Executive Summary: Key Legal and Evidentiary Issues

• AY Construction Ltd. sought a replevin order for equipment allegedly sold without authority by Danelle Yager to Chris Williams during marital separation proceedings.

• Ownership of a Bobcat T590, steel I-beams, and a cutting torch was disputed, with the plaintiff asserting corporate ownership and Ms. Yager claiming it was personal or family property.

• Documentary evidence including bills of sale, financial statements, and employee affidavits supported AY Construction Ltd.'s prima facie proprietary interest in the equipment.

• The nemo dat quod non habet principle under s. 26(1) of the Sale of Goods Act was central, as Ms. Yager lacked title to transfer the equipment she sold for $10,500.

• Mr. Williams' defences of estoppel and good faith purchase under s. 28 of the Sale of Goods Act were rejected because the seller had no title rather than a voidable title.

• Balance of convenience favoured AY Construction Ltd., which demonstrated financial inability to replace the Bobcat and operational need for the equipment in its ongoing business.

Background and the parties involved

Aaron Yager Construction Ltd. ("AY Construction Ltd.") is a construction company incorporated on October 31, 2016, with Aaron Yager as its sole shareholder. Prior to incorporation, Mr. Yager operated his construction business as a sole proprietorship known as Aaron Yager Construction. The company conducts its operations from shop spaces on a property on West Saanich Road in Victoria, British Columbia, as well as an office in Sidney. The West Saanich Road property is a large rural area containing two residences, including the former family home of Aaron and Danelle Yager, a residential yard fenced for children and dogs, and a separate shop and construction yard accessed by company staff via a roadway distinct from the residential entrance.

The marriage, separation, and the sale of equipment

Aaron and Danelle Yager were married in August 2017 and separated on March 13, 2025. Following the separation, Mr. Yager was prevented from attending the property from a point in March 2025 until at least May 2025, due to release conditions reached between him and Saanich Police. During this period of absence, around April 30, 2025, Ms. Yager sold certain equipment to the defendant Chris Williams for a $10,500 payment. The equipment comprised a Bobcat T590 compact track loader (serial number ALJU19793), two steel I-beams, and an oxy-acetylene cutting torch and tank set. Mr. Williams admitted he was in possession of the equipment and indicated that the Bobcat was being used in his business on the mainland.

The equipment's purchase history and corporate ownership claim

The Bobcat was originally ordered on March 8, 2016 by the sole proprietorship from Westerra Equipment Ltd. at a price of $73,500. The purchase was financed through a lease agreement with Wells Fargo Equipment Finance Co. over a 60-month term, with an option to purchase the Bobcat for $1.00 after the term concluded on March 9, 2021. Until that time, title would remain with Westerra. The sole proprietorship made all required payments under the lease agreement except the $1.00 option payment. By the time those payments were completed, the sole proprietorship had become the incorporated entity, AY Construction Ltd. The company then proceeded on the understanding that it owned the Bobcat, and this understanding was never, on the materials before the court, challenged by Westerra. This understanding is reflected in AY Construction Ltd.'s financial statements, including the Notes to Financial Statement dated December 31, 2016, where the Bobcat is listed among its capital assets, and the 2017 Financial Statements of AY Construction Ltd., prepared by Lee and Sharpe Chartered Professional Accountants in December 2018, which show asset values that incorporate the Bobcat's value. AY Construction Ltd.'s proprietary interest in the Bobcat was further corroborated by employee affidavits from James Agate, a 20-year employee of the sole proprietorship and later AY Construction Ltd., and David Laboissiere, both of whom confirmed the Bobcat was used routinely for company jobs, including snow clearing, and was stored in the construction yard with other company vehicles.

