|I R L Idealease Ltd. v. Pan West Distributors, seeks an order that the defendant, Pan West Distributors, a division of Pan West Contracting Ltd. (“Pan West”) purchase all of the trucks leased|
I R L Idealease Ltd.
Pan West Distributors, a division of Pan West Contracting Ltd. and the said Pan West Contracting Ltd., and Larry Penner
Before: The Honourable Madam Justice Hyslop
Reasons for Judgment
 The plaintiff, I R L Idealease Ltd. (“IRL”) seeks an order that the defendant, Pan West Distributors, a division of Pan West Contracting Ltd. (“Pan West”) purchase all of the trucks leased to Pan West for an amount to be determined. The other matters sought in the notice of motion and the claims against Larry Penner did not proceed at this hearing.
 This is a summary trial pursuant to Rule 18A of the Rules of Court (the “Rules”). IRL states that this matter can be heard pursuant to Rule 18A. Pan West states that it can be heard pursuant to 18A so long as it proceeds on the basis of the lease between IRL and Pan West.
 There are some affidavits that are in conflict with each other. However, the conflicting evidence can be resolved.
 There are other claims made by IRL against Pan West. Recently, Pan West received document disclosure. Examinations for discovery have not been conducted.
 IRL is in the business of leasing trucks. Pan West is in the hauling business using trucks.
 IRL and Pan West entered into a lease dated January 24, 2006 (the “lease”), known in the industry as a “wet lease”. Under this wet lease, IRL supplies a tractor unit (“truck”) and provides repairs and maintenance. At the end of the lease, the truck is returned to IRL. Pan West leased from IRL six trucks pursuant to the lease.
 Pan West did not lease each truck on January 24, 2006. The first truck was leased and delivered on January 24, 2006. After that, Pan West received delivery of five difference trucks on different dates, all under the terms of the lease.
 As each truck was delivered, Schedule A, consisting of two pages, was attached to the lease for each truck. The first page of Schedule A for each truck describes the vehicle number, the date of delivery, the length of the lease, make and model, serial number, manufacturer’s recommended “Max G.V.W. or G.C.W.”, licensed weight, its original value, the monthly depreciation credits, the monthly lease amount and the charge per kilometre upon certain events occurring. The six trucks are all Internationals. The second page of Schedule A refers to the responsibility for certain matters for each of IRL and Pan West.
 Each truck is leased for a period of 48 months. As a result of the different delivery dates, the lease period for each truck expires on different dates. The terms relating to lease payments, value and depreciation differ for each truck. IRL and Pan West have a different number for each truck. The numbers are as follows:
 At the end of the lease, IRL sells the truck to a third party. IRL is familiar with the history of the truck as their associated company, IRL International Truck Centers Ltd. (the “Truck Center”), provides repairs and maintenance for each of these trucks.
 The engines for each truck are under warranty by Cummins, their manufacturer. The warranty “begins with the sale of the engine by Cummins and ends two years or 250,000 miles (402,336 kilometres) or 6,250 hours of operation, whichever occurs first, after the date of delivery of the Engine to the first user.” As of April of 2009, the engines were no longer under warranty.
 The relevant sections of the lease on which both IRL and Pan West rely are as follows:
5C. Authorized Repairs. All repairs, alterations and adjustments to Vehicles will be made by Lessor or parties authorized by Lessor. When repairs are necessary, Customer will notify Lessor Immediately. Lessor will not be responsible for the costs of repairs or services not expressly authorized by Lessor. Customer must submit acceptable vouchers for all authorized repairs and services.
5G. Condition on Return. Customer shall promptly return all Vehicles, along with original and added equipment and accessories, to Lessor at Lessor's facility upon the expiration or cancellation of this Agreement. All returned Vehicles shall have clean interior and shall be without cracked or broken glass, sheet metal or body damage, or cut or torn upholstery. Upon failure of Customer to return Vehicles in such condition, Customer shall be charged, pursuant to Section 7.D, for the cost incurred by Lessor to restore the Vehicle to such condition.
5K. Alteration of Vehicles. Customer agrees to pay for any structural alterations, special equipment, or material alteration in painting, lettering or art work required by Customer. Customer may not alter a Vehicle without Lessor's prior written consent.
