Baran v Can To Can Inc, 2021 ABQB 827

Court of Queen’s Bench of Alberta Citation: Baran v Can To Can Inc, 2021 ABQB 827 Date: 20211022 Docket: 2001 02874 Registry: Calgary Between: Mehmet Baran Appellant - and - Can to Can Inc. Respondent _______________________________________________________ Reasons for Decision of the Honourable Mr. Justice C.C.J. Feasby _______________________________________________________

Appeal from the Judgment by The Honourable Judge D.B. Higa Dated the 16 day of January, 2021 Docket: P1690100587 Introduction [1] The dispute between the parties arises out of the dissolution of a business relationship. The Defendant in the Court below,Mr. Baran, was an employee of the Plaintiff in the Court below, Can to Can Inc (“CCI”). CCI was in the business of providing movingand delivery services. [2] At trial CCI claimed that following the dissolution of the relationship between Mr. Baran and CCI over $40,000 in accountsreceivable due to CCI were improperly collected by Mr.

Baran in his personal capacity and not remitted to CCI. Most of CCI’s claimwas dismissed. The Trial Judge found in favour of CCI with respect to a single payment of $12,689.76 made by a company calledAcross Canada to Mr. Baran personally. [3] Mr. Baran appealed the trial decision on the basis that hearsay evidence was improperly the basis of the Trial Judge’sdecision and that the Trial Judge erred in concluding that the $12,689.76 received by Mr. Baran was properly payable to CCI. Mr.

Baranfurther appealed on the ground that the Trial Judge erred in failing to set-off expenses incurred by the Defendant in the sum of$9,580.72. CCI seeks to uphold the Trial decision. [4] For the reasons that follow, the appeal is dismissed with costs payable to CCI. Standard of Review [5] The applicable standard of review in an appeal of a Provincial Court decision is correctness in relation to questions of lawand palpable and overriding error with respect to findings of fact.

The standard of review for questions of mixed fact and law is palpableand overriding error unless there is an extricable question of law in which case the standard is correctness: see Morin v Edmonton, 2018ABQB 104 at para 6, adopting the standard approach for appellate review set out in Housen v Nikolaisen, 2002 SCC 33 ,[2002] 2 SCR 235. [6] The identification of hearsay and the application of the exceptions to the hearsay rule are questions of law reviewable on thecorrectness standard: R v Saddleback, 2014 ABCA 166 at para 8.

In the present case, the identification of hearsay is not in issue as theparties agree that the statements in issue are hearsay. Similarly, the admissibility of hearsay is not in question because the ProvincialCourt Act, s. 36 permits the admission of hearsay evidence. The dispute between the parties on appeal concerns the weight given to thehearsay evidence by the Trial Judge and the inferences and conclusions drawn from the hearsay evidence. These are questions of factand the parties agreed that the applicable standard of review is palpable and overriding error.

The Appellant also raised the issue ofwhether the Trial Judge should have drawn adverse inferences which are also questions of fact subject to review on the palpable andoverriding error standard: Stikeman Elliott LLP v 2083878 Alberta Ltd, 2019 ABCA 274 at para 92 per Slatter JA dissenting but not onthat point. Facts [7] CCI was incorporated in late 2014. CCI is owned by Senay Celikkaya. [8] Some of CCI’s business was sourced by Mr. Baran through his pre-existing business relationships. One of the companiesintroduced to CCI by Mr. Baran was Across Canada. [9] CCI provided services to Across Canada.

CCI issued two invoices, Invoices 31 and 42, to Across Canada in the total amountof $24,956.50. Invoice 31 was dated August 15, 2015 and Invoice 42 was dated August 28, 2015. [10] The business relationship between CCI and Mr. Baran broke down in August 2015. After the breakdown of the businessrelationship, Mr. Baran conducted moving and storage business for his own account. [11] CCI sent an email to Across Canada on November 2, 2015 seeking to collect on Invoices 31 and 42. By way of a respondingemail sent the same day, the Office Manager at Across Canada explained that Mr.

Baran had attended at the Across Canada offices andcollected on all outstanding invoices on October 6, 2015. The Office Manager said that because of the payment to Mr. Baran, “we don’thave any outstanding balance for Can to Can Moving Inc.” [12] Across Canada issued a cheque to Mr. Baran dated October 6, 2015 in the amount of $12,689.76. The memo on the chequeindicated that it was for “Final Payment for Can to Can Moving”. Mr. Baran testified that he deposited the cheque from Across Canadain his personal bank account.

[ 13 ] The Appellant raises the question of the identity of Across Canada. Communications from Across Canada were sent on emails or letterhead emblazoned with “Across Canada Moving and Storage”. Invoices 31 and 42 were issued to “Across Canada” with no further descriptor. The October 6, 2015 cheque was issued by Across Canada Van Lines Inc. Across Canada Moving & Storage and Across Canada Van Lines Inc have the same address.

