Playing Poker with Your Ex: Who Gets the Antique Seth Thomas Clock?

It would give Canadians a lot more faith in the legal system, if judges were able to apply a new legal concept, the “this’ll teach the son-of-a-gun a lesson” rule. And you can bet that every week, there is at least one judge who yearns to be able to ground his decision using The Starkman Principle.

Throughout Canadian jurisdictions, subject to certain exceptions, when spouses separate the value of their assets accumulated during cohabitation is divided equally. If a wife, for example, has possessions and money worth a total of $250,000, and her husband’s accumulations are $350,000, the husband pays the wife $50,000. This is known as an equalization payment.

Sometimes, as well as determining values, judges are charged with deciding who gets what, if for example some assets are owned jointly by both parties. Of course judges can order chattels and real estate sold, and that the proceeds be divided as the court stipulates. But often a judge will be asked to determine ownership of a specific piece of property, and its fair market value for calculating the equalization payment.

In Riley v. Riley,2009 SKQB 98 (CanLII), a family law case decided last year by the Queen’s Bench for Saskatchewan, one of the more contentious matters resolved by Judge G.A. Chicoine was who would keep the antique Seth Thomas #19 Regulator Clock circa 1904, and at what value. Was it worth as low as $7,000 - $8,000, as Mrs. Riley’s antiques specialist suggested, or upwards $25,000 - $40,000 as Mr. Riley’s appraiser believed?

One would think that with such divergent opinions, Mrs. Riley would have wanted it for herself since she gave it a low value, and Mr. Riley wouldn’t have wanted it. Why? Because Mrs. Riley would only have to account for a modest value on her side of the asset ledger, and Mr. Riley, trying to have it valued at upwards of $40,000, would want his wife to be saddled with an asset valued at a great deal. For example, if $40,000 was accepted by the court, and Mrs. Riley kept the clock, she would have to give her husband a $20,000 credit.

But in this case there was a hitch. Apparently, Mr. Riley also wanted the clock. At least that’s what he told the judge. But if he wanted the clock, why would he have his expert attribute a high value to it? If he won on both counts, that is getting to keep the clock and having his value accepted, it would have cost him dearly. And that’s where poker comes into play. Mr. Riley was, in my opinion, simply toying with his wife, and also with The Court. Just perhaps - he really didn’t want the clock, at least not with a value of anywhere close to the $40,000?

Mrs. Riley’s grandfather bought the clock in a Moose Jaw jewelry store in the early 1950s. It was subsequently given to her parents. After her father died, and her mother moved to home care in 2003, it was put into storage. About a year before her mother’s death it somehow ended up in the Riley home, having been gifted to both Mr. and Mrs. Riley.

The clock was an heirloom, having been in the care of Mrs. Riley’s family for nearly 60 years. But Mr. Riley also claimed some attachment to it, since his father, a professional jeweler, refurbished it after it stopped working, and Mr. Riley himself later spent a great deal of time with the clock, adjusting the amount of mercury in the weights so it would keep proper time.

The judge decided that since it had been in Mrs. Riley’s family for three generations, and would not likely be sold by Mrs. Riley but rather passed on to one of her and Mr. Riley’s children, she should take possession of it … but compensate Mr. Riley for half its value.

Mrs. Riley’s expert, Vern Reese, had valued many clocks in his 40 years as a collector, dealer and appraiser of antiques. For many years his values had been accepted by government for the purpose of providing tax receipts for donations of antique articles. He had been qualified to give expert evidence in many divorce cases requiring antique valuations. In 2006, he appraised the clock at $7,000 - $8,000, if sold at a Saskatchewan auction, and stated that an antique dealer would only be interested if he could double his price. By the time of trial Mr. Reese acknowledged that the Seth Thomas clock might be worth $10,000.

Mr. Riley’s expert, Forster Monson, was a Certified Personal Property Appraiser, with no particular expertise in valuing clocks, but stated that for clocks he would apply the same methodology as used for other chattels … finding comparables. In 2007 he valued clock at $25,000 USD, using comparables found on the internet. However, the printout attached to his appraisal report showed that the pages were printed by Mr. Riley, suggested that Mr. Riley had done the search. Mr. Monson also relied on a conversation with a clock dealer in Saskatoon who was familiar with this particular clock. He said the dealer believed it was worth $25,000 - $40,000, and that at a reduced price he would be interested in buying it. However, it turned out that the dealer was an acquaintance of Mr. Riley.

