2017 ONSC 2402, 2017 ONSC 2402

CITATION : Dirckx v. Martin, 2017 ONSC 2402 COURT FILE NO.: 55/09 DATE: 20170419 ONTARIO SUPERIOR COURT OF JUSTICE BETWEE N: ) ) Leroy D. Dirckx ) ) ) Peter E. Loucks and Chris Tucker for the Plaintiff ) Plaintiff ) ) - and - ) ) ) William Martin ) ) ) Self-Represented ) Defendant ) ) ) ) HEARD: April 10, 11, 12 & 13, 2017 REASONS FOR JUDGMENT Conlan J. I. Introduction [ 1 ] The crooked seller? Or the delinquent buyer? [ 2 ] The non-disclosing, contract-breaking, misrepresenting vendor?

Or the scam-artist purchaser? [ 3 ] Two parties contracted to sell/buy a convenience store in Lion’s Head, Ontario, a small village located between Owen Sound and Tobermory. [ 4 ] The place was called Corner Convenience. It sold pretty much everything that you could imagine, plus gasoline and restaurant fare. [ 5 ] It was owned and operated by the Plaintiff, Leroy Dirckx (”Dirckx”), a real estate salesperson who also ran his business out of part of the premises. [ 6 ] Dirckx owned both the real property and the store.

[ 7 ] In February 2008, he entered into discussions with the Defendant, William Martin (“Martin”). Martin was a regular customer and a prior operator of a business at that same location. He was interested in buying the place. [ 8 ] And Dirckx was happy to sell it.

He had just experienced a set-back as the lottery terminal inside the business had been shut down. [ 9 ] Two agreements were drawn up by Dirckx and signed by the parties – one for the real property and the other for the business’ inventory and equipment (Exhibit 1, tabs 10 and 11). [ 10 ] The real property agreement was first signed in mid-February 2008 and then amended and signed again on February 21 st (Exhibit 1, tabs 10 and 13). [ 11 ] The last completion date, as indicated on the face of the February 21 st agreement, was to be March 7, 2008. [ 12 ] No formal signed agreement exists with a completion date after March 7 th . [ 13 ] In late February, before the closing of those deals, Martin took possession and started running the place. [ 14 ] Of course, hindsight is 20-20, but we know now that the decision to have Martin take possession and begin operations before closing was a bad idea. [ 15 ] Although scheduled for March 2008, the closings were delayed because Dirckx had issues with the title to the property – it was encumbered by actions taken by the Canada Revenue Agency (“CRA”). [ 16 ] “Issues” is an understatement.

Dirckx owed lots and lots of money to CRA. The latter claimed some kind of “super- priority” over even the then mortgagee, Barbara Dean. [ 17 ] In addition, Martin had financing problems. [ 18 ] Dirckx says that Martin operated the place until the Fall, and then he refused to close.

Refusal to close is not disputed by Martin; his lawyer at the time made that clear in writing in early October 2008. [ 19 ] Martin was evicted by Dirckx. [ 20 ] Eventually, in February 2009, clear title was finally obtained and the property and the business were sold to someone else for $215,000.00 ($35,000.00 less than the deal was for with Martin). [ 21 ] Alleging improper conversion of his goods, Dirckx claims for $100,000.00, plus interest and costs. [ 22 ] There are allegations by Dirckx that Martin depleted inventory, removed equipment and other stuff, destroyed things, and left the place in disrepair. [ 23 ] Further, Dirckx allegedly paid expenses for the property while Martin was in possession.

He wants to be reimbursed for those. [ 24 ] There is a Counterclaim, however. [ 25 ] According to Martin, Dirckx materially misrepresented the title to the property, the income of the business, and other things related to the business. [ 26 ] Thus, Martin has counterclaimed for (

i) lost income due to breach of contract and/or misrepresentation, $50,000.00, (ii) lost stock, equipment, improvements and repairs, $20,000.00, and (iii) exemplary damages, whether punitive and/or aggravated, $50,000.00. [ 27 ] It should be noted that Martin originally counterclaimed against both Dirckx and his employer, Crone Realty (the real estate broker), but the claim against the latter was dismissed on consent in December 2011. [ 28 ] In July 2012, the action was converted to the simplified procedure. [ 29 ] We tried this case in Walkerton starting April 10, 2017. The trial lasted four days. [ 30 ] For the Plaintiff, I heard from (