7C. Cost of Certain Repairs and Services. Customer agrees to pay (at Lessor's standard rates) the cost of any repairs or other services necessitated by: (1) accident; (2) operation of a Vehicle in violation of Sections 5.A or 5.B; (3) unauthorized alteration or repair of a Vehicle; (4) tire, glass or body damage as indicated in Section 5.E; (5) the use of a trailer or other equipment not included on Schedule A or not maintained by Lessor under a separate agreement; (6) violation of any other provision of this Agreement.
7D. Additional Charges. Customer agrees to pay for: (1) any sales, use, gross receipts, value added, or similar tax now or hereafter imposed upon the use of Vehicles or on the rental or other charges accruing hereunder; (2) any increase in license or registration fees, Federal Heavy Vehicle Use Tax, vehicle inspection fees, fuel tax permits and personal property or ad valorem tax; (3) any new or additional tax or governmental fees adopted after the date of execution of the applicable Schedule A; and (4) any increase in insurance fees or premiums instituted after the execution of the applicable Schedule A; (5) any cleaning and maintenance charges incurred pursuant to Section 5.F; (6) any cost incurred by Lessor to restore returned Vehicles to the condition indicated in Section 5.G; and (7) any cost (including installation and maintenance) of any equipment indicated in Section 5.1. Charges for subsections 5, 6, and 7 of this Section will be calculated at Lessor's standard rates.
11C. Elective Termination. If Customer fails to cure a Default within seven (7) days after written notice has been mailed to Customer, Lessor may elect upon not less than seven (7) days written notice to Customer, to terminate this Lease with respect to any or all Vehicles. Upon such termination, Lessor may at its option demand that Customer purchase within ten (10) days all or any of said Vehicles in accordance with Section 11.F, without prejudice to other remedies Lessor may have under this Agreement or at law.
11F. Purchase of Vehicles. In the event Customer, pursuant to this Article 11, shall be required, or shall have the option to, purchase any of the Vehicles, Customer shall purchase said Vehicles at or within the time aforesaid for an amount, payable in cash, equal to the Original Value of each Vehicle, as shown on the applicable Schedule A, less the sum of the applicable Depreciation Credits, as shown on the Schedule A, earned during the term of this Agreement (the "Depreciated Value"), plus the Prepayment Adjustment. For purposes of this Section 11.F, Prepayment Adjustment means, in respect of the Vehicle being purchased, an amount equal to (1) three times monthly Fixed Lease Charge referred to in Schedule A for the purchased vehicle where, at the time or purchase, there are more than twenty-four months remaining on the Lease Term on the applicable Schedule A, in respect of such purchased vehicle, (2) two times monthly Fixed Lease Charge where, at the time of purchase, there are more than twelve and up to twenty-four months remaining on the Lease Term, and (3) one month's Fixed Lease Charge where, at the time of purchase, there are twelve or fewer months remaining on the Lease Term. For purposes of calculating the Prepayment Adjustment under this Section 11.F, the Fixed Lease Charge shall in each case be calculated on a monthly basis even if the Fixed Lease Charge for the purchased Vehicle is indicated on Schedule A to be calculated and payable on a weekly basis. Additionally, at the time of purchase, Customer must pay Lessor any unpaid charges accrued pursuant to this Agreement, and any unexpired licenses, taxes and other expenses previously paid by Lessor for the Vehicles, including personal property taxes and any sales, value added, goods and services, excise or use tax arising from the purchase. Customer shall have no right to purchase any Vehicle as to which the Lease Term on the applicable Schedule A has expired.
BACKGROUND FACTS WHICH LEAD TO THIS DISPUTE
 In about March of 2009, IRL became aware that Pan West had installed a modification to the engine on unit 0614 without its authorization. The modification is called a fuel box. In a letter dated March 23, 2009, IRL notified Pan West of their knowledge of this modification, enclosing photographs. IRL stated in their letter that this modification would void the warranty, reminding Pan West that if the warranty was denied, the cost would be paid by Pan West. IRL asks Pan West that upon removal of the fuel box to bring in unit 0614 for inspection. This letter was not received by Pan West until April 17, 2009.