Judge Chicoine decided that Mrs. Riley’s expert’s opinion should be given more weight than that of Mr. Riley, and that the clock should be valued in the Saskatchewan market since neither party intended to remove the clock from the province. On the basis of all the evidence, he attributed a value of $10,000, to the 100-year-old clock.

It can be argued that Mr. Riley had been expert-shopping, and took steps to influence the value that Mr. Monson attributed to the clock. And that as indicated above, he really wasn’t interested in keeping the clock … at least not at the value at which his expert pegged its worth.

Mrs. Riley got what she wanted, and at a price with which she could surely live. But within the context of an acrimonious matrimonial dispute, don’t you think she would have been more than a little content, and justice would have equally prevailed, if the judge had awarded the clock to her husband, accepting his highest value of $40,000, using The Starkman Principle? After all, what could Mr. Riley complain about? He wanted the clock, and the value for which he would have had to account to Mrs. Riley had been proposed by his very own expert. And the fate of the antique Seth Thomas clock? On balance it still would have stayed in Mrs. Riley’s family, at least for a fourth generation, being willed to one of the three Riley children by their father.

The Riley ruling has been appealed.

- Alvin Starkman, Oaxaca, Mexico

Alvin Starkman received his Masters in Social Anthropology in 1978. After teaching for a few years he attended Osgoode Hall Law School, thereafter embarking upon a successful career as a litigator until 2004. Alvin, a good-standing member of the Law Society of Upper Canada, now resides with his wife Arlene in Oaxaca, Mexico, where he writes, leads small group tours to the villages, markets, ruins and other sights, is a consultant to documentary film production companies, and operates Casa Machaya Oaxaca Bed & Breakfast.

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Downside of Keeping Antiques in Storage for Five Years, Unmonitored

Sherry Boire treasured her household contents. In fact when she began suffering from what turned out to be a long-term disability, she placed it all into storage – where it remained for five years, at a monthly cost of initially $64.20. When Ms. Boire recovered and wished to re-establish her home, she removed her chattels from storage. Most, including furniture consisting of family heirlooms and a number of antique barber chairs, had sustained significant damage as a result of moisture and mice: mold-discoloured wood, corroded metal, and furniture damaged by rodent chewing, urination and droppings.

In the 2009, Saskatchewan case of Sherry Boire v. Eagle Lake Enterprises Ltd. and Paul Florizone o/a Delta Sales, Ms. Boire sued the initial and the subsequent owner of the storage facility for her losses, over $35,000.

The Facts:

Before placing her belongings into storage, Ms. Boire met with Mr. Florizone, first owner of the facility, for a building tour and discussion. Mr. Florizone assured her that the newly-constructed building had temperature control, was air and water tight, pallets were not necessary, and that it would be like storing goods in her own home.

There was no written contract, but on the receipt Mr. Florizone wrote “all items left at owner’s risk.” Ms. Boire believed that this meant that she had to have insurance. She did, but there were exclusionary clauses relating to water and other damage, so her insurance did not cover the loss.

Mr. Florizone told Ms. Boire that to enter the building she would need to contact management, and to access her unit she would have to provide her own lock and key. Since he would not have a key to her locker, and therefore no access, she would have to look after the contents.

Mr. Florizone effectively approved of the manner in which Ms. Boire stored her goods. She even placed five pounds poisoned oats for rodent control.

When the plaintiff returned almost five years later, she encountered the damage. However none of the more than 100 other locker – renters, with virtually identical units, had a problem. The facility had been properly heated and kept clean and dry, and was secure. But the people who helped move Ms. Boire out of her unit noted a hairline crack in the floor, powdery mildew halfway up the walls and signs of rodents.

The Issues:

The court was charged with determining six issues:

• Were the plaintiff’s goods damaged while in the defendants’ building?
• If so, what caused the damage?
• Were the defendants liable in bailment, negligence, or breach of contract?
• Did “left at owner’s risk” on the receipt absolve the defendants of responsibility?
• What was the quantum of damages and how should it be apportioned?
• Did the plaintiff contribute to the loss by her own negligence or by failing to take steps to reduce the loss?

Bailment:

When someone leaves property in the possession of another, a bailment may be created. Two fundamental conditions of bailment are that ownership is not transferred, and the property is to be returned in the expected condition upon reasonable notice. If a bailment exists, who has to prove what, initially, changes. In this case we would begin with the premise that the defendants are returning the goods not as first stored, meaning they would be obliged to shift the blame to the plaintiff.