i) Dirckx (who spent nearly two full days in the witness box, divided roughly evenly between direct and cross-examination), (ii) Martin Shoemaker (a brief witness who testified about his involvement with Dirckx in regularly supplying products to the store through a wholesale distributing company before but not after Martin took over in late February 2008), (iii) Carmen Martindale (a brief witness who regularly supplied ice cream to the store, through a distributing company, up until 2005, and whose company loaned equipment to Dirckx that has since not been returned), and (iv) Anthony Dadswell (a brief witness who is a real estate agent and broker, a business partner of Dirckx, a former customer of Corner Convenience when it was run by Dirckx, and someone who was present to observe the store’s condition when it was taken back by Dirckx from Martin in October 2008). [ 31 ] Further, at the conclusion of the case for Dirckx, his counsel read-in to the record many excerpts from the examinations for discovery of Martin that were conducted on January 10, 2013. [ 32 ] Frankly, many of those read-ins were quite damaging to Martin’s Counterclaim.

[ 33 ] For the Defendant, I heard from (

i) Martin (who spent considerably less time in the witness box than Dirckx but who handled himself quite well for a self-represented litigant), (ii) Najtassa Martin (the Defendant’s daughter, a brief witness, who testified about her involvement with the store from the time of taking possession in late February 2008 through to the time of vacating in early October 2008), and (iii) Marlena Shearer (an employee of the Defendant who made observations of the condition of the store’s interior and the stock not long after Martin took possession and not long before he vacated the premises). [ 34 ] The Plaintiff called very brief reply evidence at trial – Dirckx himself.

II.

The Issues and the Key Evidence in Dispute [ 35 ] There are only a few items in dispute that are necessary to resolve in order to decide this case. [ 36 ] First, the condition of the store, its stock and its equipment at the time that Martin took possession in late February 2008. [ 37 ] Dirckx testified that the store was relatively clean, the stock was plentiful and saleable except for some older grocery items, and all of the equipment was operable but for the fridge as part of the pizza prep table. [ 38 ] On whether the stock was regularly replenished by Dirckx, and whether the stock was generally current, and whether the store was relatively clean, Martin Shoemaker corroborated the evidence of Dirckx.

Of course, on the first two points, Mr. Shoemaker could only speak to the stock that he was responsible for. [ 39 ] On whether the ice cream was regularly replenished by Dirckx, and whether the ice cream was generally current, and whether the store was relatively clean, Carmen Martindale corroborated the evidence of Dirckx, although Mr.

Martindale could not speak to anything after he stopped delivering to the store in 2005. [ 40 ] On the general condition of the store, its cleanliness, how well it was stocked, and whether the stock looked to be obviously dated, Anthony Dadswell corroborated the evidence of Dirckx. [ 41 ] Dirckx estimates the value of the inventory as of February 2008 at about $43,500.00 (Exhibit 1, tab 61). [ 42 ] For his part, Martin described the store in late February 2008 as disgusting.

To some extent, his daughter and his employee confirmed that in their testimony at trial. [ 43 ] According to Martin, not just the pizza prep table fridge was defective. The milk cooler was “junk” and effectively shut down by the Health Unit in March 2008.

The walk-in freezer was full of an ice build-up and contained unsaleable stuff. [ 44 ] In terms of the stock, Martin testified that the gas tank was almost empty (it ran out on the first attempt to fill someone’s vehicle after Martin took possession in late February 2008), the propane was almost empty, and much of the inventory inside the store was “junk” (old or even expired and inedible, and surely not saleable). [ 45 ] Martin estimates that there was about $4,000.00 to $5,000.00 in saleable stock when he took over from Dirckx in late February 2008. [ 46 ] On the general cleanliness of the store in late February 2008, the condition of its stock, the value of its stock, and the condition of its equipment, the testimony of Najtassa Martin was consistent with that of her father. [ 47 ] Marlena Shearer testified that, when she was hired by Martin in late March or early April 2008, the store’s grocery items were largely expired. [ 48 ] The second issue is whether Dirckx ever agreed to take a mortgage back on the sale to Martin of the real property and the business. [ 49 ] Dirckx testified that he did not.

