QUEEN’S BENCH FOR SASKATCHEWAN Citation: 2005 SKQB 454 Date: 2005 10 25 Docket: Q.B. No. 753/2004 Judicial Centre: Prince Albert BETWEEN: LANI RAE ROBERTS and 627089 SASKATCHEWAN LTD. carrying on business as “E MAUTO BROKERS 1999” and KELLY EISWERTH Counsel: John D. (Jack) Hillson for the plaintiff Ronald J. Mills, Q.C. for the defendants JUDGMENT KONKIN J. October 25, 2005 [1] In this action, which is under the simplified procedure rules, the plaintiff seeks damages in the amount of $50,000 plus interest in accordance with the provisions of The Pre-judgment Interest Act, S.S. 1984-85-86, c. P-22.2. The claim is based on the allegation by the plaintiff that she loaned some $69,000 to the defendant Kelly Eiswerth on or about the 30th day of January 2001. The claim goes on to say that the defendants agreed to repay the loan in the amount of $1,500 per month, that some payments were made, but in the end, an amount of approximately $61,000 was still outstanding. The defendants deny that this transaction was loan to the individual Kelly Eiswerth, and argue that in fact it was an investment by the plaintiff and her then husband Ken Eiswerth into the auto brokering business known as Auto Brokers 1999 (“E M”), which was registered business name of the defendant company 627089 Saskatchewan Ltd. [2] summary trial was ordered in this issue on May 3, 2005. [3] The two issues in this case are as follows: 1. Was the advance made by the plaintiff loan to the defendant, Kelly Eiswerth, and/or his company 627089 Saskatchewan Ltd. carrying on business as M, or was that advance an investment by the plaintiff into that auto broker business? 2. If the advance was loan, how much is outstanding and by whom? [4] The plaintiff was married to Ken Eiswerth in 1989 and they remained married until their divorce in November 2004. Ken Eiswerth is the father of the defendant Kelly Eiswerth. [5] During the time that Ken and the plaintiff were married, the plaintiff received substantial amount of money from her father’s estate. This money was deposited into bank account in her sole name at branch of TD Canada Trust. In addition to the money from her father’s estate, the plaintiff also deposited the proceeds of the sale of the acreage that she and Ken had owned. The two of them purchased another house using some of the proceeds that flowed through her account. It appears that one of the reasons that the proceeds of the sale of the acreage were deposited into an account in her sole name was that her husband Ken was experiencing financial difficulties at the time. [6] From this account were made number of major financial transactions. These included: (a) $225,000 was deposited on or about the 8th day of September 2000; (b) $10,000 was withdrawn to pay joint debts of Ken and the plaintiff on or about September 8, 2000; (c) $175,000 was withdrawn by the plaintiff and invested in term deposit in September of 2000; (d) $38,000 was withdrawn for deposit on the new home for Ken and the plaintiff on September 26, 2000; (e) $76,000 was deposited in mid-October as the proceeds of the sale of Ken and the plaintiff’s acreage; (f) $69,550 was withdrawn as bank draft payable to Okanagan RV which was her first involvement with funds on behalf of M; (g) $69,550 was deposited into the account as payment from M; (h) $69,000 was withdrawn by cheque, which cheque was given to M; (i) number of other deposits from M, and at least one cheque payable to M, were made using this account. Various copies of bank statements with the plaintiff’s handwriting on them identified many of these transactions. [7] was business name registered by the defendant 627089 Saskatchewan Ltd. obtained licence to operate as motor dealer in November of 1999. The evidence of the plaintiff was that she helped the defendant Kelly Eiswerth obtain this registration. The copy of the licence tendered as an exhibit to the affidavit of Gail Giese shows that the registrant is in fact 627089 Saskatchewan Ltd. doing business as M. [8] The evidence at trial also was that the plaintiff and Ken Eiswerth operated another business through corporate entity. The plaintiff testified that she was familiar with the use of numbered company for the operation of business. [9] The first financial transaction between the plaintiff and was the purchase of motorhome by from an RV dealership in British Columbia. For that transaction, the plaintiff sent bank draft of $69,550 directly to Okanagan RV on behalf of M. The evidence was that shortly after that vehicle was purchased, it was sold and all of the money plus some profit or expenses were paid back to the plaintiff on or about the 30th day of January 2001. [10] The evidence of the plaintiff was that very shortly after being repaid, she wrote cheque for $69,000 to M. The cheque was not in evidence, but she stated that she wrote it to after discussion with her husband. The plaintiff also stated that the defendant Kelly Eiswerth had not requested this money and that she had decided on her own how much to advance. Her