2013 BCPC 295, 2013 BCPC 295

Citation: 0867007 BC Ltd v. Destinations International Date: 20130920 2013 BCPC 0295 File No: 11-22495 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: 0867007 B.C. LTD., DOING BUSINESS AS GET GREEN LANDSCAPES CLAIMANT AND: DESTINATIONS INTERNATIONAL DEVELOPMENT CORP. (BC0390661) DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE DYER Appearing for the Claimant: L. Dion, an officer of the company Counsel for the Defendant: P. Backhouse Place of Hearing: North Vancouver , B.C. Date of Judgment: September 20, 2013 A corrigendum was released by the Court on December 19, 2013. The corrections have been made to the text and the Corrigendum is

appended to this document. [ 1 ] THE COURT: This is a claim by the claimant represented at trial by Mr.

Dion for, alternatively, rescission of a contract said to be made June 30, 2010, with the defendant whereby the claimant was to buy the defendant's Turf Logic franchise, a grass-cutting and lawn maintenance business, or alternatively, a claim for damages for breach of the contract or, I suppose, further alternatively, a claim for damages for the tort of unlawful interference with commercial rights. [ 2 ] The defendant was represented at trial by one Alan Dudley who, at all material times, was the president, secretary, sole director, and owner of the defendant company incorporated on July 13, 1990. Mr.

Dudley acquired a Turf Logic franchise through Destinations in 2007 from Turf Logic Inc., an Ontario franchisor carrying on business in Barrie, Ontario, and represented at trial by its former president and owner, one Rob Corey. [ 3 ] The franchise involved a lawn care business model involving a special mode of determining whether a given customer required fertilizers or not, cutting, lawn care and maintenance, and the provision of certain pesticide-free products from the franchisor to the franchisee.

The franchisee displayed the Turf Logic trademark on his truck, and the business involved serving mostly residential customers. As there was no other franchisee on the North Shore, Mr.

Dudley was permitted by the franchisor to service this entire area, although his franchise was really restricted to the North Vancouver area only. [ 4 ] The lawn-cutting customers were billed monthly, whereas the lawn maintenance customers, of which group some approximately 80 percent of the cutting customers belonged, entered into annual maintenance contracts and paid in advance for services required on their lawns from the spring to fall, including possibly the application of fertilizers, aerating, and over-seeding. [ 5 ] No evidence was given before me at the trial of this matter as to what a typical lawn-cutting customer paid for this service, how often it was performed or for how long, that is to say, over what months, nor was any evidence offered as to the contractual charges or revenues received by anyone from the lawn maintenance customers or cutting customers at any time.

No example of a contract between the defendant or claimant and any type of customer was filed in the evidence. No copy of Destinations' franchise agreement with Turf Logic Inc. was filed at trial. No income statement for Destinations was filed nor was one filed for the claimant for any period of time. [ 6 ] In 2010, Mr. Dudley, having built up what he felt was a decent customer base, a task which he started in 2007, elected to sell his business. He was in a relationship with a woman in Vanderhoof and wanted to move up north and live with her and work in the north in a recycling job.

In early spring 2010, he therefore advertised his business on Craig's List in Vancouver. [ 7 ] In March 2010, Mr. Dion called him, representing the claimant company. I should state, Mr. Dion is neither a director nor officer of the claimant but merely an employee. He expressed an interest in acquiring the defendant's business, and he negotiated with Mr. Dudley, who received some legal advice as to the content of an agreement, but not, apparently, Mr. Dion. Ultimately, the two men, on behalf of their companies, reached an agreement which they executed on June 30, 2010.

Both parties agree that the key element in this agreement was the defendant's customer list said to number approximately 73 to 75 residents in June 2010. [ 8 ] Mr. Dion testified that he and one Ian Snow, also somehow connected to the claimant but not called to testify at trial, felt they should have a non-compete agreement as well. No such express provision exists in the June 30, 2010, agreement. Mr. Dion said such provision was always expected and discussed, I assume with Mr. Dudley. According to him, these discussions predated the June 30 agreement.

He could not say the two of them discussed Dudley's non-solicitation of customers but saw no difference in the two concepts. There is a significant difference in the two concepts. [ 9 ] He said Mr. Dudley assured he and Mr. Snow that he would not compete against them and said that he would not even be around, that he was going to Vanderhoof to be with his girlfriend. Mr. Dion said no such clause was placed in the June 30 agreement with the defendant because he trusted Mr. Dudley, but this was an oversight, he felt, on his part, likely with hindsight. [ 10 ] Mr.

Dudley testified that there was no noncompetition clause negotiated with Mr. Dion before the June 30 agreement was executed and that this was the final agreement between the vendor, Destinations, and the claimant company represented by Mr. Dion. In cross-examination, Mr. Dudley said, when questioned by Mr. Dion, that in late 2010 and 2011, in essence, he was under no obligation to the claimant with respect to noncompetition on the North Shore in the lawn care and cutting field and that he had no non-compete agreement with the claimant. He agreed, in answer to a question from the court, that he and Mr.

Dion had discussed a noncompetition agreement but never agreed to one and that later, in November 2010, he had told the franchisor's representative, Mr. Corey, that he would not sign such an agreement with the claimant. [ 11 ] I find as a fact that there was no oral noncompetition agreement or non-solicitation agreement made between the parties by Mr. Dion and Mr. Dudley up to and inclusive June 30, 2010, or thereafter.

I will later deal with whether a written noncompetition agreement was, after June 30, 2010, entered into between them and, if so, whether there was any consideration for same so as to make it a binding legal contract and, as well, whether a further or different term should be implied in their agreement as to non-solicitation of customers and, if so, whether it was enforceable or ever breached by the defendant. [ 12 ] The June 30 agreement is, in my view, very poorly drawn.

It provides for certain payments from the claimant to the defendant in Clause 2.3 but does not say when they are to be made by the claimant purchaser save "on completion," which concept is nowhere defined in the agreement. [ 13 ] Mr. Dion has testified in this agreement he was buying and intended only to buy a client list, and it was optional for him that he was buying or had to acquire a franchise, to wit: Mr. Dudley's franchise. The claimant, after June 30, intended to consider, according to Mr. Dion, whether or not they would carry on with the Turf Logic franchise.