He was adamant about that. [ 50 ] Martin testified that he did – the arrangement was that Martin would pay a deposit of $50,000.00, and the balance of $200,000.00 would be advanced by Dirckx by way of a mortgage at 6.5 per cent over two years, until bank financing could be arranged, as evidenced by the second page of the document located at tab 12 of Exhibit 1. [ 51 ] Third, the condition of the store, its stock and its equipment at the time that Dirckx took back possession in early October 2008. [ 52 ] Dirckx, relying in part on the photographs that he took at Exhibit 1, tab 71, testified that the place was generally dirty, messy and in disrepair.

Stock had been depleted (including movies, cigarettes, Nevada tickets, sunglasses, and watches). Some equipment and fixtures were gone (including the large above-ground gasoline tank and its pump, the soft ice cream machine, Coca Cola paraphernalia, shelving, the pizza prep table, the novelty freezer that Dirckx did not own but which he has been invoiced for by the owner in the amount of $1319.85, the fancy menu board, and the lottery terminal).

Some items were broken (including a window, the water purification system, the cappuccino machine, the milk cooler, and a commercial coffee maker). [ 53 ] To a limited extent, Mr. Dadswell’s evidence corroborated that of Dirckx in that Mr. Dadswell described the store, in early October 2008, as “not as well kept” as when Dirckx ran it, and the kitchen area “not as clean”, and “less shelving”, and “much less” stock.

The real estate office was “a mess” and “pretty dirty”. [ 54 ] To calculate his damages for the missing/broken items, Dirckx has collected a series of ads from the internet, mainly eBay (all of the documents starting at Exhibit 1, tab 73).

[ 55 ] Martin testified that the condition of the store when they were forced out in early October 2008 was deceiving because they were in the middle of a very busy “wing-night” shift and did not have time to clean-up before the photographs at Exhibit 1, tab 71 were taken. [ 56 ] Najtassa Martin confirmed that. [ 57 ] The Defendant believes that the said photographs were “staged” by Dirckx (something vehemently disputed by Dirckx in his reply testimony at trial). [ 58 ] To some extent, Najtassa Martin’s evidence is consistent with that allegation as she testified that some of the photographs, such as those of the interior of the real estate office, are not the way the space looked when she was escorted off the property by the police. [ 59 ] According to Martin, Dirckx got a windfall when he took back the property in early October 2008 by acquiring a newer pizza prep table that Martin had purchased for $335.00.

Martin had taken the old one home. [ 60 ] Martin does admit to taking the large above-ground gasoline tank, the soft ice cream machine, some Coca Cola paraphernalia, some shelving, the old pizza prep table, and some fireworks. [ 61 ] Martin testified that the cappuccino machine simply broke from normal usage. [ 62 ] In terms of the allegation of depleted stock, Martin disagrees.

He testified that he spent nearly $10,000.00 on stock in September 2008, and all of that was there when he was forced to vacate. [ 63 ] Marlena Shearer testified that the store was “a lot cleaner” near the end of when Martin ran it compared to not long after he took over from Dirckx. [ 64 ] Fourth and finally, at issue are what revenues were generated by Martin while he ran the business from late February to early October 2008. [ 65 ] Dirckx testified that he ran some till printouts after taking back the property.

They showed gross sales of $54,425.94 for the restaurant, and $480,561.43 for everything else. [ 66 ] Najtassa Martin testified that they had hired some students who often made mistakes at the tills. For example, a single sale would be punched in wrongly at thousands of dollars. According to her, they were lucky to exceed $300.00 per night in gross sales. [ 67 ] The Defendant simply cringed at the allegation that he made more than a half of a million dollars, gross, in seven months. III.

Analysis [ 68 ] One would be hard-pressed to find two persons more different than Dirckx and Martin. [ 69 ] The former is a mid-forties, university-educated, white-collar type, articulate man who speaks well and appears to have an eye for detail. [ 70 ] The latter is a late sixties, truck-driving, blue-collar type, blunt man who still believes in handshakes and focusses on the big picture. [ 71 ] Frankly, neither one I found to be generally incredible or unreliable.

Neither one can be accurately described using any of the terms expressed in the opening of these Reasons. [ 72 ] Of course, I may accept all, some or none of what any witness says. [ 73 ] In this case, where they disagree, my preference for one party’s evidence over the other depends on common sense and the other evidence adduced at trial – the documents and the testimony of the collateral witnesses.

