Both summary motions fail in PEI farm dispute, but $258,750 costs awarded

A Prince Edward Island judge dismissed both sides’ summary-judgment motions in a dispute over farmland and equipment, but ordered Roger O’Neill and B&R Farms Ltd. to pay Barry MacLeod $258,750 in costs because of O’Neill’s dishonest conduct.

Justice John K. Mitchell issued the decision in Barry MacLeod v. B&R Farms et al., 2026 PESC 17, released July 13, 2026, by the Supreme Court of Prince Edward Island. The award is for litigation costs, including HST, not damages or recovery of the disputed property.

MacLeod established that an arrangement to hold the assets for him existed, the judge found. But obtaining the resulting-trust relief he sought would require relying on his own scheme to conceal assets from creditors. The court would not provide that equitable assistance.

A transfer arrangement, not an ordinary purchase

The dispute grew out of financial difficulties in 2010. MacLeod arranged for farm properties to be transferred to others, accompanied by side agreements under which the assets would eventually be returned. He continued operating the farm.

He later arranged transfers to B&R Farms, a company controlled by O’Neill. MacLeod said their oral agreement contemplated that he would run the farm, profits would be divided and the assets would be returned when he requested them. O’Neill denied that arrangement, maintaining that he had acquired the assets in exchange for assuming debts.

Both sides sought summary judgment. Mitchell found that the affidavit and documentary record allowed him to make the necessary factual findings, despite credibility concerns about several participants.

The documents did not support O’Neill’s account of paying for the properties. The judge found no mortgage-assumption agreement, payment cheques or other evidence establishing the claimed consideration. He also drew an adverse inference from the failure to fulfil an undertaking to provide payment details.

The evidence of MacLeod’s continuing control over farm decisions supported the existence of the arrangement. Mitchell found that O’Neill was not a bona fide purchaser for value and dismissed the defendants’ summary-judgment motion.

Why MacLeod’s motion also failed

MacLeod sought a declaration that the defendants held the assets on a resulting trust for him. That was an equitable remedy, engaging the principle that someone seeking the court’s assistance must come with clean hands in relation to the claim.

The judge concluded that the transfers and undisclosed side agreements were intended to keep the assets beyond creditors’ reach while preserving MacLeod’s ability to recover them later. His failure to disclose the claimed interest in bankruptcy was part of that broader course of conduct.

The ruling did not treat any past wrongdoing as an automatic bar to equitable relief. Mitchell recognized that a claimant may avoid the clean-hands obstacle where the claim can be established without relying on the illegality. MacLeod could not: the concealed arrangement was essential to his claim.

O’Neill’s participation did not change that conclusion. The judge found him complicit, but reasoned that MacLeod was the party who needed the court’s help to carry out the scheme. Mitchell therefore dismissed MacLeod’s request for summary judgment as well.

Costs despite the unsuccessful motion

The costs result went in the opposite direction. Although neither party had succeeded on its motion, Mitchell awarded MacLeod costs on a substantial-indemnity basis to express the court’s disapproval of O’Neill’s conduct.

The defendants objected that MacLeod’s bills did not fully comply with the required form. The judge acknowledged the deficiencies but found it would be unfair to disregard the bills entirely. He assessed them against the defendants’ own costs submission and the proceeding’s length and complexity, while rejecting some of the hours claimed as excessive.

He fixed costs and disbursements at $225,000, plus $33,750 in HST. O’Neill and B&R Farms are jointly and severally liable for the $258,750 total.

As of October 28, the Court of Appeal’s published schedule lists the parties for a motion to stay a costs order pending appeal on December 4, 2026. The scheduled motion is not a ruling granting a stay.