From the claimant's perspective, the client list was the only value in the business. He felt he paid $5,000 for the customer list, and for this price, the claimant was buying the right to continue to do all work for the defendant's customers, apparently whether or not he paid the balance of the purchase price to the defendant called for in

the agreement. [ 14 ] Mr. Dion said he talked with the franchisor in Ontario at the end of June 2010 and the end of July 2010, again, Mr. Corey, and said the claimant was then trying to determine if it would move ahead as a Turf Logic franchisee or not. Ultimately, the claimant decided that they would either become a territorial franchisee for Turf Logic or not become one at all, for example, in a smaller area such as North Vancouver. [ 15 ] Mr. Dudley said that he was at all material times selling more than a customer list. He was attempting to sell his franchise business.

He testified that he could not just sell his customer list alone or he would be in breach of his franchise agreement. He never intended to just sell this alone and said there was no value in his doing so. This is clearly so. [ 16 ] On a review of the June 30 agreement, I find, on its face, that on a fair and reasonable

interpretation, it supports Mr. Dudley's view. Had the claimant been buying a customer list for $5,000, which Mr. Dudley acknowledges receiving in part on July 6, 2010, from the claimant, Clause 2.3, in my view, would not contain the closing phrase " and a deposit towards purchase of the balance of the franchise " nor would Clause 2.3(

c) end with the word " and " linking all the purchaser's obligations and items of consideration together. [ 17 ] I reject Mr. Dion's

interpretation of the agreement which may suit his side of this case but cannot, in my view, be supported on a straightforward and fair construction of all the words in the June 30, 2010, contract itself. I find that the only money the claimant paid on the total consideration referred to in the agreement, namely, $29,000 not including GST, was the above $5,000. Nothing further was paid to anyone under this agreement. [ 18 ] Mr. Dion said that after June 30, the claimant received a list of some of the defendant's customers but apparently not all.

On or about June 30, he received a list of approximately 25 lawn-cutting customers. He was then in a position to cut their lawns immediately. There was some evidence given by a customer, one Mrs. Annala in North Vancouver, that this work was done under the direction of Mr. Snow by an unnamed hireling. Mr.

Dion said the claimant received a partial list of some 30 to 35 lawn maintenance customers in July 2010 from the defendant and thereafter did all the maintenance work on their lawns, in essence, as required by their earlier contracts made with the defendant company. [ 19 ] Later in the fall, other work was required both on their lawns and, as well, on all remaining lawn maintenance customers whose names had not been provided to the claimant in July, and Mr.

Dion said the claimant did all required work and, in the result, paid the $10,000 amount referred to in Clause 1.3 of the June 30 agreement. [ 20 ] On or about September 18 or 19, 2010, Mr. Dion called Mr. Dudley and asked for the balance of the list of lawn maintenance customers, being approximately 35 in number, so that they could do all the required fall work on all lawns. Mr. Dion said Dudley promised to provide these shortly so they could start the outstanding work on Monday next but did not do so.

By this date, not all the money owing under the agreement had been paid by the claimant to the defendant, and Mr. Dion felt that Mr. Dudley was withholding these 35 names as a form of bargaining tool to get paid. Mr. Dudley was then angry with Mr. Dion because the claimant was taking so long to close the purchase and pay the purchase price to him. By mid-September 2010 or so, Mr. Dion testified that he and Mr. Dudley had virtually stopped communicating with one another. [ 21 ] Mr.

Dion also testified, in essence, that he needed this list of 35 customers in September 2010 so that the claimant could complete the contract and perform all the services required for existing customers. This can be said, but I interpret Clause 1.3 to mean that of the $29,000 purchase price, $10,000 would be paid at some unstated future date which, on the evidence, would be in the fall of 2010 when all previously contracted lawn maintenance work with the defendant for all customers was done and not before.

This clause does not dictate when the other payments were to be made or when the completion date of the entire deal would be. [ 22 ] When no completion date is set out in a contract, the court may find that the date would be a reasonable date after the contract was made and imply such a time or date into the contract to give it meaning from a business standpoint. I note there is also no date as to when the defendant seller in the June 30 contract had to pony up complete lists of all customers to the claimant.

I find that this step was a step within Clause 2.1 that the seller had to take to transfer the business to the claimant purchaser, but again, no date is set as to when, in relation to the completion date, whenever that might be, this important step was to occur and be done by the defendant. [ 23 ] Doing the best I can with all the evidence in this case, I find that a reasonable date for completion of the purchase would have been October 1, 2010, and that all customer lists ought to have been provided on that date to the claimant, however only upon the claimant first meeting all of its obligations to the vendor other than fulfilling Clause 1.3.

This it did not do by October 1, 2010, and it could not then have reasonably expected to receive all consideration from the vendor when it had only paid $5,000 of the approximately $19,000 cash payments required to complete its side of the bargain. [ 24 ] After mid-September, discussions and negotiations between the claimant and the franchisor, Turf Logic Inc., with Mr. Corey continued. The claimant had not completed the purchase of Mr. Dudley's franchise at this point and seemed then determined to try to negotiate for a larger territory with Mr. Corey, the franchisor's representative, essentially bypassing Mr.

Dudley. The franchisor was then owed money by Mr. Dudley, so I find it stepped in to see if it could help bring closure to the transaction between the parties to this litigation and, of course, in the result, itself get paid. [ 25 ] By September 16, Mr. Corey was telling Mr. Dion, "At this point, we do not see moving forward with the proposal that you made to me last week. It doesn't make much sense to us." The proposal, according to Mr. Corey, related to a master franchise agreement of some sort to cover the Lower Mainland, with the claimant as franchisee. The same day, Mr. Dudley was also corresponding with Mr.

Corey, forwarding a draft settlement proposal of his dispute with the claimant to Corey for his review. It was approved by head office and sent to Mr. Dion at 10:22 a.m. on September 16. The proposal gave the claimant five days to pay the outstanding balance on the purchase, and if not, the defendant said it would assume the terms of the purchase agreement would not be met, and Mr. Dudley said he would then travel to Vancouver late next week and fulfil the obligations Destinations had on its various outstanding lawn maintenance contracts with customers. [ 26 ] On September 20, Mr. Dion was in touch with Mr.