The State of the Store, its Inventory and its Equipment in Late February 2008 [ 74 ] I accept the evidence of Dirckx, corroborated to some extent by that of his three collateral witnesses, that the store was generally clean and tidy while the business was being operated by the Plaintiff. [ 75 ] That evidence is not necessarily inconsistent, however, with the testimony of Martin, his daughter and his employee to the effect that things were in bad shape by late February 2008. [ 76 ] The two positions can co-exist. [ 77 ] What I think happened here is simple.

It is human nature that Dirckx, knowing that Martin did not care much about the state of the store, let things go in the few weeks preceding the hand-over in late February 2008. [ 78 ] In terms of the state of the store’s equipment, when one peels away the skin from the fruit, very little is controversial. Thus, the equipment issues are dealt with below in these Reasons, under the heading “Other Relevant Items Not in Dispute”. [ 79 ] Unfortunately, neither side’s evidence is that reliable on the inventory dilemma.

[ 80 ] On the one hand, we have the document prepared by Dirckx at tab 61 of Exhibit 1. That estimates the wholesale value of the inventory to be $43,500.00 as of the end of 2007. According to Dirckx, that figure was still accurate as of late February 2008. [ 81 ] Allowing for some discounts related to propane and gasoline, in a document titled “Damages” (hereinafter referred to as “damages calculation”), which document was relied upon by Mr.

Loucks in his closing submissions at trial on behalf of the Plaintiff, $42,350.00 is the figure suggested for the inventory. [ 82 ] On the other hand, we have the evidence of Martin, corroborated to some extent by his daughter and his employee, about the staleness of much of the inventory. [ 83 ] The Defendant, quite rightly, points out that the document at tab 61 of Exhibit 1 is not a proper accounting of inventory as it is very generic (for example, how many watches and at what cost per item?). [ 84 ] Martin places a rough value on the inventory as of late February 2008 of between $4000.00 and $5000.00.

That is, to say the least, very “rough”. There are no documents to support it.

And it takes into account only what Martin describes as “saleable” stock, which is likely a subjective term, to some degree. [ 85 ] In the circumstances, I shall do the best that I can in fixing a value for the store’s inventory as of late February 2008. [ 86 ] Using the document at tab 61 of Exhibit 1 as a guide, I allow the following: Restaurant - $3000.00 (the full amount sought by Dirckx); Restaurant supply and paper products – a nominal amount of $100.00 (there must have been some of these products handed over, however, the $2000.00 requested is far too generic); Restaurant and store cleaning products – a nominal amount of $100.00 (for the same reasons as for the prior item); Cigarettes - $2500.00 (the full amount sought by Dirckx); Gas – nil (I accept the evidence of Martin that it ran out on the first attempt to fill a customer’s tank); Movies - $3000.00 (the full amount sought by Dirckx); Grocery – nil (I accept the evidence of Martin and his witnesses that the grocery items were largely expired and “junk”); Camping supply – a nominal amount of $100.00 (for the same reasons as above); Fireworks – a nominal amount of $100.00 (for the same reasons as above); Ice cream and ice cream novelty - a nominal amount of $100.00 (for the same reasons as above); Magazines and books – a nominal amount of $100.00 (for the same reasons as above); Bagged candy racks – a nominal amount of $100.00 (for the same reasons as above); Three candy racks at the front - $3500.00 (the full amount sought by Dirckx because, although the figure is not detailed in the document at tab 61, the Court has confidence in the conclusion that those racks were turned over frequently right up until February 2008, given the evidence of Martin Shoemaker, which evidence I accept); Prepack chocolate – a nominal amount of $100.00 (for the same reasons as above); Watches – a nominal amount of $100.00 (for the same reasons as above); Sunglasses – a nominal amount of $100.00 (for the same reasons as above); Propane – nil (I accept the evidence of Martin that it ran out almost immediately after he took possession of the property); Wood – a nominal amount of $100.00 (for the same reasons as above); Pop coolers – a nominal amount of $100.00 (for the same reasons as above); Film, cameras, and batteries – a nominal amount of $100.00 (for the same reasons as above); Total - $13,300.00. [ 87 ] That is the figure that will be allowed for inventory as of late February 2008, subject to an adjustment outlined below in these Reasons. [ 88 ] Wherever the item in question has been detailed in the document at tab 61, such as cigarettes, or, alternatively, where the item has not been detailed but is supported by other evidence, such as the three front candy racks and the testimony of Martin Shoemaker, I have accepted the figure as provided by Dirckx.

