Executive Summary: Key Legal and Evidentiary Issues

• Wells Fargo Equipment Finance Company sought possession of leased equipment and damages after 2831140 Ontario Inc. defaulted on a conditional sale agreement.
   
• The application proceeded unopposed, with no evidence filed by the corporate respondent.
   
• A perfected security interest registered under the Personal Property Security Act supported Wells Fargo's entitlement to possession.
   
• Because the equipment could not be located, its resale value remained undetermined at the time of judgment.
   
• Contractual interest of 18% applied both before and after judgment.
   
• Costs were fixed at $6,000 following a review of the bill of costs.
   

Facts of the case

Wells Fargo Equipment Finance Company leased four pieces of equipment to 2831140 Ontario Inc. ("283") under a conditional sale agreement, acting as lessor while 283 served as lessee. The equipment included a 2023 Attachment model 12PH Auger, a 2024 Bobcat Light Compaction model FP15.40, a 2024 Bobcat Mini Truck Loader model MT100, and a 2023 Bobcat Light Compaction model R69P, each identified by serial number. Wells Fargo registered its security interest in the agreement under the Personal Property Security Act on or about November 27, 2024. The agreement required 283 to make 48 monthly payments of $1,432.29 including tax, and 283 defaulted on those payments, leaving it indebted to Wells Fargo in the amount of $68,780.13, exclusive of fees and interest. Wells Fargo made demand for payment that went unanswered and was unable to locate the equipment despite its efforts. The application also named Liana Pilishvili as a respondent, but Wells Fargo did not pursue its claim against her, and the application proceeded unopposed with no evidence filed by 283.

Policy and legislative provisions at issue

The case turned on the Personal Property Security Act, R.S.O. 1990, c. P.10, under which Wells Fargo's security interest in the equipment was registered and perfected. The conditional sale agreement itself set out the terms governing default, including an 18% interest rate applicable to amounts owing. The agreement also provided that Wells Fargo could retain the equipment upon default but was required to obtain an independent appraisal and credit that appraised value against the outstanding debt.

Reasoning and analysis

Justice Callaghan found that Wells Fargo's registered and perfected security interest under the PPSA, combined with 283's default under the Sale Agreement, entitled Wells Fargo to possession of the equipment, citing Equirex Leasing Corp. v. Medcap Real Estate Holdings Inc., 2019 ONCA 152. The court also held that Wells Fargo was entitled to the shortfall between the value of the equipment and the amount still owed under the agreement. Because Wells Fargo had not been able to locate or seize the equipment, it could not yet determine that value. The court noted Wells Fargo's acknowledgment of its duty to mitigate and that it was not entitled to double recovery, referencing Keneric Tractor Sales Ltd. v. Langille et al., 1987 CanLII 29 (SCC). Should the equipment later be recovered and sold or otherwise valued, any proceeds would be credited against 283's indebtedness, and Wells Fargo was barred from recovering any amount beyond the judgment through a future sale of the equipment.

Ruling and overall outcome

Justice Callaghan granted Wells Fargo an order for possession of the equipment and confirmed its entitlement to contractual interest at 18% both before and after judgment. As of April 28, 2026, the amount owing with interest stood at $84,589.31, comprised of the $68,780.13 principal plus prejudgment interest of $15,809.18. The court fixed costs, inclusive of fees, disbursements and taxes, at $6,000, describing this as a reasonable and proportionate amount. Wells Fargo was granted leave to resubmit its draft order with an up-to-date interest calculation and costs. Wells Fargo was the successful party; no single combined total was specified in the judgment, as the debt with interest and the costs award were stated as separate figures.