The evidence supports the inference that Across Canada Moving & Storage is a trade name of Across Canada Van Lines Inc and that the two are in fact the same entity or that they are closely related companies. There is no evidence to the contrary. In these reasons for decision Across Canada Van Lines Inc and Across Canada Moving & Storage are referred to as simply “Across Canada”. [ 14 ] CCI’s counsel subsequently sent a demand letter to Across Canada on November 23, 2015 seeking payment of Invoices 31 and 42. Across Canada responded by letter on December 3, 2015 stating that “we made a payment to Mr.

Baran and cleared all our owing balance. We also got a letter from Mr. Baran [that] indicates that Can to Can Moving Inc collected the money and there is no outstanding balance between Can to Can Moving Inc and Across Canada Van Lines.” [ 15 ] Mr. Baran testified in his examination-in-chief that the payment to him by Across Canada was for work performed by him following the dissolution of his relationship with CCI. Mr. Baran, however, did not tender any documentation to support his assertions. Mr.

Baran’s claim that the Across Canada payment was for work performed by him personally after the end of his relationship with CCI was challenged on cross-examination. Issues [ 16 ] The issues to be determined are:

(1) Did the Trial Judge err in giving weight to hearsay evidence to render his decision in favour of CCI?

(2) Did the Trial Judge err in concluding that the $12,689.76 was money received by Mr. Baran was in payment of invoices owing to CCI?

(3) If the answer is no to both 1 and 2, then did the Trial Judge err in failing to credit Mr. Baran for expenses incurred in the sum of $9,580.72 thereby reducing the damages awardable to the CCI? Law & Analysis Hearsay [ 17 ] Counsel for Mr. Baran submits that the November 2, 2015 email from the Office Manager at Across Canada stating that the $12,689.76 was a payment for services provided by CCI is hearsay and should not be preferred over the evidence of Mr. Baran.

Citing Slimmon v Precision Fitting Ltd 2012 ABQB 771 at paras 18-22 , counsel submitted that it is a palpable and overriding error for a court to prefer hearsay evidence untested by cross-examination over evidence given by a witness at trial. [ 18 ] Mr. Baran’s direct evidence was that the $12,689.76 paid to him by Across Canada on October 6, 2015 was for work that he performed after he parted ways with CCI. On cross-examination he confirmed the November 2, 2015 email from the Across Canada Office Manager that indicated that the payment to Mr.

Baran was in respect services provided by CCI to be an accurate version of events. Counsel for Mr. Baran submits that the evidence that Mr. Baran gave in his direct examination should have been preferred and that the confirmation of events in cross-examination was clarified or recanted moments later. The supposed clarification is anything but clear and certainly is not an unequivocal repudiation of the earlier admission. [ 19 ] Mr. Baran’s confirmation of the hearsay version of events in the email from the Office Manager at Across Canada makes it his evidence and no longer hearsay.

The Trial Judge appropriately gave weight to the statements of the Office Manager explaining that the October 6, 2015 payment to Mr. Baran was for services provided by CCI. [ 20 ] Counsel for Mr. Baran also submits that Across Canada’s December 3, 2015 reply to the demand letter sent by CCI counsel is hearsay and should have been given no weight by the Trial Judge. The Trial Judge noted in paragraph 11 of his decision that he had the power pursuant to Provincial Court Act , s. 36 to depart from the formal rules of evidence to admit hearsay evidence.

He explained, however, that with respect to the material issues pleaded and the essential elements of liability and damages “hearsay is given little or no weight.” [ 21 ] A fair reading of the Trial Judge’s reasons for decision is that he admitted the explanation in the response to the demand letter but gave it little weight. Indeed, as will be explained in the next

section of this judgment, there was enough evidence on the record for him to reach his conclusion that the $12,689.76 was paid in respect of services provided by CCI without relying on the response to the demand letter for the truth of its contents. Error in Concluding that Payment to Baran was for CCI? [ 22 ] The evidence is clear that CCI provided services to Across Canada and sent Invoices 31 and 42 seeking payment for these services. There is no dispute that Across Canada refused to pay Invoices 31 and 42. Nor is there a dispute that Across Canada paid Mr. Baran $12,689.76 by way of a cheque dated October 6, 2015. [ 23 ] As noted in the discussion in the prior

section of these reasons, the November 2, 2015 email from the Office Manager at Across Canada was properly relied upon for the truth of its contents as a result of Mr. Baran’s confirmation of its contents on cross-

examination. The November 2, 2015 email is consistent with the cheque itself which states that it was for “Final Payment for Can toCan Moving”. Whether a notation on a cheque explaining the purpose of a payment is hearsay is an interesting question. See, forexample, R v Adams, (BC SC) concluding that a notation on a cheque stating the purpose for a payment is nothearsay. In any event, the issue is irrelevant to the present case because the Appellant did not assert that the notation on the cheque ishearsay or object to its use in any way.

The Trial Judge appropriately put weight on the memo on the cheque given that the author of thecheque would have had no reason to be untruthful and every reason to record accurately the purpose of the payment. [24] Mr. Baran testified in his examination-in-chief that the October 6, 2015 payment was for jobs that he completed after leavingCCI and that is why the cheque was addressed to him personally despite the memo indicating that it was for final payment to CCI.