The Position of Ms. Boire:

Ms. Boire claimed that a bailment existed. In the alternative, she argued that the defendants were negligent in their care of her chattels, or they breached an implied term of the contract, that management would look after her goods. Without bailment, she would have to prove negligence or that there was an implied term of the contract (caring for her goods) that was breached. She alleged that she was blameless, having received all assurances from Mr. Florizone. Therefore his notation “left at owner’s risk” was irrelevant.

The Position of the Defendants:

Mr. Florizone and the subsequent owner of the facility, Eagle Lake Enterprises Ltd., argued that:

• No bailment existed since Ms. Boire had exclusive access to her locker and therefore the defendants did not have full possession of the contents.
• The defendants were not negligent nor did they breach the terms of the contract. They provided a secure, clear, dry storage unit, and in fact also placed antifreeze and traps to avoid rodents. There were never any other problems with damage over the entire five years, to the property of others.
• Ms. Boire must have allowed damp items into the unit, packed too tightly, or was otherwise negligent; if not entirely, then partially.
• Ms. Boire did not prove the condition of the chattels when she first stored them.
• Damage may have occurred during or after removal from storage.

The Court's Decision:

The court found that Ms. Boire’s belongings arrived at the storage unit in good condition, and that all was packed properly, with due care. That was her nature. She had a well-kept home and contents.

There was no definite answer as to how the damage occurred, but it did happen while the contents were in storage. It likely accumulated over time. The property of other tenants was not damaged because it was not stored long enough.

Because only Ms. Boire had access to her unit, the relationship was not a bailment. However, the defendants owed her a duty of care. The “left at owner’s risk” did not absolve them of responsibility, for two reasons: it was reasonable for Ms. Boire to understand that the phrase meant she was responsible for insurance, and she did have coverage, albeit insufficient; and it was clear that optimum storage conditions were critical to Ms. Boire, constituting an implied in the contract. The defendants breached it.

The defendants’ duty of care meant they were required to keep the surrounding environment safe. Ms. Boire relied on the defendants for an assurance that her goods would not be damaged by anything that could affect the safety of the unit. Mr. Florizone assured that leaving the goods in his premises would be the same as storing them in her own home. And of course in one’s well-kept home this would include ensuring a rodent-free environment and monitoring for moisture and water seepage. The defendants were negligent on both counts. Furthermore, they failed to alert Ms. Boire to the possibility of rodent and moisture problems.

But in this “dual control” storage arrangement, Ms. Boire had responsibilities since she alone had access to her unit. Mr. Florizone cautioned her that she had to look after her property. If she had stored the goods in her own home over that period of time and acted in a prudent manner, periodically she would have inspected them, or in failing health instructed someone else to do so. Inspections might have uncovered the damage in time to prevent it from progressing.

While approximately $35,000 in damage was proven, since the case was argued in small claims court the maximum recoverable was $20,000. A $20,000 judgment was entered. But Ms. Boire was found 50% negligent, so she was awarded only $10,000. The defendants were jointly and severally responsible for the other 50% of the loss.

The Moral of the Story:

As is often the case, there are lessons to be learned:

• Periodically monitor goods in storage
• Considering giving management a key, if permitted
• Consider purchasing supplementary coverage which insures against all losses
• While in this case the waiver of liability was deemed inconsequential, if you can, quality in writing whatever you agree to
• If after discussion with counsel you think you have an excellent case, ponder proceeding in a higher court.

If Ms. Boire had considered the foregoing, either she wouldn’t have had the problem, or if so perhaps she would have ended up with a $35,000 judgment, plus costs.

- Alvin Starkman, Oaxaca, Mexico

Alvin Starkman received his Masters in Social Anthropology in 1978. After teaching for a few years he attended Osgoode Hall Law School, thereafter embarking upon a successful career as a litigator until 2004. Alvin, a good-standing member of the Law Society of Upper Canada, now resides with his wife Arlene in Oaxaca, Mexico, where he writes, leads small group tours to the villages, markets, ruins and other sights, is a consultant to documentary film production companies, and operates Casa Machaya Oaxaca Bed & Breakfast.

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The Tale of the Art of Norval Morrisseau, and the Artifacts of Grand Forks

Canadian art and Canadian artifacts; their worlds are often distinct. However last year they merged in two courts, illustrating how egos, principles, and perhaps greed, can motivate individuals and groups which are purportedly acting solely in the interest of a greater public good.