 In a letter dated April 9, 2009, addressed to Pan West, IRL informed Pan West that they have discovered that unit 0612 also has a fuel box installed in it. IRL informed Pan West that they are in breach of the lease. In that letter IRL writes:
Further to our letter dated March 23, 2009 regarding the installation of a fuel box to Unit 0614, we have been advised that Unit 0612 also has a fuel box installed. On this Unit, a line was plumbed into the intake system piping going into a tool box on the passenger side of the vehicle. The line has a "tee" which was covered with a rubber cap. Unfortunately the rubber cap broke allowing the engine to ingest unclean air.
By installing these unauthorized attachments to our trucks you have jeopardize the performance of the engines and invalidated any warranty. You are in breach of the lease agreement. As a result, we will allow either of the following two options:
1. Continue the lease with the following conditions:
a. All leased trucks are to be inspected at our facilities before close of business on April 24, 2009. The cost of these inspections will be the responsibility of Pan West Distributors a Division of Pan West Contracting Ltd.
b. All unauthorized attachments will be removed at the expense of Pan West Distributors a Division of Pan West Contracting Ltd.
c. All prior servicing agreements between IRL Idealease Ltd. and Pan West Distributors a Division of Pan West Contracting Ltd. are null and void.
d. No further servicing or repairs are to be done at your facilities by your personnel without the prior written permission of IRL Idealease Ltd.
e. The cost on any engine failures or rejected warranty claims on any of these leased units will be the responsibility of Pan West Distributors a Division of Pan West Contracting Ltd.
2. Pan West Distributors a Division of Pan West Contracting Ltd. can terminate all leases and purchase the units in accordance with Section 11F of the Vehicle Lease and Service Agreement.
Please advise your intentions in writing by April 17, 2009.
 On April 17, 2009, Mr. Penner, the president and principal of Pan West and Mr. Barley, general manager of IRL met. Mr. Barley summarized this meeting in a memorandum dated April 21, 2009, which he signed and Mr. Penner did not. Mr. Penner agrees with its contents except he states that he did not breach the lease and he would “pay for any repairs that can be proved were caused as a result of my actions.”
 Pan West acknowledges that they put in a hydrogen pumping fuel line system in truck number 0612 and it had been removed prior to receipt of the April 9, 2009 letter. It further acknowledged that truck 0614’s fuel box was removed and that unit 0713 had its air intake drilled in preparation for the installation of the hydrogen pumping system. This system was never installed. The hole in the air intake was plugged. This is clearly shown in the pictures attached to the affidavit of Mr. Barley. As directed by IRL in their letter of April 9, 2009, all six trucks were inspected at the Truck Center and at Pan West’s cost. The inspection of these trucks occurred between April 17, 2009 and April 30, 2009. At the time of the inspection none of the fuel boxes were on the trucks. The following are excerpts from the invoices from the Truck Center for each of the trucks inspected:
 In a letter dated April 29, 2009 to IRL, Pan West confirms that all the trucks were inspected and that Pan West would continue to lease the trucks “to their completion per the conditions outlined on ;your letter of April 9, 2009 letter with the exception of Item E – Option 1.”
 In the letter dated May 7, 2009, addressed to IRL, Pan West’s counsel stated:
My client maintains the position that your attempted termination of the two leases [of 0612 and 0614] described above is of no effect. It will continue to honour its obligations under these leases, which includes the obligation to make monthly payments. It expects you to honour your obligations.
 IRL sent Pan West invoices dated May 8, 2009, for the purchase of trucks 0612 and 0614.
 IRL has continued to take the monthly lease payments from Pan West’s bank account in accordance with a pre-authorized system. Pan West continues to take trucks to the Truck Center for repairs and service.
 The lease payments for truck number 0612 are paid in full and in January 2010, the truck, pursuant to the terms of the lease will be returned to IRL.
 IRL alleges that in July of 2009 it learned that Pan West welded a steel beam across the rear of truck units 0612, 0614, 0704 and 0706 without its authorization.
 IRL, in a letter dated July 29, 2009, directed Pan West to remove welded steel pieces across the frame of trucks 0612, 0614, 0704 and 0706 as they were in contravention of Section 5K of the lease. In that letter, IRL reminded Pan West that pursuant to Section 11C of the lease, that if the defect was not cured within seven days of receipt of the notice, that IRL may elect to terminate the lease with respect to any and all the trucks.
 In a letter written by Pan West dated August 5, 2009 and directed to IRL, Pan West stated that the steel plates (beams) on the trucks had been removed.