[ 89 ] In a few instances, such as gasoline, based on the evidence of Martin that I have accepted, I have applied a value of nil. [ 90 ] Otherwise, where the item in question is described in only the most generic terms in the document at tab 61 of Exhibit 1 and was not filled-out by other evidence at trial, I have assigned a nominal value of $100.00. [ 91 ] Remember, it is the burden of the Plaintiff to prove, on a balance of probabilities, his damages.

The Mortgage Arrangement [ 92 ] Frankly, it is not necessary to resolve the dispute about whether Dirckx ever agreed to be Martin’s mortgagee in order to render judgment on the Claim and Counterclaim, however, I have elected to do so in any event. [ 93 ] There are two reasons for that. First, Martin is self-represented. The issue is very important to him, and I think that he deserves an answer.

Second, the resolution of this item involves some analysis of credibility and reliability and, thus, may be seen as impacting my findings on the other key issues in the case. [ 94 ] I accept the evidence of Martin that, initially, Dirckx offered to hold the mortgage. [ 95 ] In my view, there is no other explanation for the handwriting on the document at tab 12 of Exhibit 1 (the second page – “$50,000.00, $200,000.00, 6.5”). [ 96 ] It makes no sense that the said handwriting meant what Martin could get for a mortgage from his bank. 6.5 per cent is far too high for it to have been the rate that Martin would have been charged by his bank on the $200,000.00 because I accept the evidence of Martin that he was charged just a fraction of that rate when he borrowed from his bank the $50,000.00 for the deposit. [ 97 ] It is natural that a private lender, like Dirckx, would have charged a higher rate than the bank, something in the range of 6.5 per cent. [ 98 ] I also think, however, that the arrangement quickly changed after the initial discussion in the office at Corner Convenience, when the document at tab 12 was created. [ 99 ] Dirckx did not remain willing/able to hold the mortgage for long, which explains why the written agreements between the parties do not contemplate any type of vendor take-back mortgage.

By then, any notion that Dirckx would hold the mortgage was off the table.

The State of the Store, its Inventory and its Equipment in Early October 2008 [ 100 ] I do not believe that Dirckx “staged” any of the photographs in question. [ 101 ] He may have tidied up the office, which explains why it looks different, in the photographs at tab 71 of Exhibit 1, than what Najtassa Martin remembers, however, Dirckx did not deliberately make the place look worse than it was when the Martins vacated. [ 102 ] I also accept, however, the evidence of Martin that the photographs show what the place looked like in the middle of a very busy shift, and thus, the messiness is understandable. [ 103 ] I accept the evidence of Martin that he bought a newer pizza prep table for $335.00, and that Dirckx got the benefit of that item when he took back the property in early October 2008. [ 104 ] I am not, however, accounting for that fact in the damages assessment.

Martin should not have taken property from the store that was not his to take, such as the gasoline storage tank and shelving, among other items, and the price that he will pay for that is to forfeit the value of the newer pizza prep table that he surrendered to Dirckx. [ 105 ] As for the stock that Martin purchased not long before he vacated the property, I accept that he spent close to $10,000.00. But he also sold some of that stock, as he admitted to Mr.

Tucker in cross-examination at trial. [ 106 ] Just as I have penalized Dirckx for some of his generic stock calculations, I cannot deduct all of the nearly $10,000.00 from the overall damages calculation in favour of the Plaintiff based on the same type of generic evidence from Martin. [ 107 ] I have to deduct something, however, as otherwise it amounts to a windfall for Dirckx.

Clearly, the store was not empty of inventory as of early October 2008. [ 108 ] I will deduct roughly half of what Martin spent on stock in September 2008, $5000.00, from the $13,300.00 figure indicated above, bringing the amount for damages related to inventory to $8,300.00 .

The Revenues Earned While Martin Ran the Business [ 109 ] As with the mortgage issue, it is not strictly necessary to resolve the dispute about how well Martin did financially with the business in 2008, but, for the same reasons articulated with regard to the mortgage issue, I have elected to confront it anyways. [ 110 ] I do not believe for a minute that Martin made anything close to about $535,000.00, gross, between late February and early October 2008. [ 111 ] I cannot explain the till printouts relied upon by Dirckx, however, they must be wrong. [ 112 ] It is absurd to suggest that Martin, in seven months or so, made more money, gross, than what Dirckx made over an

entire year when the business was thriving (see the handwritten gross monthly revenues figures on page 1 of the document at tab 12 of Exhibit 1). [ 113 ] I do not know what Martin made in revenues, but I know that it was significantly less than a half of a million dollars. Perhaps Najtassa Martin’s evidence about problems with students operating the tills explains the discrepancy.