Corey, and the same day, Mr. Corey later sent an email to Mr. Dudley

proposing what I construe to be a settlement of two obligations: (1) the majority of the money owed by the plaintiff to the defendant under the purchase agreement, namely, money Dudley owed Turf Logic for outstanding franchise royalties and product, and (2) the money Destinations owed Turf Logic under its franchise agreement, said to be $13,400. The offer the claimant made was that $11,300 would be paid by the claimant to Turf Logic Inc. in Barrie, Ontario, and they would consider Destinations' outstanding account with them to be paid in full and would release it.

Implicit in this offer was that the claimant would also owe nothing to Dudley or to Destinations under the June 30 purchase agreement save, in my view, for the balance of $2,894.62 referred to in Clause 2.3(b). All money was to be paid to Turf Logic by the claimant. [ 27 ] Dudley agreed to this offer. In the result, on October 6, 2010, Turf Logic Inc. in Barrie forwarded a letter to Mr.

Dudley stating as follows: This is to inform you that effective October 6, 2010, you, Alan Dudley, and Destinations International Development Corp. are released from all further obligations, whether financial, contractual or otherwise, that may exist in regards to the Franchise Agreement between Turf Logic Inc and Destinations International Development Corp and Alan Dudley, dated March 7, 2007. Your account with Turf Logic Inc has been zeroed and no further billings will be incurred. This letter is signed by Rob Corey, President of Turf Logic Inc. [ 28 ] Mr.

Dion's direct evidence was that he eventually got the balance of the list of lawn maintenance customers after he paid Mr. Dudley's outstanding balance with Turf Logic. He said they settled at $11,000. Neither of these two statements are accurate. He said a second time in his direct evidence, "We paid $11,300 on October 6, 2010," and then clarified that the claimant only took over this outstanding Destinations account and became responsible for it to Turf Logic Inc. He agreed that Dudley gave him the remaining customers on the list within a week of October 6, 2010.

Only then could the claimant do the lawn maintenance work on these customers' lawns, which he said they did on all lawn maintenance contracts. [ 29 ] There then arises a conflict in the evidence in this case. Mr. Dion said that as at October 6, I understood after the $11,300 settlement had been struck, the $2,894.62 amount forming part of the purchase price payable by the claimant to the defendant pursuant to Clause 2.3(

b) of the agreement was still outstanding and said that this was to be paid in four equal payments commencing in November 2010 to February 2011. However, these were never paid by the claimant to the defendant because the claimant felt that the defendant, by reason of an email sent to all its former customers on October 8, had not lived up to his end of the bargain, in essence, respecting that goodwill was being transferred to the purchaser and helping to keep the customers with the new purchaser. [ 30 ] Mr.

Dudley said that on and after October 6, he was never paid in full by the claimant and forgave part of the money he was due from the claimant, I think referring to the purchase agreement. It is unclear just how, when, and where Mr. Dion and Mr. Dudley, who were not speaking with one another by mid-September 2010, arranged for the payment of the $2,894.62. No emails on point have been provided. In any event, Mr. Dudley said this sum, both parties agreed, was still outstanding after October 6, 2010, and was never paid by the claimant to the defendant. [ 31 ] After October 6, 2010, Mr.

Dudley's company, Destinations, but for the October 6, 2010, letter, would have been bound by an express noncompetition clause found in its 2007 franchise agreement given in favour of the franchisor, Turf Logic Inc., and to run for a period of two years.

This would mean, in practice, once Turf Logic Inc., the franchisor, settled with him, they could get a new franchisee to work the former franchisee Destinations' North Vancouver territory without competition from Destinations. [ 32 ] It seems clear from the franchisor Turf Logic's standpoint in the late summer of 2010, they perhaps hoped that that entity might be the claimant, but it never finalized a franchise agreement of any sort with the claimant despite, according to Mr.

Corey, the claimant having completed an application of some sort for one in a meeting in Barrie, Ontario, on or about June 30, 2010. [ 33 ] The above noncompetition clause would only have been of benefit to the franchisor. However, on and after October 6, 2010, Turf Logic, in what Mr. Corey admitted was an unfortunate piece of correspondence set out in full above, essentially released Destinations from its obligations to Turf Logic Inc. under the franchise agreement including, I think, the requirement that it observe the franchise agreement noncompetition clause made in favour of the franchisor. [ 34 ] Mr.

Dudley's evidence was that he understood that because no consideration had been paid to Turf Logic Inc., and I expect he meant by the claimant, that he or anyone could solicit his old customers and, I expect, anyone on the North Shore. [ 35 ] Subject always to whether the court should imply a non-solicitation clause into the contract I find that this is and was a correct point of view on and after October 6, 2010, but not for the reason stated.

There was then no express noncompetition agreement in effect binding Destinations or in favour of anyone, including the claimant or Turf Logic Inc. [ 36 ] On October 1, 2010, the purchase agreement had not been completed by the claimant and not all money called for thereunder had been paid to the defendant by the claimant. The $11,300 the claimant agreed to pay Turf Logic Inc. was not the entire remaining consideration under this agreement owing to the defendant by the claimant regardless of whether it was paid or not. Mr. Dudley had made it clear in his email to Mr.

Dion of September 16 that he expected the $2,894.62 to be paid by September 21. It was not. I have found, in essence, that it ought to have been paid on or before October 1, 2010, the completion date that I have implied into the June 30 contract. [ 37 ] In the result, the claimant seeks to rely on an implied term in the contract made June 30, 2010, which it never fully performed. I will return to this point. [ 38 ] On October 8, 2010, Mr. Dudley sent an email to all 75 of his former lawn-cutting or lawn maintenance customers, and I will set it out in full. It states as follows:

Hello: I am writing this from Vanderhoof, B.C., where I am involved in helping to establish a recycling program and, hopefully, to set up a resource recovery depot similar to that found at the North Shore Transfer Station. I became aware of this interesting opportunity in the early Spring and found a prospective buyer for the Turf Logic North Shore franchise. The buyer was Get Green Landscapes. I felt it was a good fit, since the company offers gardening and hedge trimming (with a mechanical lift) services, as well as mowing. They had been contracting out their fertilizations.