The Ontario case of Mcleod (Maslak Mcleod Gallery) v. Sinclair, 2008 CanLII 67901 (ON S.C.), deals with the art of the late great prolific First Nation artist, Norval Morrisseau, and alleges “forgeries” or “counterfeits” of his work. The British Columbia proceeding, Boundary Museum Society v. City of Grand Forks, 2008 BCSC 898 (CanLII), involves a plaintiff and a defendant with the same basic interests, arguing over the protection and housing of between 12,000 and 14,000 artifacts from the communities of Grand Forks and the Kootenay Boundary Regional District.

In the Morrisseau action, four galleries and one distributor, all engaged in identifying, purchasing, holding and selling the works of Norval Morrisseau, are suing Ritchie (“Stardreamer”) Sinclair, alleging that through his website (www.Morrisseau.com) Sinclair is defaming the plaintiffs by falsely and without justification stating that works of art attributed to Morrisseau, owned or held by them, are not genuine. Sinclair responds that his motivation is to perform a public service and to assist in protecting Morrisseau’s legacy.

At an early stage in the court case the plaintiffs brought a motion requesting a temporary injunction to have Sinclair’s website shut down pending trial. The main proceeding, framed as a defamation action, seeks a permanent injunction, monetary damages and other relief.

In his decision, Justice Lederer acknowledges that it’s generally known that there is a concern that there are a number of paintings on the market which are identified as Morrisseau’s work, when they are not.

The motion was heard December 8, 2008, prior to cross-examinations on the affidavits filed by the parties. So the veracity of the allegations had not been tested, and in fact a lengthy affidavit of Sinclair, sworn January 5, 2009, had not yet been filed with the court. In that affidavit Sinclair explains in detail why he believes that many of the works offered for sale by the plaintiffs are fakes, and enumerates in detail the rationale for his belief that galleries, auction houses and ebay are offering paintings for sale that are not Morrisseau’s. He goes to great lengths to explain his expertise in terms of the Morrisseau art, based on his investigation, and importantly his lengthy master-protégé relationship with Morrisseau.

Each of the plaintiffs, the judge stated, asserts that the claims made attacking the pictures are in error and the paintings are genuine. Yet Sinclair’s website identifies works which have been offered for sale by one or more of the plaintiffs, alleged to be “fakes,” “counterfeits,” “imitations,” “stolen,” “inauthentic,” and so on. He names names, so to speak, of particular plaintiffs and specific works of art.

The judge noted that Sinclair has made it his personal concern to identify, uncover, make known and even publicize works said to be those of Morrisseau which he believes are false. The contents of the website alone clearly support the judge’s statement.

At issue is the right of freedom of expression, and the appropriateness of a court to stifle it before trial and before the allegations have been tested through cross-examination.

The judge found that: on their face, the comments and observations of Sinclair are defamatory; Sinclair had not yet had an opportunity to fully respond to the allegations that his comments are erroneous; Sinclair’s right to freedom of expression must be borne in mind; and both sides have a right to protection under the law.

Justice Lederer struck a balance, acknowledging that the website is in the public domain, and that while the proceedings are public, court records are not easily available. He ordered that the website can remain up pending further court order, provided that Sinclair place a notice on each page of the website which refers to the lack of authenticity of Morrisseau paintings, stating the court file number and the following:

“The opinions expressed on this website and on this page are those of Ritchie ‘Stardreamer’ Sinclair and of no other person. These opinions are alleged to be defamatory and are the subject of an action in the Superior Court of Ontario.”

The motion for temporary relief was adjourned to February 18, 2009, presumably so that further affidavits and transcripts of cross-examinations would be filed with the court. Counsel for the defendant has advised me that there have not yet been cross-examinations; that the motion was subsequently adjourned to March 18, 2009; and then once again without a fixed date to re-appear in court.

The plaintiffs run businesses, at least to some extent for profit, and believe that their reputations are wrongfully being besmirched. However it is reasonable to assume that part of their motivation for commencing proceedings was to maintain the integrity of the art world at large and serve the interests of collectors of Canadiana. The defendant, on the other hand, appears to be inspired by pure altruism, and concern that the public is being misled, without profit motive. It therefore seems that at least one of the parties is being driven solely by concern for the public, and the other in an indirect fashion.