Other Relevant Items Not in Dispute Gasoline Storage Tank [ 114 ] Martin admits that he took the gasoline storage tank from the property. [ 115 ] It still exists, although the passage of some nine years and its likely deteriorated condition today make it impractical to order that it simply be returned to Dirckx. [ 116 ] The only task is to ascertain a reasonable replacement value for it. [ 117 ] Dirckx testified that he paid about $20,000.00 for the unit in 1999. [ 118 ] At tabs 73 through 76 of Exhibit 1 are printouts from the internet compiled by Dirckx to give an idea of what similar units cost currently. [ 119 ] The item at tab 74, according to Dirckx, is most comparable to what he had.

That is a new unit that is selling for $21,058.82 (US dollars, according to Dirckx). Dirckx testified that the said quote excludes shipping, installation and import duties. [ 120 ] In his damages calculation, Dirckx asks for $21,000.00, Canadian, for the gasoline tank and the pump. [ 121 ] In my view, that is far too high. It is more than what Dirckx paid for the unit some nine years before it was removed from the property. [ 122 ] Accounting for that passage of time, and allowing for depreciation, and taking into consideration the document at tab 74, I fix the replacement value of the unit at $10,000.00.

Ice Cream Novelty Freezer [ 123 ] Dirckx testified that this item, owned by the Martindale distributing company, was removed from the property by Martin or someone on his behalf. [ 124 ] In his testimony, Martin neither confirmed nor denied that. [ 125 ] I accept the uncontradicted evidence of Dirckx, corroborated in part by the testimony of Carmen Martindale. [ 126 ] At tab 78 of Exhibit 1 is an unpaid invoice from the owner of the item to Dirckx (Corner Convenience) dated October 3, 2008, in the amount of $1319.85. [ 127 ] That is the amount sought by Dirckx in his damages calculation, and that is the amount that is granted.

Coca Cola Paraphernalia [ 128 ] Martin admits that he took the Coca Cola stuff from the property. [ 129 ] It still exists, although, as with the gasoline storage tank and pump, the passage of some nine years and its likely deteriorated condition today make it impractical to order that it simply be returned to Dirckx. [ 130 ] Again, the only task is to ascertain a reasonable replacement value for it. [ 131 ] At tabs 79 through 85 of Exhibit 1 are printouts from the internet compiled by Dirckx to give an idea of what similar items cost currently. [ 132 ] Some of these items described in the various tabs are new, and some are used.

All are listed in US dollars. [ 133 ] I will accept the word of Dirckx, unchallenged at trial, that these items at tabs 79 through 85 are roughly comparable to what were taken. [ 134 ] In Canadian dollars, Dirckx’s damages calculation has a figure of $543.61 for everything except the lighted menu board (see Exhibit 2 at trial – the currency conversion document, for the methodology in arriving at that number). [ 135 ] I will round that figure down to and allow an even $500.00. [ 136 ] As for the lighted menu board, there is no invoice and no estimate(

s) of any kind provided by Dirckx. He simply opined during his testimony that it would be worth about $1000.00 to $1500.00. That was not challenged at trial. [ 137 ] For the lighted menu board, I will allow $1000.00. Soft Ice Cream Machine

[ 138 ] Martin admits that he took the soft ice cream machine from the property. [ 139 ] It still exists, although, as with the gasoline storage tank and pump and the Coca Cola paraphernalia, the passage of some nine years and its likely deteriorated condition today make it impractical to order that it simply be returned to Dirckx. [ 140 ] Once again, the only task is to ascertain a reasonable replacement value for it. [ 141 ] At tab 86 of Exhibit 1 are printouts from the internet compiled by Dirckx to give an idea of what a similar item costs today. [ 142 ] All of these items described at tab 86 are used.

All are listed in US dollars. [ 143 ] I will accept the word of Dirckx, unchallenged at trial, that these items at tab 86 are roughly comparable to what was taken. [ 144 ] In Canadian dollars, Dirckx’s damages calculation has a figure of $5200.00 for the soft ice cream machine. The cheapest comparable item at tab 86 was used to arrive at that figure. [ 145 ] I will round that figure down to and allow an even $5000.00.