The owner/operator of Get Green Landscapes is Ian Snow. His common-law wife's father and financial backer is Leo Dion. Mr. Dion and I negotiated a deal in late June whereby Ian would take over the weekly mowing customers, and eventually, the natural lawn care portion. That deal involved their paying a small down payment, with the balance to be paid at the latest by the end of August . Well, the rest of the money was not paid. But, by then, I was well into the recycling project. So, Mr.

Dion and the franchisor came up with a reduced payment arrangement which they compelled me to accept. [Emphasis added] The other part of the deal was that Get Green Landscapes was to fulfill the outstanding lawn care services. For instance, those whose lawns were not aerated in the Spring, but who had already paid for the service, were to have had their lawns aerated in August/September, and the final application of 5-1-5 was to be made in September/October. The same applied for overseeding. It is now the first week of October.

I am hopeful that Ian Snow will work hard to fulfill the outstanding lawn care services by the end of this month. The contact information for Get Green was then provided in this document, and it goes on to conclude: Despite my considerable efforts towards a smooth transition, the mid-season change of ownership did not go at all as I had planned. For the resulting uncertainty and lack of clarification, I apologize. Thank you for entrusting me with your lawn care; I shall miss you.

Sincerely, Alan Dudley (emphasis added) [ 39 ] This email solicited at least one email response on October 8 from a former Destinations cutting and maintenance customer, one Ms. Carrillo, as follows, and this was sent to Alan Dudley at 5:55 p.m. by email, and it states as follows: Yes, we will miss you as well. Alan, so sorry to tell you that we won't continue the service with these gentlemen. Well, I never did see anyone around our house, no notice, nothing .... I didn't see anything on the grass that would suggest that the job was finished. Just don't know.

I would never pay anything in advance again ... sorry to say, but that's how I feel right now. Wishing you all the best :) Susanne

[ 40 ] This email is hardly a customer endorsement of the claimant's work on her lawns. [ 41 ] With respect to the October 8 email, it cannot, in my view, be seen to be some form of customer solicitation by Mr. Dudley or his company, then in the recycling business in Vanderhoof, nor some aspect of an effort on his or Destinations' part to compete with the claimant. [ 42 ] In cross-examination, Mr. Dudley said one of the assets he felt the claimant had agreed to purchase was the goodwill in his customers. He sent the October 8 email to his customers in order to tell them what was going on behind the scene.

He agreed perhaps he had said too much in it. He agreed, in answer to a question from the court, that perhaps he should, in hindsight, have left out the second and third sentences in the first main paragraph on page 2 of the email. He said possibly people might read the third sentence, namely, "Well, the rest of the money was not paid," and think ill of Mr. Dion. [ 43 ] He agreed in the fall of 2010 his new relationship was not going well in Vanderhoof. His partner wanted to reside up North, and he did not. He said, in answer to a question, "What prompted you to come back?" that he loved the lawn care business.

It was not established in the evidence before me just when it was that Mr. Dudley made the decision to return to the North Shore but, in answer to a question from the court, said it was not as early as October 8. He said he went to North Vancouver because he learned from Mr. Corey that the agreement the claimant had with Turf Logic (and there really was no agreement) and which he had never seen was never completed, and in the result, in his mind, he felt he was under no obligation to Mr. Dion or the claimant, and the customers needed to be serviced.

He testified he would not have gone into North Vancouver if the claimant had fulfilled its agreement with Turf Logic Inc. [ 44 ] While this evidence shows a certain sense of honour and perceived fair dealing on the part of the defendant, it is not really based on any clear contractual understanding or provision save perhaps the noncompetition clause which Mr. Dion says existed on and after November 15, 2010, or the non-solicitation term which he says should be implied into the contract, both of which I will come to shortly. [ 45 ] Mr.

Dudley said on October 8, 2010, he was still working in recycling in Vanderhoof. His contract was to end November 30, 2010, but in the last week of November it was renewed for some six months. He was then still in Vanderhoof but did move down to the Lower Mainland on December 18, 2010, to live permanently. He had earlier given notice to the recycling company. This could not logically have preceded their offer to extend his contract in the last week of November. He said he did not intend to get back into the lawn care business until January 3, 2011.

By this date, he had spoken with Rob Corey and learned that any deal with the claimant and Turf Logic Inc. in Barrie was not going ahead and testified that it was, in his view, okay to contact his old customers, which he said he did, a bit late, in mid-February 2011. He testified that he now services some 28 customers, 25 of which live on the North Shore and of which 22 were to have been purchased by the claimant under the June 30 agreement. He said he was now a competitor with any other company doing the same business as he was in the same area.

He described the lawn care and maintenance business to be very competitive. I find that this is so. [ 46 ] Mr. Dion said that it was his opinion that the October 8, 2010, email from Mr. Dudley to all the customers he felt he had then bought from the defendant painted his operation to be not reliable or trustworthy. I note that he has not argued that any of the October 8 email content is untruthful. [ 47 ] By the end of October 2010, Mr. Dion said he had called all 75 customers, including Ms. Carrillo.

He tried to comfort them and told them all the work they had paid for to Destinations would be completed by the claimant if it was not done already. This evidence is somewhat at odds with his earlier evidence that the claimant did all previously contracted lawn maintenance work and therefore had paid the $10,000 referred to in Clause 1.3 of the agreement. If it had, why tell the same customers it would be done in late October? [ 48 ] In January or February 2011, the claimant learned in a telephone call with Ms. Carrillo that she would not be renewing her lawn maintenance business with the claimant. Mr.

Dion said in these two months he called all the 75 customers and learned most had been contacted by Mr. Dudley. Mr. Dudley did not really dispute this evidence. The common message Mr. Dion received from them was that Mr. Dudley, then carrying on business as Nekato Landscaping, was going after their business. He testified that he lost 60 of the 75 customers he got from the defendant. He did not, in cross-examination, successfully attack or challenge Mr.

Dudley's evidence that he was able to keep only 22 of his original 75 customers. [ 49 ] In the result, by simple arithmetic, the majority of the customers the claimant lost, 38, therefore went somewhere else in 2011, other than to the defendant, with their lawn-cutting and maintenance needs. [ 50 ] Mr. Dion testified that in September 2010, Mr. Corey helped he and Mr. Dudley come to an agreement whereby the claimant would take over Dudley's outstanding debt with the franchisor. Dudley would forward a final customer list to the claimant, and Mr.

