619 Ben to Scott U will be responsible for all court costs January 17, 2011 1621 Ben to Scott I will call my lawyer on wed if I haven't heard from you January 17, 2011 1640 Ben to Scott Mick has just left, I did not tell him about anything your doing other than the equipment issue. Guys, for both our sakes lets end this peacefully. You wanna do what you wanna do upstairs. Don't let this shit end all that. It didn't work out and that's ok, don't try to steal from me 2. January 25, 2011 1345 Ben to Scott & Loretta This is some beautiful 3 phase panel I am looking at. Very well done!!

This was when the electrical panel, which had been sent back to BC for modifications, was intercepted by Gillespie.

January 25, 2011 1415 Ben to Scott and Loretta My lawyers name is tony amoud at boyne and clarkif u wish to discuss this. He is filing suit against you,scott, sI worx hydro and sl worx overhead doortomorrow. Steve and darren (ac guy) are testifyingagainst you. Excel air systems have sent me serialnumbers and hydrotek has done the same. I canprove everything I have said. Once the court docs arefiled I will not entertain ANY deals at all. Suit is for25000. 2 choices, make a deal now or 1, pay me theamount the court deams fit or don't pay me and closedown the building. If I were you I would talk to alawyer!!!

This text contained a number of threatsthat Gillespie did not deliver upon. January 25, 2011 1416 Ben to Scott & Loretta Today !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! January 25, 2011 1754 Ben to Scott & Loretta Stop calling darryl, he doesn't want anything to dowith u or your store. He will not build u anotherboard until u have paid for this one. The serialnumbers match on this board for court Comments on credibility generally 34 Triers of fact do not have a crystal ball, and have to try to discern what happened based on a jumble of self-serving and oftenconflicting statements.

It is rare that a fact-finder can determine who is lying and who is telling the truth, simply by the witnesses’demeanor. Many liars are skilled at projecting sincerity, while truth-tellers may be nervous or otherwise lack a convincing air. As such,the choice of who to believe usually involves a weighing of the evidence for consistency with other evidence and its overall probability. This was well and famously stated by the British Columbia Court of Appeal in Faryna v. Chorny (BC CA), [1952] 2D.L.R. 354 (B.C.

C.A.), at p. 357: The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether thepersonal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examinationof its consistency with the probabilities that surround the currently existing conditions.

In short, the real test of the truth of the story of awitness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person wouldreadily recognize as reasonable in that place and in those conditions... 35 This is not to say that witness demeanor is entirely irrelevant. I will say that I initially found Gillespie to be fairlyconvincing, in the sense that he appeared to have strong convictions and believed in the rightness of his cause. As I heard more,however, I began to have doubts.

I took note of the fact that he initially testified that he had lent money to Reteff, which was not thetruth. In fact he had most likely sold a pound of marijuana to Reteff. I do not know if this was a legal or illegal transaction, sinceeveryone involved in this case appeared to have medical marijuana licences. While Gillespie’s motive to lie about this may have to do with his reluctance to admit in court to selling marijuana[2], the fact that he chose to lie indicates to me that he was prepared to lie when itsuited him.

36 The evidence of Reteff and Josey was convincing, in the sense that I did not get the sense that either of them was lying or concealing anything. They seemed more sad than angry. On demeanor alone, I would tend to favour the Reteff and Josey version of the events. 37 Looking to the inherent probabilities, in the case at hand, several things about the Gillespie version of the deal strike me as improbable. 38 The notion of “cost plus $5.00" suggests that Gillespie was essentially doing all of this work, and laying out his own money, for no return.

There is no explanation for why he would put himself out to this extent for people who were at most acquaintances. Was it out of the sheer goodness of his heart? I have my doubts. Had he stuck to the theory contained in the Claim, which refers to cost plus $5,000.00, it would come up against the improbability (on all of the evidence) that Josey would pay this much money to have Gillespie’s involvement in something that, had she set her mind to it, she could easily have done herself with the help of Reteff.

She had the suppliers and could have accessed the information needed, and Reteff had some technical skills dealing with equipment and electrical issues. 39 Gillespie’s statement that he expected to be paid by cheque is at odds with the one payment he admits receiving. There is nothing to indicate that he protested the method of payment or the amount. 40 According to Gillespie, he was charging HST, which in turn would have meant that (under his theory) Josey or Worx was paying HST.