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The B.C. case is much more striking in terms of both parties having a similar, if not identical public interest. Boundary Museum Society (the “Society”) was formed in 1980 to educate the people of Grand Forks and Kootenay on historical artifacts, their cultural significance, and the effect of the artifacts on the communities, through providing a museum and archives. Its bylaws provide that the Society’s members shall include The City of Grand Forks (the defendant “City”), its Mayor, its Chief Administrative Officer, a city councilor and electoral area directors for Kootenay. Despite the striking connection between the Society and Grand Forks, the Society sued the City regarding matters relating to the artifacts.

The Society operated its museum in premises owned by the City, free of rent and utilities. The premises eventually became dilapidated, and water leakage and electrical problems put the collection at risk. In 2005 the City voted to demolish the building and the following year the Society proposed that the museum be moved to the former courthouse building once renovations had been completed. The City then pursued a redevelopment plan for the town square, including a park and premises in the courthouse for the museum, and an art gallery. In 2007 the Society refused or neglected to sign a form of lease. A number of months later the City advised the Society of the town square redevelopment plans, which included demolition of the old building with anticipation of a timely and orderly move to the former courthouse. The City alleged that the Society was not cooperating. Shortly thereafter the City locked the doors to the museum.

Two weeks later the Society advised the City that the collection could not be moved until Fall, 2008. But because of the City’s contractual obligations, it became necessary to move the collection before the end of February so that demolition could proceed in an orderly fashion pursuant to the City’s plan. The City engaged two curators to supervise and record the collection, and a mover to package, label and remove it to a secure temporary location.

The Society started a court action asking for a declaration that it owns the entire collection, and not just the artifacts which had been assigned to it by donors. It brought a motion to restrain the City from selling, disposing of or dealing with the collection. Mr. Justice Brooke dismissed the motion, stating that the Society had not made out a case for irreparable harm. He found no evidence that the City had any intention of inappropriately dealing with the collection. In fact the City invited Society representatives to be present when the artifacts were to be moved.

The judge’s commentary was more important than his decision, since it brings us to the point of this article:

“I only wish to add that it is regrettable when two parties with such a large and important community of interest are unable to agree to a reasonable resolution of what seems to me to be a very narrow issue, which, given the public’s beneficial interest, may be no issue at all. The collection is being moved from a high-risk environment to a secure one, an environment which everyone agrees is a good idea. At the end of the day, does it really matter who “owns” the collection as between the City and the Society?”

In the B.C. case, the judge’s concluding remarks will probably lead to a resolution of the entire lawsuit. The public in due course will once again have an opportunity to view and learn from a segment of Canadian pre-History. In the Morrisseau case, we can only hope that a much-needed court-ordered mediation will devise a mechanism whereby all can agree to a means by which the fakes can be differentiated from the authentic works, so as to remove a dark cloud which has been haunting the mastery of Norval Morrisseau. Only then will the public interest truly be served.

- Alvin Starkman, Oaxaca, Mexico

Alvin Starkman is a member of The Law Society of Upper Canada. However, this article is not intended to be and should not be relied upon as constituting legal advice or opinion. Alvin and Arlene Starkman, former Toronto residents and collectors of Canadiana, moved to Mexico in 2004. They operate Casa Machaya Oaxaca Bed & Breakfast.

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Update: August 17, 2009

We received a comment today, purporting to provide an update as to the Ontario litigation referenced in this article. While we have no reason to deny the authenticity of this comment, we are unable to verify the authorship or the information provided therein. Accordingly, we must regretfully decline to publish it.

- Garry J. Wise

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Dealing With Antiques On Marital Breakdown

A recent decision of the Supreme Court of British Columbia confirms that trying to predict how a judge with deal with the division of antiques upon marital breakdown is futile, and that it’s best to resolve at least that one issue outside of the courtroom.

In the December, 2008, case of Lane v. Creighton, The Honourable Madam Justice Bruce was charged with deciding whether to order the antiques purchased by Melodie Lane and David Creighton during their 17 years of cohabitation, sold, or divided between them; who should pay for the storage costs incurred by Dr. Creighton after the parties’ separation; and all associated logistics. A compounding issue was that while an appraisal pegged the value of the antiques at $30,820, at one time Dr. Creighton had estimated that they were worth $200,000.