Corey would prepare a non-compete clause acceptable to the two of them. There is no mention of any non-compete clause, as I have said, in the September 20, 2010, email from Mr. Corey to Mr. Dudley, which deal Mr. Dudley said he agreed to, proposing, in essence, a three-way settlement whereby the claimant would pay $11,300 to Turf Logic Inc., who would accept it as full payment of Destinations' account, and the defendant would not get the $2,900 cash, I assume from the claimant, but would walk away free and clear, whatever this means. [ 51 ] On November 3, 2010, Mr. Corey sent an email to Mr.

Dion with proposed non-compete language for consideration in a future agreement with the defendant in favour of the claimant. Why the franchisor would do this is not really clear, save that the claimant then owed it $11,300, assuming some form of agreement existed on point, which had not been paid, and I have no doubt that the claimant was using this fact to perhaps try to get Mr. Corey to assist in attempting to get what it wanted from the defendant with whose representative, Mr. Dudley, Mr. Dion was no longer on speaking terms. [ 52 ] A further document containing non-compete language was drafted by Mr.

Corey in late October 2010 and sent to Mr. Dudley, who received it in November, prior to November 15, but never signed it despite being asked to do so, I believe, by Mr. Corey. By November 15, 2010, Corey had extracted the non-compete clause from Destinations' original 2010 franchise agreement with Turf Logic Inc. and sent it to Mr. Dudley by fax from Barrie, Ontario. Corey said Mr. Dudley signed it and apparently sent it to him and that he then sent it to Mr. Dion in British Columbia by fax on November 18, 2010.

This document, marked as Exhibit 4 at trial, contains the following handwritten statement on the very bottom as follows:

All obligations in this document are transferred to Get Green Landscapes as part of the purchase agreement. There then appears two initials, an "A" and a "D," and a date, "11/25/10." [ 53 ] I observe that but for this handwritten language at the bottom, the non-compete clause extracted from the 2007 franchise agreement, even signed as it is and without more, is no agreement with anyone as it does not even state who the contracting parties are and it is not executed by the claimant thereby signifying its agreement, which event never occurred. [ 54 ] Mr.

Corey said he put this handwritten phrase on the bottom of this document after Mr. Dudley signed it and before sending it to Mr. Dion in B.C. to try to put a statement on the document in line with what Mr. Dion wanted. Corey said that Mr. Dudley had signed this document before it went out to Mr. Dion but not below the above handwritten statement. Corey said after his fax to Mr. Dion, Mr. Dion called him or emailed him and said the language in the non-compete document was not sufficient. He was unsure if he and Mr. Dion discussed the above language and said they might have done so.

However, Corey was very clear that he had never sent the non- compete document to Mr. Dudley and that Dudley had never signed it, referring to the handwritten phrase at the bottom, and sent it back to him. He did not know who put the initials "AD" and the date on the bottom of this document, Exhibit 4. He had looked for the original of this document in his business papers in Barrie but could not find it. [ 55 ] Mr. Dudley recalled that Mr. Corey had sent him Exhibit 4 and asked him to sign it. He was familiar with the terms. He said twice in his direct evidence he did not recall signing Exhibit 4.

Finally, he seemed to come around to agree that he had done so and agreed his signature was on the line approximately two-thirds of the way down the page with a date to the right of it, namely, 11/15/10. Very importantly, he said the printed portion of the bottom third of Exhibit 4, the above handwritten phrase, was never part of the document when he signed it nor did he set out the date "11/15/10." The initial "AD" was not his. He said he never initialled things in this fashion. The date 11/25/10 to the right of the initials at the bottom was also not his.

He said he first saw this document in the course of the document disclosure part of this action. [ 56 ] Mr. Dion said that Mr. Dudley, on November 15, had signed Exhibit 4 and sent it to Mr. Corey in Ontario but not to him. He said he first saw the document on November 18, 2010, with Mr. Dudley's signature but not the handwritten add-on. He received it by email from Mr. Corey. Mr. Corey had procured Mr. Dudley's signature. It made no mention of his company's name. He read it and was otherwise okay with the wording. He called Mr. Corey November 19 or 20 and asked him to add a reference to Dudley's company name.

Rob Corey acknowledged his concern and said he would talk to Alan Dudley. [ 57 ] Exhibit 4 is what he got back after November 18 and before the end of the month, he thought on November 27 or 28, I understood from Mr. Corey. He believed the handwriting in the above phrase was that of Mr. Dudley. He testified that the final initials "AD" were Mr. Dudley's, but he had no proof that they were. He had no reason to believe they were not. He did not sign Exhibit 4 anywhere as he was not asked to do so. He was then asking for an acknowledgement from Mr.

Dudley he would not compete, and it was to be the final term of the June 30 agreement. He said he never had the original of Exhibit 4. Mr. Dion said he had no other part of Exhibit 4 at home. He denied in cross-examination that he fabricated any part of it, including the initials and the date following the initials. [ 58 ] Mr. Dion said he had received five to eight emails or letters from customers asking if his company had done the lawn maintenance work. These were not complaints. He responded by assuring them the work was done or would be done. [ 59 ] Mr.

Dion called no Get Green customer at trial to testify on anything and, importantly, to state that they left Get Green to go with Mr. Dudley in 2011 for their lawn care needs either because of the October 8 email which they had received and/or because Mr. Dudley was actively soliciting them. [ 60 ] Mr. Corey testified as to certain customer communications that Turf Logic Inc. had received in the fall of 2010. He said in early September, Turf Logic Inc. had received some communications from certain of Mr.

Dudley's clients expressing concerns over the services they were receiving and whether or not they would be completed because they had not seen anyone at their property nor had they heard from the new owner of Mr. Dudley's business. These included certain emails Mr. Dudley forwarded to him and approximately three to five telephone calls that Mr. Corey had received in Barrie. He forwarded this information to Mr. Dudley and/or Mr. Dion. He thought Mr. Dion gave him an assurance that the work would be done by Get Green, that is to say, the claimant.

He was familiar with the October 8 email that Dudley had sent out to all his customers. He did not recall Dudley running it by him before it went out. He did not recall receiving any calls from Mr. Dudley's customers after October 8 concerning it, namely, the email. He believed that any damage that had been done to or with them had been done before this email ever went out. [ 61 ] The defendant called one of its former customers to testify, one Susan Annala, a homeowner on West Keith Road in North Vancouver, who said she was very satisfied with Mr.