Were that the case, Josey would have insisted on a proper paper trail (i.e. an invoice with HST number, and payment by cheque or at least a written receipt) so that she could claim the appropriate HST input credits. The fact that cash was used as the method of payment suggests that there was no agreement to charge and pay HST. There is also no indication on the B & C “invoice” that it even has an HST number. 41 As is conceded, a $3,300.00 payment was made in mid-December.

According to Gillespie’s theory, payment was supposed to be made over a year in four installments, in which case he should have been prepared to wait three months for further payment, which would have taken him to about March 2011. Instead, as we see, things got nasty in mid-January. While I can appreciate that Gillespie was angry about Reteff’s failure to pay for the marijuana that he had purchased, there is no reason why this should have impacted on the deal that Gillespie claimed he had with Josey .

In his evidence, Gillespie was adamant that it was Josey who owed him the money, yet his texts were directed at Reteff. 42 In the texts Gillespie seems inordinately concerned about his pumps, which he testified were a couple of used pumps which he did not even bother listing in his running invoice.

This does not make sense in the context of his theory of a much larger deal, but is more consistent with Reteff’s version. 43 As can be seen from some of my comments about the texts, obviously Gillespie was already making noises about supposedly $23,000.00 in equipment, but he made several statements which proved to be untrue, including most significantly that he had a written receipt for the equipment signed by Josey and/or Reteff.

He did not produce any such thing. 44 While sheer numbers of witnesses is not in itself a major factor, I do note that Reteff and Josey, as well as three other witnesses all gave evidence which was internally consistent and which contradicted some part of Gillespie’s testimony. The evidence of Cheryl Gillespie did not impact on any of the live issues.

So it is truly Gillespie’s word against all of the others. 45 In the end, Gillespie’s evidence is too flawed and improbable to be accepted, while the evidence of Josey and Reteff basically holds water. 46 Once again, I must emphasize that the standard of proof in this court is the “balance of probabilities,” which means that I must choose the version of events which seems most probable, even if just slightly more so.

47 While I am not convinced that the Josey and Reteff version of the deal is correct in every detail, it is still the more probable of the two. I remain somewhat sceptical of the extent of the marijuana involved and the legality of that transaction.

The result 48 In the result, I find that Gillespie had no contract with Josey or Worx, and his claim (court no. 343301 ) is dismissed. 49 In the companion action, Reteff seeks two amounts against Gillespie; namely $3,637.00 and $1,712.73 which consists of: a. $3,400.00 as the amount originally paid for the electrical panel, b. plus $850.00 paid for upgrades (to the BC supplier), c. minus $613.00 said to be owing on the contract. d. $1,712.73 for loss of product caused by the missing panel. 50 The claim for loss of product was not actively pursued at trial.

There was no evidence in support of it. 51 The claim for $3,400.00 plus $850.00 has merit. The evidence was that Gillespie managed to intercept the delivery of the panel, in his bid to exact pressure on Reteff and Josey. While it is likely that there was money owing on the marijuana deal, that matter is not before me and may well be an illegal contract which the court would not enforce.

I cannot find that Gillespie had any legal basis to withhold the electrical panel. 52 The credit which Reteff offers of $613.00 is based on what he says is the quantum meruit true value of the deal, which is the panel and AC unit at cost “plus $2,315.00 for agreed services.” The only evidence which I heard placed the value of Gillespie’s services at $3,000.00. As such, the best I am prepared to do is to credit Gillespie with being owed $1,298.00 ($5,198.00 for the AC + $3,400.00 for the panel + $3,000.00 for services - minus $10,300.00 in cash payments).

As such, I am allowing Reteff $2,952.00 ($3,400.00 + $850.00 - minus $1,298.00). 53 Reteff is also entitled to costs of $89.68. Eric K. Slone, Adjudicator [1] I note that in the Claim, Gillespie’s lawyer pleads that the deal was to be cost plus $5,000.00 , but this was not Gillespie’s evidence. This is a fairly major difference. Cost plus $5.00 is basically doing it for free, while cost plus $5,000.00 builds in a significant profit. I will comment further below on the implications of either alleged deal. [2] His reference to “12 large” raises some red flags for me.

Either he was exaggerating, which impacts on his credibility, or there was a degree of trafficking going on which would call into question the legality of these transactions.