The preservation order and competing ownership assertions

On May 7, 2025, Associate Judge Scarth issued a preservation order in the parallel Family Law Action between the Yagers (Victoria Registry File No. 25-10544). This order prohibited Ms. Yager from disposing of, transferring, converting, or exchanging into another form, property at issue in the Family Law Action, including but not limited to "all equipment and tools owned by" AY Construction Ltd. The order further required Ms. Yager to deliver and return all equipment and tools owned by AY Construction Ltd. that had been removed by Ms. Yager or third parties to the property. Despite this order, Ms. Yager maintained that the equipment did not fall under it because it had always been Mr. Yager's personal property—and therefore family property—rather than owned by AY Construction Ltd. Her evidence regarding the Bobcat was not corroborated by other affidavit evidence, and the photographic evidence she provided did not definitively establish a possessory interest or ownership in the Bobcat. While Mr. Williams described being told by a salesperson from a second-hand store named Kyle Martin that the Bobcat had been given to Ms. Yager by Mr. Yager, no affidavit evidence from Mr. Martin was filed on the application.

The legal framework for replevin

The court considered the application under R. 10-1(4) of the Supreme Court Civil Rules, B.C. Reg 168/2009, applying the common law remedy of replevin—an extraordinary interim remedy of returning disputed property to a party pending trial. As outlined in Cascade Aerospace Inc. v. Viking Air Limited, 2025 BCCA 2, the test requires the applicant to demonstrate a better prima facie right to possession, after which the court determines what, if any, terms and conditions, including security, should be included in the replevin order to ensure a fair litigation process. Irreparable harm is not required for a party to obtain interim possession of specific property, nor is it a precondition that the applicant lead evidence of a risk of disposition by the party in possession. The court also applied the nemo dat quod non habet principle, codified in s. 26(1) of the Sale of Goods Act, R.S.B.C. 1996, c. 410, which provides that a buyer acquires no better title to the goods than the seller had, unless the owner's conduct precludes the owner from denying the seller's authority to sell.

The court's assessment of Mr. Williams' defences

Mr. Williams raised defences of estoppel and s. 28 of the Sale of Goods Act. Section 28 provides that when a seller of goods has a voidable title to them, but the seller's title has not been avoided at the time of sale, the buyer acquires a good title to the goods if they are bought in good faith and without notice of the seller's defect of title. However, the court found this provision inapplicable because, on a prima facie basis, Ms. Yager did not have a voidable title—she did not have a title to sell and sold the equipment without authority or consent of the owner. Regarding estoppel, the court held that something more than mere possession of goods is needed to rely on estoppel; the seller must be armed with some indicia which make it appear that the seller had the right to sell. Here, the indicia were weak, as there was an absence of direct evidence from Mr. Martin about what happened, or from anyone else who could corroborate Ms. Yager's assertion that the equipment was personally owned rather than owned by AY Construction Ltd. Merely handing over the equipment does not create an estoppel. The court also emphasized that AY Construction Ltd. has a distinct legal capacity from Mr. Yager, and the fact that Mr. and Mrs. Yager have separated does not change the possessory interest of AY Construction Ltd. The court accepted that the spouse of a shareholder does not have a possessory interest in assets of the corporation. Ms. Yager's interest would be, subject to any exclusions, in Mr. Yager's shares in AY Construction Ltd. as family property subject to division under s. 84(2)(a) of the Family Law Act, S.B.C. 2011, c. 25.

Ruling and outcome

Justice J. K. Gibson of the Supreme Court of British Columbia found that AY Construction Ltd. established a strong prima facie claim to a proprietary interest in all three items of equipment and that the balance of convenience favoured granting the replevin order. The court noted AY Construction Ltd.'s present financial circumstances rendering it unable to purchase another Bobcat, its operational need for the equipment—including loading and unloading job site trailers and snow removal—and the fact that the company had relied upon the Bobcat for longer than Mr. Williams had had access to it. Mr. Williams had also claimed to have repaired the Bobcat after a fuel tank leak, but did not attach any documentation proving the cost of repair or clean up, and the court found he did not provide sufficient evidence proving an improvement in the Bobcat's value. The Honourable Justice Gibson ordered Mr. Williams to return the equipment to AY Construction Ltd. at 5841 West Saanich Road within 10 days of the date of the reasons, or such other timeframe as agreed between the parties, pending the outcome of the Conversion/Detinue Action set for trial in March 2026. No order for security was made, as the court found it unnecessary to do so. Costs of the application were ordered to be in the cause. No specific monetary award was determined, as this was an interim replevin order; the underlying questions of conversion and detinue liability remain to be resolved at trial.