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Court of Appeal Weighs in on a Driving Range Operator’s Damages for Unlawful Distraint and Conversion of Assets

2105582 Ontario Ltd v. 375445 Ontario Limited 2017 Ont CA

Landlord terminated the lease and then retained the tenant’s trade fixtures on grounds that they became affixed to the land and were therefore the property of the landlord. The court held the landlord liable for conversion of the tenant’s property. A landlord cannot distrain anything other than chattels and the tenant’s trade fixtures were not chattels. Further, a landlord cannot distrain after terminating a lease. Damages for conversion were set at the fair market value of the chattels at the date they were taken. Had the defendant sued in a quaint tort known as detinue, the damages would have been the value of the assets at the date of trial plus the equivalent of the rental of the assets during the detention. The tenant was only entitled to these compensatory damages. It could not show that it should be allowed punitive damages because the landlord truly was of the opinion that the property was that of the landlord. It could not receive damages by which the landlord disgorged its profits from the use of the chattels because, with damages for conversion, it was deemed to have sold the chattels at the time of the conversion.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.