Mr.Baran provided no supporting documentation such as invoices to corroborate his assertion that he did work for Across Canada after thedissolution of his relationship with CCI. As discussed in the previous section, on cross-examination Mr. Baran confirmed the version ofevents described by the Across Canada Office Manager in the November 2, 2015 email which, in turn, is consistent with the memo onthe cheque. [25] Counsel for Mr. Baran noted that the Trial Judge at the conclusion of the trial stated that he found the witnesses for both sidesto be honest and credible.

Based on these remarks counsel submitted that Mr. Baran’s direct evidence must be accepted. The reality wasthat the Trial Judge was faced with conflicting evidence. He was not bound to accept the version of events presented by Mr. Baran in hisdirect evidence and disregard the contradictory cross-examination and documentary evidence. [26] The Appellant submits that the Trial Judge erred in failing to draw two adverse inferences against CCI. First, the Appellantsassert that the Trial Judge should have drawn an adverse inference because CCI did not sue Across Canada for the amounts due.

Second,the Appellant asserts that the Trial Judge should have drawn an adverse inference because CCI failed to call employees of Across Canadaas witnesses. [27] The decision to sue a customer or not sue a customer is complicated and is not necessarily indicative that the business does notview the customer as liable. A small enterprise like CCI cannot be faulted for deciding not to incur the expense and inconvenience ofconducting litigation against a company located in another Province even if it may have a meritorious claim.

The Trial Judge actedreasonably in declining to draw an adverse inference against CCI for failing to commence a claim against Across Canada. [28] Justice Slatter dissenting in the Court of Appeal in Stikeman Elliott LLP v 2083878 Alberta Ltd, 2019 ABCA 274 at para 87explained that there are four factors that should be considered when determining whether to draw an adverse inference for failing to call a witness that appears to be able to give relevant evidence.[1] The factors are:

a) whether there is a legitimate explanation for the failure to call the witness;

b) whether the witness has material evidence to provide;

c) whether the witness is the only person or the best person who can provide the evidence; and

d) whether the witness is within the exclusive control of the party, and is not equally available to both parties. [29] Justice Slatter continued explaining that “[w]hether to draw an adverse inference is up to the trier of fact” and that “[a]nadverse inference is not mandatory, but the refusal to draw one must be reasonable.” (Stikeman Elliott LLP v 2083878 Alberta Ltd,2019 ABCA 274 at paras 87, 88) [30] There can be no doubt that the Office Manager at Across Canada who authored the November 2, 2015 email, and Mr.

Tacalwho authored Across Canada’s December 3, 2015 response to the CCI demand letter, would have had material evidence to provide aboutthe purpose of the October 6, 2015 payment, and would have been the individuals best placed to provide that evidence. However, theneed for the Office Manager’s testimony evaporated when Mr. Baran confirmed the Office Manager’s written version of events. Thereis no evidence as to whether the Across Canada personnel were within the exclusive control of either party. Bringing witnesses fromanother province to testify in a small case like this was not practical or realistic.

The Trial Judge acted reasonably in not drawing anadverse inference. [31] The Trial Judge was required to make findings of fact on a balance of probabilities. There was sufficient evidence for theTrial Judge to conclude on that standard that Mr. Baran collected monies from Across Canada that were actually due to CCI. Error in Failing to Credit for Expenses? [32] In the event that the Trial Judge’s decision that $12,689.76 plus judgment interest is due to CCI, the Appellant seeks a“credit” for expenses that he incurred for the benefit of CCI in the amount of $9,580.72. This is a claim for set-off.

The Trial Judge didnot deal with the set-off claim. The Dispute Note does not state any counterclaim or claim for set-off for expenses incurred by Mr.Baran. [33] The law is clear that pleadings may be amended even at trial: Attila Dogan Construction and Installation Co. Inc v AMECAmericas Limited, 2014 ABCA 74, para 24. The Court explained, however, that an amendment should not be permitted if the proposedamendment was hopeless. The amendment is not allowed because the set-off claim is hopeless. [34] Mr. Baran’s claim for expenses incurred after he parted ways for CCI is conceptually flawed.

The expenses were incurred byMr. Baran while pursuing business for his own account, not for CCI. If CCI is entitled to the funds paid by Across Canada to Mr. Baranbecause those funds were for services provided by CCI prior to the dissolution of the business relationship as this court has found, thereis no plausible justification for the set-off of expenses incurred by Mr. Baran while pursuing business for his own account after thedissolution of the business relationship with CCI.

Conclusion [ 35 ] The appeal is dismissed with costs and reasonable disbursements payable to the Respondent. Not knowing the outcome of the appeal, the parties agreed, and the court now orders, that the appropriate amount of costs payable to the successful party for the appeal is $2,733.75. Heard on the 15 th day of October, 2021. Dated at the City of Calgary, Alberta this 22 nd day of October, 2021. C.C.J. Feasby J.C.Q.B.A. Appearances: Chris Rappel for the Appellant Curtis Wolff for the Respondent