Water Purification System [ 146 ] Dirckx testified that the business had a special water purification system that was aimed at improving the taste of the coffee for the patrons. [ 147 ] Inexplicably, according to Dirckx, that system was completely broken when he took back the property in early October 2008. [ 148 ] In his testimony at trial, Martin neither confirmed nor denied that. [ 149 ] I accept the uncontradicted evidence of Dirckx. [ 150 ] At tab 87 of Exhibit 1 are printouts from the internet compiled by Dirckx to give an idea of what a similar system costs today. [ 151 ] The items described at tab 87 are new.

They are listed in US dollars. [ 152 ] I will accept the evidence of Dirckx, unchallenged at trial, that these items at tab 87 are roughly comparable to what was in place before Martin took over the business in late February 2008. [ 153 ] In Canadian dollars, Dirckx’s damages calculation has a figure of $1045.00 for the water purification system.

The most expensive comparable item at tab 87 was used to arrive at that figure, except that it was discounted by fifty per cent to account for the difference between a new and a used system. [ 154 ] I choose to rely upon the cheaper comparable item at tab 87, and then discount that by fifty per cent. That results in a figure of $394.00 ($788.00 Canadian, divided by two). [ 155 ] I will allow that amount, $394.00.

Milk Cooler [ 156 ] It is undisputed that a working milk cooler was part of the equipment handed over to Martin by Dirckx in late February 2008, and it is also undisputed that no working milk cooler was there when the business was taken back by Dirckx in early October 2008. [ 157 ] In Canadian dollars, Dirckx’s damages calculation has a figure of $956.50 for the milk cooler (relying upon the roughly comparable item described at tab 88 of Exhibit 1, and then discounting that cost by fifty per cent to account for the difference between a new and a used item). [ 158 ] I am not allowing anything for the milk cooler. [ 159 ] I accept the evidence of Martin that the item was pretty much “junk”.

Very shortly after taking possession, in March 2008, the Health Unit attended at the property and effectively shut down the cooler because it was not holding its refrigeration charge. [ 160 ] On that basis, I am satisfied that the item was essentially worthless as of late February 2008.

Cappuccino Machine [ 161 ] As with the milk cooler, it is undisputed that a working cappuccino machine was part of the equipment handed over to Martin by Dirckx in late February 2008, and it is also undisputed that no working cappuccino machine was there when the business was taken back by Dirckx in early October 2008 (the machine was there but was inoperable). [ 162 ] In Canadian dollars, Dirckx’s damages calculation has a figure of $875.00 for the cappuccino machine (relying upon the cheapest roughly comparable item described at tab 89 of Exhibit 1).

[ 163 ] I will allow $500.00 for the cappuccino machine. [ 164 ] It is clear that it was used by Martin for a while but then broke down from normal wear and tear. I suspect that it was not in great condition as of late February 2008, which explains why it did not last long. [ 165 ] That also explains why I have reduced the figure from the $875.00 sought to an even $500.00.

Coffee Maker [ 166 ] In Canadian dollars, Dirckx’s damages calculation has a figure of $92.50 for the commercial coffee maker (relying upon the roughly comparable item described at tab 90 of Exhibit 1, and then discounting that by fifty per cent to account for the difference between a new and a used piece of equipment). [ 167 ] I am not allowing anything for the coffee maker. [ 168 ] I give Dirckx credit for being candid enough near the conclusion of his direct examination at trial to say that he cannot remember whether the coffee maker was still there or not, broken or not, in early October 2008. [ 169 ] Given that evidence, nothing can be allowed for the coffee maker.

Water Charges and Property Taxes [ 170 ] I accept the unchallenged, uncontradicted evidence of Dirckx that a part of the agreement between the parties was that Martin, while in possession of the property and while operating the business before closing, would be responsible for the water charges and the property taxes.

That only makes sense. [ 171 ] I also accept the undisputed evidence of Dirckx that Martin’s shares of the water charges and property taxes for the number of days that he was in possession of the property from late February to early October 2008 are $452.05 (water) and $1411.41 (taxes). [ 172 ] Those amounts will be allowed.