Dr. Creighton and Ms. Lane married in 1981, and separated in 1998. They had three children. The family continued to live together in the matrimonial home until late 2000, when Ms. Lane commenced court proceedings. In the course of eight years of litigation leading to the trial decision, their struggles and allegations escalated, and resulted in the court having to decide almost every issue imaginable, including: custody and access; child and spousal support; who was to blame for alienating the children from which spouse; whether Ms. Lane was mentally ill as repeatedly alleged by Dr. Creighton; and their acrimonious dispute over the sale and division of assets, including their collectibles.

Of course given this backdrop it should come as no surprise that Justice Bruce found that there was clear evidence that “there can be no trust between these individuals.” That being the case, why did she order Dr. Creighton alone to have conduct of the sale of the antiques simply because he had possession of them, and grant him authority to approve of any price offered without Ms. Lane’s consent (though she ordered him to provide an accounting)?

Dr. Creighton had retained the antiques since separation, initially in his garage. But between 2003, and the date of trial, he had been paying between $240 and $270 a month in storage fees … approximately $18,000 paid out altogether! Dr. Creighton never offered his wife the opportunity to hold onto any of the antiques. Ms. Lane never knew that her husband was incurring storage costs. But in the end Justice Bruce ordered that Ms. Lane was to be responsible for half of the costs up until the date of her judgment.

Dr. Creighton submitted that the antiques should be sold, with the proceeds divided equally after deducting his storage costs. Ms. Lane wanted everything sold, or divided equally, but stated that she should not be saddled with storage costs that she did not know were being incurred. She was agreeable to accepting half of their appraised value, somewhat surprising since her husband had at one point in time commented that they were worth more than seven times that amount.

The judge opined that it was difficult to strike a balance between on the one hand Ms. Lane’s position that she should not have to be responsible for costs she did not know were being incurred and over which she had no control, and on the other the fact that Dr. Creighton went to considerable expense storing the items and did not treat them as his own by selling or otherwise disposing of them, as often occurs in matrimonial disputes. The question as to the true value of the antiques also troubled the judge.

Justice Bruce concluded that the only fair means of allocating a value to and dividing the antiques was to have them sold. She ordered that Dr. Creighton be reimbursed for his storage costs out of the proceeds before they were divided equally. The incentive that the court gave to Dr. Creighton to sell the antiques on a timely basis, was that he alone was to bear the storage costs from the date of the judgment until their disposition. Finally, Justice Bruce ordered that in the event that Dr. Creighton was unable to sell any or all of the antiques by December 31, 2009, he and Ms. Lane were to divide them equally in specie (such as using an alternate choice mechanism), as long as Ms. Lane had paid her husband half of the storage costs incurred over the seven year period.

The decision may appear reasonable, but leaves two unanswered questions:

1) If the judge was prepared to have the parties divide up any remaining antiques, why didn’t she just order an alternate choice means of distribution in the first place, with Ms. Lane having to reimburse Dr. Creighton for half of his storage costs? A coin toss could have easily resolved the issue of who chooses first, and if there was one antique worth a great deal more than the rest, two other items could have been lumped together to reduce any financial inequity resulting from the coin toss. After all, she did order that precise resolution in the event some or all were not sold, so she must have been comfortable with how it would unfold. It would have avoided an extra step; enabled each party to retain half of the collectibles; and redressed any power imbalance resulting from Dr. Creighton having complete control.

2) Why did the Judge entrust the conduct of the sale to one party, when she knew that there was that level of mistrust and acrimony between the spouses, when should could have ordered an independent third party chosen by the spouses to conduct the sale?

The answer leads us to the lessons to be learned, and provides some insight into the role of the court in such disputes, and the discretion which a superior court judge exercises.

When rendering decisions, judges usually cite legislation and case law as precedents. They generally follow laws which reference broad yet exacting principles of financial fairness. But when it comes to asset distribution, their discretion is almost boundless as long as monetary equity prevails: division of assets vs. their sale; who gets what and by what means; the extent to which appraisal evidence will be accepted; etc. The adage “you never know what a judge will do” applies in spades to resolving disputes concerning assets.

Many family law lawyers refuse to deal with the division of household contents at the trial level, and basically insist that spouses either find a way to resolve the matter on their own, with minimal assistance of counsel, or through mediation. And many judges do not see that their role includes dealing with such minutiae. Of course there are exceptions, such as in the 2006, Saskatchewan decision in Cey v. Cey, where the judge considered who should get the antique dining room suite based upon which spouse had more of an emotional attachment to it.