Dudley's lawn maintenance services and hence had renewed with him in the year 2010. This is really the only evidence I have as to the length of the homeowners' contracts, that is to say, one year. She learned he was selling his business, but not from Mr. Dudley, in the spring of 2010. She met with Mr. Snow, I assume, in the summer of 2010. In her first meeting with him, he asked if her lawn had been limed and told him Mr. Dudley had taken a soil sample and said it did not need lime, and Mr. Snow apparently responded that the claimant did things differently.

She did not see anyone or speak to anyone again until October. She emailed Mr. Dudley and learned that he had sold his business to the claimant. She then called Mr. Snow at the end of October who said the claimant would honour and do all work she had paid for to the defendant which had not been done. [ 62 ] He came in early November and a hired hand then aerated her lawn and put seed down at a great rate of speed while Mr. Snow apparently sat in the truck. It snowed one week later.

The aeration holes did not close properly, and the grass plugs, in her view, were unsightly for some prolonged period of time. [ 63 ] When Mr. Dion sought her business in early 2011, she did not respond as she said she was not a happy Get Green customer. She felt the lawn maintenance work should have been done in early to late October at the latest. When Mr. Dudley contacted her in mid- January 2011, she had by then made a decision not to go with the claimant. I was not clear that she is now one of Mr. Dudley's North Shore customers.

[ 64 ] Finally, she said, each spring she received approximately six letters or phone calls from different lawn maintenance service providers. Discussion [ 65 ] Was there a binding written noncompetition agreement made between the claimant and defendant? In my view, there was not. Mr. Dion's evidence on point makes no sense. Why would Mr. Dudley, in light of the October 6, 2010, release letter from Turf Logic, give or make such a concession to the claimant, and in November? I find I prefer Mr. Dudley's evidence over that of Mr. Dion on point. Mr. Dion provided no other documents supportive of his view that Mr.

Dudley had initialled the handwritten addendum to Exhibit 4 found at the bottom. Dudley's evidence that he did not write this addendum or initial it is corroborated, I think, by Mr. Corey, who said that he had written the phrase. Clearly, in November 2010, Mr. Corey was trying to humour Mr. Dion, I suspect, so that the claimant would potentially pay money to Turf Logic Inc., the $11,300 it had somehow agreed to earlier but never did. [ 66 ] There is no evidence that Mr. Corey signed "AD" to his own above handwritten addendum to Exhibit 4. Mr.

Corey was not cross-examined on this interesting point at trial as he should have been if the claimant seriously wished to advance this theory, which I reject. [ 67 ] The claimant's Mr. Dion admitted he could not prove that Mr. Dudley initialled the addendum. I accept this evidence as truthful. I also find that even if Mr. Dudley had initialled the addendum put on Exhibit 4 by Mr. Corey, that the written noncompetition clause cannot be seen as another term of the June 30, 2010, agreement the parties made.

It was never signed by the claimant, and more importantly, there was no new consideration for this new agreement, assuming it was an agreement at all.

It would therefore not, in our system of law, be a legally binding contractual term and enforceable by anyone. [ 68 ] I find there was no express noncompetition or even non-solicitation agreement made between the parties to this lawsuit. [ 69 ] The claimant raised for the first time in his closing written argument that the contract of June 30, 2010, should have a term implied into it that the defendant would not solicit the former customers of the business it then sold to the claimant.

If it existed, such a term would clearly be a benefit only to the purchaser claimant. [ 70 ] There is no reference in its notice of claim to the claimant relying on an implied term that on the sale of its business the defendant vendor would not solicit former customers. All the notice of claim says on point is an allegation that the defendant breached its contractual duty not to compete by soliciting customers. [ 71 ] Only very narrowly do I find this pleading contrary to counsel for the defendant's closing argument to be broad enough to encompass this allegation advanced at trial in argument.

Nor do I find that the fact that the claimant did not in a timely way, as ordered by the court, draw the case on which it relies, namely, Mid Island Truck and Crane Ltd. v. Simian Cartage Inc. , [2011] B.C.J. No. 957 , a judgment of Mr. Justice Joyce, to its attention, a reason not to consider this decision which, if it cannot be distinguished on its facts, is binding upon me. [ 72 ] In Mid Island , the parties agreed to the purchase and sale of a trucking business on Vancouver Island. The plaintiff was the purchaser. The contract was an oral one.

The court found that the defendant sold its trucking business to the plaintiff, inclusive of its goodwill. One term required that the defendant would assign its interest in its truck to the plaintiff in exchange for the plaintiff purchaser assuming the lease payments and paying it $10,000. The oral agreement was said to have been made in August 2003. No date was apparently agreed to, as in the case at bar, as to when this consideration, the $10,000, was to be paid by the plaintiff to the defendant vendor. It was paid approximately one year later in June 2004.

Part of the oral contract also involved the defendant giving its customer list to the claimant so that it could service the same, and Mr. Justice Joyce held that this was part of the oral contract, at paragraph 34 of his reasons. [ 73 ] Very importantly, as I read the Mid Island decision, there was no finding made by Mr. Justice Joyce on the evidence before him that the plaintiff purchaser had breached the oral contract made with the defendant even though, for example, the above $10,000 seems to have been paid by the claimant to the defendant for the truck somewhat late in the day.

This sole and very important fact distinguishes Mid Island from the case at bar, in my view. [ 74 ] The real issue in Mid Island was, absent any express noncompetition or even non-solicitation clause in the oral contract, should the court imply one to the effect that the defendant would not compete with the claimant after the sale of his business to it and would not solicit its former customers?: see paragraph 39. [ 75 ] In reliance on Trego v. Hunt , [1896] A.C. 7 (H.L.) , Mr.

Justice Joyce held that as the sale of the business in issue involved its goodwill, that a non-solicitation and not a noncompetition term or clause should be implied into the contract in issue.

He therefore held that the defendant, as a result of the sale, was precluded from soliciting its former customers but not precluded from returning to its former business or from accepting work from a former customer so long as the work did not result from a solicitation: see paragraph 51. [ 76 ] This case very clearly spells out the difference between a non-compete and non-solicitation clause and hence my comment above. [ 77 ] This case also proceeded with the court considering whether or not a breach of the implied term had occurred so as to entitle the plaintiff to an award of damages. Mr.