Rent [ 173 ] Dirckx asks for $15,750.00 for rent ($2250.00 per month for seven months while Martin ran the business). [ 174 ] Notwithstanding that Martin did not address this issue in his evidence, I am not allowing anything for rent. [ 175 ] First, there is nothing in any of the written agreements between the parties dealing with rent, as acknowledged by Mr. Loucks in his closing submissions at trial. [ 176 ] Second, there is no evidence of any verbal agreement between the parties on the issue of rent to be paid by Martin. [ 177 ] Third, Dirckx himself testified that there would be no rent payable.

Although he qualified that by saying it was on the understanding that the deal would close, the fact is that Martin is not to blame for the failure to provide clear title for many, many months. [ 178 ] Fourth and finally, I accept the evidence of Najtassa Martin that there was an offer, initially, to pay rent, but that was declined by Dirckx because he expected that the deal would close in relatively short order. [ 179 ] When that did not come to fruition, in my view, it was incumbent on Dirckx to go back to the Martins and make it clear that rent would be charged for the time that they were in possession, regardless of whether the deal closed.

Dirckx did not do so. [ 180 ] Thus, in total, the damages related to equipment, water charges and property taxes amount to $20,577.31. Martin’s Counterclaim [ 181 ] Martin’s trial evidence was very clear that he is advancing just two aspects of his Counterclaim – misrepresentation and aggravated damages for stress-related issues. [ 182 ] On the former, Martin concedes that there are no damages sustained. He wants his legal costs paid, $35,000.00.

As the Court explained to him during the trial, that request will have to wait until after judgment is rendered. [ 183 ] Besides, the read-ins from Martin’s examination for discovery obliterate any hope of establishing liability on the part of Dirckx for misrepresentation. [ 184 ] Martin knew, before the deal was made, that it was a failed business. He knew that Dirckx owed close to $300,000.00 to

the tax authorities. He knew that Dirckx could not get clear title right away. The financials of the business were irrelevant to Martin. He knew that the inventory was all “junk”. It was a fire-sale. The equipment did not really matter. He knew that a lot of the stock wasdated. He was taking the business as it was. [185] On the latter issue of aggravated damages, I adopt the following comments of Justice Trimble in Kakoutis v.

Bank ofNova Scotia, 2016 ONSC 2300, at paragraph 28. [28] The stress of litigation, or as it is more frequently called “litigation neurosis” is not compensable in and of itself (see Landry v.Landry, 2012 NSSC 443 , 2012 NSSC 443 (S.C.) at para. 37; Bullock v. Trafalgar Ins. Co., [1996] O.J. No. 2566 (S.C.J). Inorder for psychological injury to be compensable, it must be a serious, prolonged and rise beyond ordinary annoyances, anxieties andfears that people accept (see Mustafa v. Culligan, 2008 SCC 27 , [2008] 2 S.C.R. 114 at para. 9. The psychological effectsclaimed by Mr.

Kakoutis do not reach the level required to be independently actionable. They appear to be the physical manifestationsof ordinary and transient upsets that come with hotly contested litigation. [186] Martin has not met that test. IV. Conclusion The Plaintiff’s Claim [187] The Claim is allowed in part. The damages are assessed at $28,877.31 ($8,300.00 for inventory, plus $20,577.31 relatedto equipment, water charges and property taxes). [188] Judgment for the Plaintiff in that amount, $28,877.31. [189] Prejudgment and post-judgment interest will apply.

If there is any disagreement about the rates or the start date for theprejudgment interest, I may be spoken to. The Defendant’s Counterclaim [190] The Counterclaim is dismissed. Costs [191] This may be a case for no costs, however, I will entertain submissions orally in that regard, if desired by either side. Thetrial coordinator in Owen Sound must be contacted within fifteen days of the release of these Reasons to

schedule a Court attendance forthat purpose. [192] On its face, success has been divided. The Plaintiff succeeded in his Claim but for less than one-third of the totaldamages requested by the end of the trial ($92,245.92). The Defendant was entirely unsuccessful on the Counterclaim. ___________________________ Conlan J. Released: April 19, 2017 CITATION: Dirckx v. Martin, 2017 ONSC 2402 COURT FILE NO.: 55/09 DATE: 20170419

ONTARIO SUPERIOR COURT OF JUSTICE BETWEE N: Leroy D. Dirckx Plaintiff - and - William Martin Defendant REASONS FOR JUDGMENT Conlan J. Released: April 19, 2017