The phrase “do not mix business with pleasure” is arguably given as advice more than it is practiced. Business relationships can often involve disagreements and disputes, however, when the lines blur between individuals in a romantic manner, a variety of business-related disputes can arise, particularly when the relationship ends.

A recent decision from the Alberta Court of Justice considered a situation where two individuals who owned businesses operating within the same industry began a romantic relationship. This resulted in blurred lines when it came to whether or not the parties still expected payment from one another for services rendered. This decision illustrates how business disputes and commercial litigation can stem from personal relationships.

Plaintiff brings horses to defendant’s ranch during relationship

In the matter of Lemoine v Bevans, the parties were involved in a five-year long romantic relationship. Mr. Bevans (the “defendant” and plaintiff by counterclaim) runs a ranching operation, boards horses, and works as a skilled welder, mechanic, and farrier. Ms. Lemoine (the “plaintiff” and defendant by counterclaim) owns and lives on 55 acres where she boards horses and has some cattle. She also operates three home businesses, including a western wear and supply shop, a Puralator outlet, and a UPS outlet.

The parties began talking over the phone in late 2015 and met in February 2016, at which point they began their relationship. They both lived a similar lifestyle and were heavily involved in the rodeo scene, and would often get together when they were in attendance at the same events. Shortly after they started dating, the plaintiff brought some of her horses to the defendant’s ranch and kept them there. However, she never paid him for this service.

Parties help each other with businesses

During their five-year relationship, the parties continued to operate their own individual businesses. Although they helped each other out on occasion, they both expected to receive some payment for such assistance. For example, the plaintiff purchased a 32-foot cattle trailer which the defendant began using immediately, and continued to use, for his business, however, he only made some payments to the plaintiff for it. The plaintiff also advanced a personal loan to the defendant to help him fix a broken tractor and he had since made some repayment on. The defendant would also purchase supplies from the plaintiff’s retail business.

At the same time, they also provided services to each other for which no repayment was expected. The plaintiff indicated that she would go grocery shopping before coming to visit the defendant, and she would cook and clean while at his home. The defendant did the same when he visited the plaintiff and the parties agreed that these things were done as part of their relationship.

When the relationship ended in 2021, the plaintiff expected the defendant to repay her for both the trailer and the loan she made to him. It was at this time the defendant said that while he did owe her that money, the fees owed to him for boarding the plaintiff’s horses was greater than what he owed her. By way of counterclaim, the defendant argued that the plaintiff owed him money. He also claimed that the plaintiff owed him an additional $18,000, alleging that she broke into his place and stole various goods.

Were the horse boarding fees part of a business agreement or part of the relationship?

When the Court heard the matter, it highlighted the nature of the parties’ relationship, being that both parties were mature and had adult children. At the time of the hearing, the defendant indicated that he was turning 64 years old and it was confirmed that the parties financially assisted each other throughout their relationship. While they each maintained their own respective businesses, they partnered in rodeo activities together and when they won money they shared it.

Had the plaintiff and defendant not been in a relationship during the time the defendant boarded the plaintiff’s horses, there would be little to resolve. The main issue, the Court described, was whether the horse boarding fees fit into the category that the loans fell into (a business agreement) or if the boarding was offered to her as part of the services they exchanged during the relationship. The Court found that there was no evidence of accounting or billing for the boarding services. However, the defendant argued that the absence of these records were due to the plaintiff breaking into his home and stealing items. Either way, the parties agreed that the defendant had not claimed payment for horse boarding fees until after the relationship had ended.

Was there an oral contract between the parties?

This left the Court to determine whether an oral contract existed between the parties, specifically, one that would use the horse boarding fees to be set off against the trailer debts and the tractor loan. The Court quoted a 2018 decision from the King’s Court of Alberta, which summarized the law on oral contracts as:

11  …The relevant main principles are as follows:

Credibility: Witnesses’ credibility must be tested against those facts that are not seriously in dispute, and with the preponderance of the evidence and the probabilities surrounding the events.

Burden of Proof: The person seeking to enforce a disputed oral contract carries both the legal and evidentiary burden of proving, on a balance of probabilities, that the alleged oral contract was made.

Basic Contractual Principles Apply: There must be proof of offer, acceptance, and certainty of terms.

Consensus ad idem: Parties must agree on essential terms, and these terms must be capable of being determined with a reasonable degree of certainty.

Legal Test to Find Agreement: The Court must assess whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract. This is not about a party’s subjective intention or belief; it is an objective test.

13  In applying the objective, reasonable person test, courts will consider parties’ conduct before, during, and after a disputed agreement. Where there is disagreement on the facts of how parties’ conducted themselves “the court must decide which version of events is the most reliable,” that is, which version is “in harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable” …. This may entail a credibility assessment.

Court finds no valid contract between the parties

The plaintiff claimed she brought the horses to the defendant’s ranch on his invitation so that she would be able to ride them when she visited him. When two mares foaled in 2017, the parties raised them together. The plaintiff said she always supplied the grain needed to feed the horses, and never would have left them there if she knew she was expected to pay for doing so.

The Court found in favor of the plaintiff for various reasons and determined that, in the context of their relationship, there was no valid contract between the parties. The Court ordered the defendant to pay the plaintiff a total of $22,368.02, which represented the amount outstanding on a tractor purchase and the personal loan advanced to help fix a broken tractor.

The Court dismissed all of the defendants counterclaims in respect of boarding fees, unjust enrichment and conversion.

The Lawyers at DBH Law Provide Exceptional Advice and Trusted Representation in Commercial Litigation Disputes

The skilled commercial litigation lawyers at DBH Law have decades of experienced advising and litigating on behalf of our clients in various commercial litigation matters. We work hard to explore dispute resolution options in order to minimize risk and avoid expensive litigation. However, when a commercial dispute requires litigation, we work closely with clients to help them understand their options throughout the process and ensure they are positioned for the best possible outcome. Contact DBH Law online or by phone at 403.252.9937 to arrange an initial consultation with one of our team members.