Justice Joyce said this on point at paragraph 69: 69 The obligation imposed on Simian as a result of the sale is not that it shall not deal in any way with those persons whose names appear on the customer list. It is only that Simian shall not solicit business from any customers on that list. To prove a breach of the implied covenant, Mid Island must provide evidence of solicitation resulting in the work being undertaken. Evidence that consists merely of the fact that work was done for someone on that list is not sufficient to prove its case.

Mid Island has not provided evidence to prove that Simian solicited former customers in breach of its obligation and has not established an entitlement to damages for breach of contract.

[ 78 ] Mid Island , then, is a case where the party seeking to rely upon the benefit of the implied term had performed its side of the bargain - the contract of purchase and sale of the defendant's business - and paid the purchase price, unlike the case at bar. [ 79 ] As a result of this case, and because both parties are agreed that part of the assets being purchased by the claimant included the goodwill associated with the defendant's Turf Logic customers, I do find that a term should and must be implied into the parties' contract as follows: that upon completion of the sale in question, the defendant will not thereafter solicit its former customers.

This is the only time after which such a term can reasonably operate. I believe this timeline, if you will, arises from Trego , above, where the defendant partners were enjoined from dealing with, or applying to any person who was a customer of the old firm on the date of the sale. [ 80 ] Mr. Justice Joyce did not in his reasons as far as I can see, spell out precisely the term to be implied and when it would operate.

In the result, I must consider whether the sale of the defendant's business ever completed so that the implied term would then and only then become operative. [ 81 ] I find on all the facts of this case that it did not. I have earlier implied a term (in the absence of an express one) into the June 30 agreement that the completion date on this agreement was October 1, 2010, some approximately 90 days after the contract was made. In my view, this is more than an ample and fair period of time for the parties to have performed their mutual obligations in their agreement.

What they should, of course, have done is retained a lawyer, and one only would do, to receive in trust the money, being the entire amount of purchase cash from the claimant, and a complete customer list from the defendant, and set a closing date as to when the money and list could be exchanged. Lawyers do this type of transaction regularly every day. They did not do so in this case because I suspect, on all the evidence of this case, all Mr.

Dion really wanted from the claimant was the defendant's customer list, and he had no intention, as future events show, in such event of thereafter paying all the agreed-upon consideration called for in the agreement to the defendant or to anyone. [ 82 ] Because the claimant failed to complete the June 30, 2010, agreement by paying the full agreed-on purchase price, I find the above implied term never became operative and bound the defendant in any way whatsoever. [ 83 ] If I am wrong in this analysis, I reach the same result on a different but similar track.

If the implied term was in effect and operative on June 30, 2010, the date of the main agreement, I am still of the view that the claimant needed to fully perform its obligations under this agreement and any agreement it made with the franchisor as a precondition or before it could expect the defendant to honour the implied non-solicitation term. [ 84 ] In any commercial contract, the purchase price is a significant and central term lying at the heart or root of the bargain and is central to the whole bargain itself.

Where it is not paid in full, and here most of it was not paid as required, a serious breach of the contract results. There is then, as here, a substantial or fundamental failure on the part of the claimant purchaser to perform. I find that such a breach occurred here on the part of the claimant. The defendant was the innocent party.

The breach went to the root of their bargain, and it was a term that I find the performance of which was essentially a precondition to the defendant being required to perform the obligations it had pursuant to the implied non-solicitation obligation. [ 85 ] The claimant's non-performance and breach of the payment requirements in the contract excuse the defendant from performance of his obligation.

He was entitled to repudiate his obligation and consider himself not to be bound by it under the circumstances of this case. [ 86 ] If I am wrong in this analysis, following Joyce J. in Mid Island at paragraph 69, I am far from satisfied that the claimant has established, even on the balance of probabilities, that a breach of this implied term occurred through the actions of the defendant. It is not enough, in my view, in light of the evidence from really all witnesses other than Mr.

Dion, to prove a breach by the mere fact that certain customers left the claimant and ended up with the defendant without any evidence at all that the October 8 email caused this to occur. This is really the inference, I think, that the claimant asks me to make, and I refuse to do so. There is no evidence any customer that the claimant bought ended up with Mr. Dudley in late 2010 or 2011 as a result of any solicitation he did. The evidence of the one customer called, Ms.

Annala, outlined above is to the contrary. [ 87 ] If I am wrong on this analysis, in my view, the claimant has completely failed to prove what monetary damages the court should award, assuming without finding that the defendant did breach an operative implied term not to solicit his former customers. [ 88 ] It is not up to the court to guess, speculate or even estimate what the claimed damages might be, absent, as in this case, any evidence at all as to the revenues and costs either party incurred, for example per customer, in the business in issue. [ 89 ] I have taken some time at the outset of these reasons to outline the void in evidence in this case on anything financial. [ 90 ] I reject the claimant's position that as a result of the defendant's actions, I should rescind the contract and return the money it paid to the defendant in July 2010, namely, $5,000 to the claimant.

In the circumstances of this case, it was the guilty party and is not entitled to rescission of the contract. [ 91 ] The Law of Contracts by S.M. Waddams, 4th ed., paragraphs 584-595, all of which I have carefully considered in reaching my decision, is on point. I also am of the view that the claimant's hands on this matter are far from clean. [ 92 ] I turn now to the claimant's claim for $10,000 damages for an intentional and tortious interference with the claimant's commercial interests.

Clearly, the claimant points to the defendant's October 8 2010 email to all its customers as the root problem and cause with respect to this claim. This letter was sent out seven days after the completion date. The claimant does not make it clear what commercial interests it then had vis-à-vis the defendant which the defendant thereby interfered with.

On October 8, it was in breach of the contract it had made with the defendant by not paying the whole purchase price on the completion date. [ 93 ] On the facts of this case, and having been provided with no binding legal authority to the contrary, I am at a loss to see what commercial interest the claimant had on October 8, 2010, that the defendant interfered with. I note that I have above rejected Mr. Dion's view of the June 30 agreement that once the $5,000 was paid to the defendant by the claimant, the claimant had thereby then purchased

the complete customer list. [ 94 ] I have already found that the defendant was never bound by an oral or written noncompetition term for the benefit of the claimant nor by an implied term not to solicit customers. I have found that after September 30, the defendant was not bound by obligations under the contract made June 30, 2010. I also find that thereafter the claimant, to put the matter simply, had not paid the full and bargained for price for the defendant's customers, any of them.