If you cherish your antiques, play an active role in their division upon separation, outside of the courtroom, rather than leave the decision to a government employee. If the battle with your estranged spouse is bitter, and you hear “I don’t care, let the judge order everything sold,” remember that it might just be posturing. When a calmer moment emerges, seize the opportunity, through negotiation, to try to retain at least part of what you’ve spent years collecting.

You’ll be happier for it.

• Read the B.C. Supreme Court's complete decision here: Lane v. Creighton, 2008 BCSC 1689 (CanLII)

- Alvin Starkman, Oaxaca, Mexico

For 28 years Alvin Starkman has resented that his first wife ended up with the oak roll-top, while he got the Victorian sleigh style brass bed. Alvin is a member of The Law Society of Upper Canada. However, this article is not intended to be and should not be relied upon as constituting legal advice or opinion. Alvin and Arlene, former Toronto residents and collectors of Canadiana, moved to Mexico in 2004. They operate Casa Machaya Oaxaca Bed & Breakfast.

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Antiques and the Courts’ Use of Extraordinary Remedies

Legally speaking . . .

A frustrating aspect of the law is its occasional unfairness to those who lead their lives honestly. Consumers and business owners often lament that the unscrupulous, often with deep pockets, somehow figure out how to avoid paying the piper, despite laudable efforts of our legislators, courts and judges. But our legal system does have mechanisms to make justice prevail and catch the unsavory. And cases involving antiques illustrate how it can be done, by availing ourselves of extraordinary remedies.

Courts were originally created to provide financial compensation for perpetrated wrongs. But that didn’t always result in justice. So centuries ago in England a second level of court developed, known as the court of equity. Its job was to apply established concepts of law, but using principles of ethics and fairness, combined with good common sense and judgment … not always an easy task. In fact Charles Dickens’ Bleak House parodied the excessive time and expense associated with the Court of Chancery (the court hearing equity lawsuits) in 19th century England.

The most common extraordinary remedy, originally used in the English courts of equity, is the injunction. An injunction either requires that someone do something, or not do something. It’s customized to a specific set of facts and in general will be granted only where monetary damages are inadequate. It can be granted on a temporary basis, very quickly, and even without advance notice to the person it affects.

JUSTICE PREVAILS

The British Columbia case of Kay Minge v. J.W. Oak Furniture Imports Ltd. and William Heinhuis illustrates how this extraordinary remedy is particularly suited to claims involving antiques. Kay Minge was an antique automobile collector, residing in Norway. He agreed to purchase a 1932 Chrysler Imperial Le Baron Roadster for $124,800 (USD) from the defendants. The defendants admitted that Mr. Minge paid that amount within about ten days, but they refused to deliver the car. They said the contract was for the Le Baron and a 1976 John Deere Model 450 Tractor for an additional $50,000; that part of the sum was for the Le Baron, and part for the tractor; and that the agreement was that the vehicles wouldn’t be delivered until payment had been received in full for both. The plaintiff sued to get the Le Baron, and the defendants countersued for the balance.

On the face of that evidence, the defendants’ case seemed suspect: Mr. Heinhuis admitted that there was a deal for $124,800, and that the money had been paid … but part of that money was for the tractor sale and therefore neither vehicle had been paid for in full, all rather curious. However, there was fax and other evidence lending some credence to his position.

The proceeding was a motion brought by Mr. Minge, before trial, requesting interim delivery of the car pending trial. There was only affidavit evidence, so the Master of The Court didn’t hear oral testimony, note the demeanor of the witnesses, and examine all of the documents.

Just as with any rare antique or piece of art where ownership is in dispute, if the item remains with the vendor pending trial he can dispose of it, or it could be stolen or destroyed by fire. It wouldn’t be enough for Mr. Minge to eventually get his money back, because the vehicle was one-of-a-kind, and money wouldn’t be adequate compensation for the deal not coming to fruition.

The Master carefully considered the range of remedies available, deciding:
1) Provided the plaintiff pay into court money as security for the defendants’ counterclaim (i.e. the tractor payment), they shall release the Le Baron to Mr. Minge; should they retain the tractor they shall keep it insured; and, pending delivery of the car to Mr. Minge they shall not expose it to inclement weather and keep it insured.
2) If the plaintiff elects to not pay the additional sum of money into court as security, the defendants shall retain both vehicles, insured and protected from inclement weather.
In both instances, the interim order provided for inspection by the other side and proof of insurance coverage.