 On August 7, 2009, IRL’s lawyers wrote a letter to Pan West’s lawyers. That letter stated that Pan West had not removed some of the unauthorized alteration to the trucks that Pan West leased from IRL. Further, the letter states that Pan West failed to provide evidence that the alterations have been removed and the trucks returned to their original condition. In that letter, IRL demands, pursuant to Section 11C of the lease, that Pan West purchase all of the trucks within ten days. The buyout figure for each truck is listed in the letter. Pan West is reminded that these figures do not include taxes or mileage payments for each truck pursuant to Schedule A of the lease. In that letter IRL states that it:
...reserves all of its other available remedies under the Agreement, including the right to repossess the vehicles in accordance to Article 11E of the Agreement.
The agreement is the lease.
 IRL’s position is that as Pan West breached the terms of the lease, it is obliged to purchase outright all of the trucks.
 Pan West argues that IRL gave notice to Pan West to remove the fuel systems. This, Pan West argues, was done and to the satisfaction of IRL.
 Pan West argues that the notice given to them to remove the fuel boxes are outside the terms of the lease, as are the conditions IRL purports to impose.
 Pan West accepts that it is obligated pursuant to Sections 5G and 7C of the lease, to pay the cost of repairs for unauthorized alterations.
 Pan West argues that the rules of contra proferentem and generalia specialibus non derogant (general words do not derogate from special – Black’s Law Dictionary,6th Ed.).
 Pan West argues that in order for there to be a breach, the breach must be a material term of the lease. Pan West states that the installation of a fuel saver and the installation of steel beams are not material breaches.
 Pan West did not demonstrate how contra proferentem comes into play in construing this lease.
FUEL CONTROL BOXES
 Pan West was in contravention of the lease when it installed unauthorized engine modifications being the fuel boxes to trucks numbered 0612 and 0614, as well as being in contravention of the lease in drilling a hole to truck 0713’s air intake in order to facilitate the hydrogen pumping fuel box system which was never installed. Pan West did not seek consent in writing from IRL to install the fuel boxes pursuant to the terms of the lease. Pan West was also in contravention of its lease with IRL by installing steel beams on trucks 0612, 0614, 0704 and 0706 without obtaining written authorization from IRL. However, IRL were aware that these steel beams had been welded on to the back of the frames of these vehicles since their installation.
 IRL acknowledges that the installation of the steel beams is not their biggest concern.
 The first notice that Pan West received from IRL was the letter dated April 9, 2009. In that letter, IRL states that they were aware of the installation of the fuel boxes on trucks 0612 and 0614 and demanded that they be removed as they were in breach of the lease.
 In the letter of April 9, 2009, IRL states that they will allow either of the following two options: Option one permits Pan West to continue with the lease so long as:
a. all the lease trucks are inspected at Pan West’s costs by close of business on April 24, 2009.
b. permits all unauthorized attachments will be removed.
c. all service agreements between IRL and Pan West are null and void.
d. Pan West is to do no further servicing or repairs at Pan West facilities without prior written permission from IRL.
e. the cost of any engine failures or rejected warranty claims on any of these leased units will be the responsibility of Pan West.
 The second option put to Pan West, was that it could terminate the leases and purchase all of the units in accordance with Section 11F of the lease.
 On April 17, 2009, Mr. Barley and Mr. Penner met to resolve the matters raised in the letter of April 9, 2009. Mr. Penner, as stated earlier in these reasons, agreed to some of the terms, one of which was that Pan West would pay for repairs that could be proved were caused as a result of Pan West’s action.
 The letter of April 9, 2009, does not state that it is pursuant to Section 11C and D of the lease. Some of the conditions set out in paragraph 1 of the letter of April 9, 2009 are outside the terms of the lease.
 Option 2 of the letter of April 9, 2009 which is the second choice offered to Pan West states that Pan West can terminate the lease and purchase the vehicles. There are no terms in the lease permitting Pan West to terminate the lease, except on the anniversary date of the delivery of each truck; Section 11A – the early termination option. For this clause to come into effect, terminate the lease and purchase the trucks, there are to be no existing defaults and there is no obligation on Pan West to do so.