evidence was that her husband had said that they should invest some more money into Kelly’s business so that he could buy more vehicles. [11] From the time of this advance to until the commencing of this claim, various amounts were paid by to the plaintiff in denominations as little as $750 and as much as $3,000, and there were other transactions between M, the plaintiff and her husband Ken. Some of these other transactions included the repurchase by of Ken’s dump truck from the trustee in bankruptcy, and the “gift” of that dump truck to Ken, transaction where piece of equipment was bought by the plaintiff from and immediately resold at profit, and the purchase of other vehicles by the plaintiff from M. [12] The evidence was that there were no written contracts or other written evidence of any agreement between the plaintiff, the defendant Kelly Eiswerth, and/or the numbered company defendant evidencing the nature of this transaction. [13] There was no evidence of any direct payment from the plaintiff to the defendant Kelly Eiswerth. [14] The numbered company which had registered the name no longer carries on business. [15] The defendant Kelly Eiswerth is in similar business in the City of Prince Albert run by corporation called Tru-North RV, Auto Marine Sales Inc. The defendant Kelly Eiswerth is shareholder and director of this corporation. There is no evidence that this corporation is successor to the defendant numbered company by amalgamation or otherwise. ISSUE NO. Nature of the Payment by the Plaintiff [16] It is clear that the plaintiff advanced an amount of $69,000 to M. It is also clear that was registered business name of the defendant 627089 Saskatchewan Ltd. and that the plaintiff helped the numbered company register as motor dealer with Saskatchewan Justice. It is also clear that there were subsequent transactions between the plaintiff and M, payments made by and at least one transaction where the plaintiff issued further cheque of an amount in excess of $9,000 to for the purchase of another vehicle. There is the evidence of the plaintiff in cross-examination that after discussions with her husband Ken, it was felt that they should invest the $69,000 in Kelly’s business so that the business could buy more vehicles. There is evidence from the plaintiff that she felt she received profit from the first transaction. There is evidence that while in excess of $60,000 was owing by to the plaintiff, she chose to pay for another vehicle instead of deducting that amount from what was owed. There is also evidence that she categorized some of the payments from as “commission”. There is evidence that and/or Kelly benefitted the plaintiff and/or her husband by repurchasing equipment that the husband had lost to the trustee in bankruptcy and gifting it back to the husband. [17] The foregoing evidence weighs against the finding that this transaction was loan to the defendant Kelly Eiswerth. [18] In fact the only evidence that might suggest that this transaction was a loan to either of the defendants was that some of the payments made by E & M to the plaintiff were in the amount of $1,500, the amount that the plaintiff asserts was the monthly amount to be repaid by E & M for the loan. However, there was no evidence in the affidavit material of the plaintiff as to when the agreement to pay $1,500 per month was made and in her testimony, the plaintiff stated that when the decision was made to pay the $69,000 to the business, she did not have a discussion with the plaintiff Kelly Eiswerth about it. The only discussion she appears to have had was with her husband Ken, after which she wrote cheque to M. [19] On the basis of the materials filed and the evidence in the cross-examination held, find that the plaintiff has not proven that the monies advanced were loan to Kelly Eiswerth and/or the numbered company 627089 Saskatchewan Ltd. carrying on business as M. The claim on Issue No. fails. [20] As that claim fails, Issue No. becomes moot. [21] The defendant Kelly Eiswerth shall have his taxable costs on this action. J. D.B. KONKIN
The plaintiff sues the defendants for $50,000 plus interest. The claim is based on the allegation that the plaintiff loaned the defendant Kelly $69,000. The plaintiff claims the defendants agreed to repay the loan in the amount of $1,500 per month. HELD: The plaintiff's claim is dismissed. The only evidence that might suggest that this transaction was a loan to either of the defendants was that some of the payments made by the defendant to the plaintiff were in the amount of $1,500, the amount that the plaintiff asserts was the monthly amount to be repaid by the defendant for the loan. However, there was no evidence as to when the agreement to pay $1,500 was made. In her testimony, the plaintiff stated that when the decision was made to pay the $69,000 to the business, she did not have a discussion with the defendant, Kelly. The only discussion she seems to have had was with her husband after which she wrote a cheque to the defendant.