Insofar as it is asserting that it had a lawful and perhaps exclusive right to deal with and trade with any of the defendant's former customers after October 1, 2010, and that its commercial interest then involved such a right, I reject this thesis for the reasons set out above. [ 95 ] My finding might be quite different if the claimant had paid all consideration due in the contract of June 30, 2010, by October 1 and had, as of that date, as in Mid Island , performed its side of the bargain.

This in essence, would mean it had paid the full price for the 75 customers and all goodwill associated with the business. [ 96 ] I find that the defendant did not interfere with any business or commercial interest the claimant had or owned on or after October 1, 2010. [ 97 ] In any event, as to the tort in issue, for the reasons very persuasively advanced by Mr. Backhouse, counsel for the defendant, I find a breach of the same has not been established on the balance of probabilities by the claimant, all questions of damages aside. [ 98 ] The requirements of this tort are threefold: (

a) an intention to injure the claimant's economic interests; (

b) an interference in those interests by illegal or unlawful means; and (

c) a resulting economic harm. [ 99 ] Assuming without finding that the claimant had an economic interest on October 8, did Mr. Dudley act in such as way so as to intend to injure it? I agree with Mr. Backhouse's submission on point that the intent of the October 8 letter was to inform his former customers of the sale, provide Get Green contact information to them, apologize for confusion, and thank them for their past business. I accept that Mr.

Dudley's intent in the two sentences emphasized above was to respond to customer complaints and give an explanation for the delay and any deficiencies in service and not to injure the claimant or its business. [ 100 ] This claim must therefore fail for this reason alone, namely, that one requirement of the tort or wrong in issue is not made out in the evidence by the claimant. I will deal nonetheless with the remaining two elements. [ 101 ] Assuming without finding that Mr.

Dudley's October 8 email could be described as an interference, about which I have considerable doubt, was it done by unlawful or illegal means? If an unlawful act means "an act that the defendant is not at liberty to commit," I would note the defendant was not on October 8 bound by anything preventing Mr. Dudley on its behalf from contacting his former customers, for example, a noncompetition clause in favour of Turf Logic Inc. who, two days earlier, had settled with him and released him. I do not agree that his October 8 email can be correctly described as

an act that the defendant was not at liberty to commit. [ 102 ] Was it

an act within the narrow definition as per OBG Ltd. v. Allan , [2007] UKHL 21 , adopted in the TimberWest decision, 2012 BCSC 597 , by the Ontario Court of Appeal at paragraph 33 and following, namely, that under the narrow definition,

an act is unlawful only if it interferes with the freedom of a third party in a way which would be actionable by the third party had that third party suffered a loss? This is what counsel for the defendant refers to as the " OBG Test." This test is difficult to apply on the facts of the case at bar. It is difficult to see how the October 8 letter can be seen to be such an interference. [ 103 ] I have read Mr. Dudley's letter of October 8 a number of times.

In my view, it cannot be seen on a fair construction to be an attempt to solicit the business of former customers or an attempt to cause problems for the claimant by interfering with his business. On the contrary, it states that Mr. Dudley is hopeful that Mr. Snow, for Get Green Landscapes, will work hard and fulfil their contracts. This sentence is, I think, supportive of the work the claimant was to do. I do not find this letter was sent by Mr. Dudley in bad faith. Rather, I find that he sent it in good faith. [ 104 ] It is important that I state in these reasons that I found Mr.

Dudley to be an honest, honourable person who seemed to want to do the right thing by his customers when he had decided to go up north. I was very much less impressed by Mr. Dion, who seemed, based on all the evidence, intent on somehow using the June 30 agreement to extract a bigger, wider deal from Turf Logic Inc. regardless of Mr. Dudley's interests and rights. His view that he paid $5,000 for all the defendant's customers is frankly nonsense in my view. [ 105 ] I find the claimant has failed to establish the second element of the tort in issue.

Its claim fails for this further reason. [ 106 ] As to the third element - resulting economic harm - I agree with Mr. Backhouse's closing argument that no evidence was led by the claimant or otherwise exists to establish a necessary causal link between this October 8 letter and any resulting economic harm the claimant alleges; in particular, that certain former Turf Logic customers did not renew with it in 2011. I agree that the fact of nonrenewal itself is, as in Mid Island , not sufficient proof of loss.

Based on all the evidence in this case and, in particular, that one customer called by the defendant (and not the claimant who bears the onus of proof) I agree with the proposition that likely the claimant was the author of its own misfortune in that it failed to provide timely service to many of the customers. [ 107 ] If a portion of the customer list was late in coming to it, that is because it failed to pay for it in a timely way and hence any delay in servicing those customers is solely its own fault and responsibility. As well, based on my above findings, Mr.

Dudley was under no obligation to perform his side of the bargain and deliver the second list at all. When he did so, it was purely a voluntary, gratuitous act on his part, nothing more. [ 108 ] Finally, I find the claimant has failed to prove any damages regardless of my findings on elements one and two of the alleged tort and certainly not the $10,000 claimed.

This claim is dismissed as are all other claims the claimant has advanced in this action against the defendant. [ 109 ] The defendant will recover its costs under Rule 20(2) of the rules of this court, which will include all reasonable costs associated with Mr. Corey's return travel to North Vancouver from Barrie and attendance to testify at trial in British Columbia in the event the

defendant has paid such costs or agreed with Mr. Corey to be responsible for them. In light of the claims advanced by the claimant, I find he was a necessary witness. If the parties are unable to agree on the costs payable by the claimant to the defendant, the same will be finalized by a registrar of this court in a manner he or she shall direct pursuant to Rule 20(4). [ 110 ] Those are my reasons. (REASONS CONCLUDED) CORRIGENDUM – Released December 19, 2013 [1] Further to the Reasons for Judgment filed September 20, 2013, the title page is hereby amended to correct the spelling of Development (initially incorrectly spelled as Decelopment). [2] My Reasons for Judgment are hereby amended.