Mr. Minge gets his vintage vehicle, at his option either in his possession immediately or protected for him pending trial, and the defendants’ rights are preserved should they wish to pursue their counterclaim for sale of the tractor. In addition, the order could be registered with provincial government ministries, to prevent the defendants from mortgaging or disposing of the Le Baron before trial.

AND CATCHES THE UNSAVORY

Earlier this year a lawsuit was brought before the Ontario Superior Court involving a collection of 14 classic cars valued at $350,000 (CDN), in more dire circumstances. The saga began with a franchise known as O.K. Tire Stores suing former licensee James McLaughlin Jr. and his corporation, Ace Tire. In May, 2007, O.K. Tire obtained a temporary injunction restraining the defendants from using the plaintiff’s trade marks and trade name. In September, a judgment made the injunction permanent and ordered McLaughlin and his company to pay damages for an outstanding debt, passing off, and costs, totaling $199,830.25.

In February of this year, O.K. Tire commenced a second proceeding, O.K. Tire Stores Inc. v. McLaughlin, suing McLaughlin, Ace Tire, and four members of the McLaughlin family. Of the total owing, O.K. Tire had only recovered $1,674.71, through garnishment.

In the new proceeding, the plaintiff alleged that in 2004, McLaughlin submitted a credit application, representing that he owned the home in which he resided, the classic car collection, and more, and that his net worth was $641,700. After obtaining the judgment, O.K. Tire learned, amongst other things, that the home had been transferred into the name of Charlotte Murphy McLaughlin and James McLaughlin Sr. and that 9 motor vehicles had been transferred to McLaughlin’s wife, Debra. In addition, while McLaughlin had stated that he had “walked away” from the Ace Tire business, the plaintiff learned that the Ace Tire business location was being operated by McLaughlin’s brother, Martin.

O.K. Tire asked a judge, without giving notice to the defendants, to require that the McLaughlins preserve their assets and allow the plaintiff to put liens (certificates of pending litigation) on real estate, including the home. The basic allegation was that McLaughlin and his family had wrongfully taken steps including transferring property, with the intention of avoiding paying O.K. Tire. A concern was that the if the defendants knew that O.K. Tire was going to ask the court for such an order, it would give them time to dispose of everything, before a court order was made.

The judge’s order, made February 14, 2008, without the defendants knowing that the plaintiff had even started the new proceeding, included these terms, pending further court order:
1) The defendants or anyone acting on their behalf are restrained from directly or directly taking any steps to sell, transfer or otherwise deal with the vehicles and shall preserve and maintain insurance on them;
2) The defendants are to within ten days provide the plaintiff with a sworn statement stating the location of the vehicles, and by not doing so they will be in contempt of court and may be liable to be imprisoned or fined;
3) The plaintiff is granted permission to but a lien on the two pieces of real estate in issue in the case, including the home;
4) Any interested party can apply to amend the order;
5) The plaintiff is required to serve the order and the court proceeding (claim) as soon as possible.

Two points are noteworthy: Firstly, none of these allegations (which do not constitute all those which were made) have been proven to be true at a trial, and in fact they represent only a summary of the plaintiff’s version of the facts. Secondly, as of June, 2008, according to the lawyer representing the plaintiff, the plaintiff and the defendants were is settlement negotiations, and no further court order had been made.

The plaintiff didn’t want Mr. Mclaughlin’s antique cars or his home. All he wanted was that the debt ordered by the court to be paid, be satisfied. On the face of the allegations it appeared that McLaughlin, with the help of his family, was trying to arranged his affairs to avoid paying the debt, if not fraudulently then certainly by taking illegal steps. You can sell or dispose of property, as long as your motivation is not to defeat another’s claim.

SUMMARY

An injunction is an extraordinary remedy available to Canadian courts today, historically rooted in the British court of equity, designed to meet specific, often urgent, fact situations. It can be used to protect the rights of an antique collector, to ultimately acquire a unique piece, where money would be inadequate compensation. It can be granted on a temporary basis, fast and without notice to the people it affects, where there’s a danger of irreparable harm to the innocent. Even when the gate has been closed after the horse has left the barn, justice can still prevail.

- Alvin Starkman M.A., LL.B., Oaxaca

Alvin Starkman is a member of The Law Society of Upper Canada. However, this article is not intended to be and should not be relied upon as constituting legal advice or opinion. Alvin and Arlene, former Toronto residents and collectors of Canadiana, moved to Mexico in 2004. They operate Casa Machaya Oaxaca Bed & Breakfast - http://www.oaxacadream.com

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