 The purported agreements in the memorandum of April 17, 2009 were also outside the lease. However, whether it is within the terms of the lease or not, Pan West corrected the defaults by removing the fuel control boxes. Inspections were conducted on each truck as directed by IRL. As a result of those inspections, IRL was satisfied that the unauthorized alterations or additions had been removed to the satisfaction of IRL.
 The letter of April 9, 2009 and the meeting attended by Mr. Barley and Mr. Penner on April 17, 2009 were not intended to remedy defaults under the lease or to terminate the lease. Rather, it was two businesses resolving a problem that had arisen as a result of the actions of Pan West.
 Pan West in 2006 and 2007, upon delivery of each truck, welded a steel beam at the end of the truck’s frame where the frame slopes down. The purpose of the installation of these beams was to prevent the trailers from binding with the truck frames causing damage.
 In a letter dated July 29, 2009, IRL gave Pan West notice that the welding of the steel beams on trucks 0612, 0614, 0704 and 0706 were in contravention of Section 5K of the lease as Pan West had not obtained written authorization from IRL to install these beams.
 IRL demanded that the steel beams be removed and that the trucks be returned to their original condition and all damages repaired. In that notice, IRL recites portions of Section 11C of the lease.
 In order for IRL to demand that Pan West purchase the trucks the following must occur:
1. There must be a default pursuant to the lease. The default must be identified. In this case, it was the welding of steel beams on four of the trucks which were not authorized in writing;
2. IRL may elect to give notice to Pan West to cure the default; that is to remove the welded beams within seven days of receipt of the notice;
3. If Pan West does not remove the welded beams within the time period, IRL may terminate the lease with Pan West;
4. At IRL’s option, IRL may insist that Pan West purchase all of the trucks within ten days of its demand.
Invoking all of the terms in Section 11C requires three different written notices from IRL.
 IRL is not obliged if the defaults are not cured, to terminate the lease or to insist on the purchase of the trucks by Pan West. In summary, if the defects are cured, the lease cannot be terminated, nor can IRL insist on the purchase of the trucks.
 The notice of July 29, 2009 raises the issue as to whether there was a default under the lease by Pan West welding the steel beams on the four trucks.
 Mr. Hicks, the service manager for the Truck Center, designated by IRL, as the service center for the trucks leased to Pan West, stated in his affidavit that at no time did he authorize placing steel beams on the trucks.
 Mr. Penner contradicts this. He states that Mr. Hicks gave his verbal approval and told Mr. Penner that he thought it was a good idea. All of these trucks were at the Truck Center for routine repairs and maintenance. In addition, these trucks are required by law to be inspected on a semi-annual basis. The Truck Center is an authorized government inspection facility for commercial motor vehicle inspections. No complaint was ever made by IRL or the Truck Center until IRL’s letter of July 29, 2009.
 Despite this verbal approval given by Mr. Hicks, Pan West removed the steel beams on all four trucks. Pan West did so by cutting out beams which left a cut out on the truck’s frame. This particular area is at the back of the truck. This, Mr. Hicks swears “is extremely dangerous as it compromises the structural integrity of the frame”. Pan West cut out the beams and repaired the notch where the beam was cut out. The truck which was photographed by IRL and presented as evidence is truck 0706. Mr. Penner explains that an employee of Pan West ran short of time welding in the missing steel. However it is now completed. Mr. Penner swears that none of the units had notches in their frames after August 5, 2009.
 Keith Pryce of Overdrive Collision Center Ltd. (“Overdrive”) operates a collision repair shop that specializes in heavy duty equipment. Overdrive is one of the few businesses in the interior of British Columbia that performs frame repairs and alignment. Mr. Pryce has been in the business for 34 years. Mr. Pryce recalls being asked by Mr. Hicks in the summer of 2009 to attend the Truck Center in Kamloops to view a particular truck. That truck had Pan West on the door. Mr. Hicks, sought on behalf of IRL, an opinion concerning “a plate that had been welded between the frame rails of this truck”. Mr. Pryce was unaware that there was any litigation or contemplated litigation regarding the truck. Mr. Pryce states that at the time he viewed the truck he did not know what truck he was viewing. Mr. Pryce swears to the following:
4. I have recently been provided with photocopies of certain photographs, which were marked as being Exhibits "K" through "N" of the Affidavit of Clint Hicks sworn November 10, 2009.
5. As I have said, I was asked to view only one Pan West truck, and I cannot recall which particular truck that was. Nevertheless, the plate on it was consistent with those shown in Exhibits "K" and "L". Mr. Hicks asked me for my opinion concerning these plates. The opinion that I expressed was that the installation of these plates was "a good idea". Particularly, these plates would prevent damage to the frame of the tractor unit by preventing the tractor frame from interlocking with the trailer frame.
6. I have viewed the Exhibit "M" and "N" photocopies. In my opinion, these notches have not impacted the structural integrity of the tractor frame. These notches are at the tail end of the frame, to the rear of the area involving the axles, suspension, fifth wheel, etc. In particular, where the frame begins dropping at an angle towards the rear (as depicted in the photographs), the metal becomes thinner, and does not contribute to the structural integrity of the frame as a whole.
7. I would say that the notches left behind should be repaired, but only for cosmetic purposes. There is nothing wrong with welding in patches here. This is commonly done, and in fact the factory welds in these areas. At my shop, it would cost under $200 per tractor unit, to make the cosmetic welding repairs necessary.
8. I would not agree with this statement, in relation to the notches depicted in Exhibits "M" and "N":
Cutting a piece out of the frame is extremely dangerous, as it compromises the structural integrity of the frame.
 I find that IRL knew of the installation of the steel beams since they were installed on the various trucks and chose not to do anything about them. At the same time, IRL was entitled to give Pan West notice of default as to the installation of the beams and they were entitled to seek their removal. Pan West has met all of its obligations to IRL by removal of the steel beams in accordance with the notice they received in the letter of Jul 29, 2009.
 On August 7, 2009, IRL’s lawyers wrote a letter to Pan West’s lawyers. It opens:
I am writing further to the letter dated July 29, 2009, which my client sent to your client.
 The letter states that Pan West has altered some or all of the vehicles subject to the lease without prior written consent. The letter goes on to state that “several requests” were made of Pan West to remove the alterations and restore them to their original condition. The letter accuses Pan West of failing to provide evidence that the unauthorized alterations to the trucks were removed and returned to their original condition.
 The letter states that IRL is invoking Section 11C of the lease and “wishes to exercise its right to terminate the lease with respect to all vehicles subject to the Agreement”. The letter then demands that within ten days, Pan West purchase all of the vehicles.
 The letter of August 7, 2009, does not particularize the default. By referring to the letter of July 29, 2009, the letter of August 7, 2009 suggests that the steel beams are the default upon which IRL are acting. The reference to “several requests” in the letter may suggest the alterations refer to the fuel boxes. Pan West ought not to be left guessing as to the default under which IRL wishes to invoke Section 11C of the lease.
 The letter of August 7, 2009 does not comply with Section 11C of the lease. There was no existing default at the time the letter of August 7, 2009 was written. Any previous defaults were corrected by Pan West and accepted by IRL.
 Since the delivery of the letter of August 7, 2009, IRL has not treated the lease as terminated. Rather, IRL continues to receive lease payments and services the trucks in accordance with the lease.
 Pan West is not obliged to purchase the vehicles. This remedy, sought by IRL, is dismissed.
 Having concluded that Pan West is not obliged to buy the trucks, this decision is not intended to prevent IRL from pursuing the damages claimed in their statement of claim or other remedies that they may have pursuant to the terms of the lease.
 As a result of Pan West installing the fuel box, IRL claim that the engine in truck 0612 was “dusted”. Mr. Hicks, in his affidavit, provides photographs and oil sample testing results as evidence of dusting. It is alleged by Mr. Hicks that dusting occurred when the modification of the hydrogen fuel system compromised the air intake system allowing contaminants to enter the engine. This is known as dusting. IRL is concerned that the engine will fail prematurely at considerable cost to IRL.
 On the other hand, Pan West has presented evidence from Mr. Burkholder, an experienced heavy commercial transport truck mechanic, who disagrees with Mr. Hicks’ opinion and who gives a lengthy opinion as to why he disagrees with Mr. Hicks.
 By dismissing IRL’s remedy to order that Pan West purchase the trucks, I have not ruled on whether truck 0612’s engine was dusted or whether, pursuant to Section 7C of the lease, Pan West has further obligations to IRL.
 Pan West will have its costs assessed pursuant to Appendix B, party/party costs, Scale B of the Rules.
“H.C. Hyslop J.”