Super Save Disposal Inc. v. Chera Sweets Date:, 2013 BCPC 268

Citation: Super Save Disposal Inc. v. Chera Sweets Date: 20130611 2013 BCPC 0268 File No: 12-41237 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SUPER SAVE DISPOSAL INC. CLAIMANT AND: CHERA SWEETS LTD. DEFENDANT REASONS FOR JUDGMENT OF HIS WORSHIP L.A. KAHN Counsel for the Claimant: J. Kitsul Counsel for the Defendant: J. Jachimowicz

Place of Hearing: Vancouver , B.C. Date of Hearing: April 17, 2013 Date of Judgment: June 11, 2013 Background [ 1 ] This case concerns a contract for waste disposal services provided by Super Save Disposal Inc. (“Super Save”) for Chera Sweets (“Chera”). The background that led to the dispute between the parties is confusing. Neither of the Trial Statements submitted on behalf of the parties, nor their witnesses, clearly explained the circumstances that led to the dispute as a result of contractual arrangements between the parties. [ 2 ] The following occurred: (

a) Chera entered into a contract with Northwest Waste Solutions (“Northwest”) on December 8, 2004 for a one-year term. The contract with Northwest renewed for successive one-year terms through 2011. (

b) On February 25, 2011, Chera and Super Save entered into a one-year contract for waste disposal services to commence on March 25, 2011. (

c) On February 25, 2011, Super Save drafted a letter to Northwest which was signed by Surinder Chera to provide Northwest with notice of the cancellation of its contract with Northwest effective March 25, 2011. Jennifer Jordison (“Ms. Jordison”), who testified on behalf of Super Save, explained that the salesperson responsible for sending notice to Northwest would have had Surinder Chera sign the letter dated February 25, 2011. (

d) When the contract between Super Save and Chera was signed Super Save was not aware of the terms of the contract with Northwest, although the evidence on behalf of the Defendant, primarily Surinder Chera, indicated that the Super Save salesman was shown a copy of the Northwest contract. (

e) Ms. Jordison testified it was not until November 2011 that Super Save became aware that the Northwest contract ended in March 2012. (

f) On or about March 25, 2011, Super Save delivered the waste disposal bin to Chera as was required under the contract. (

g) It was not until several months later that Super Save learned that the Chera and Northwest contract was still in force and, as a result, removed its bin from the Defendant’s premises on or about October 18, 2011. At that time, Chera advised Super Save that the contract with Northwest ended on March 14, 2012. (

h) The Northwest and Chera contract, which was included in the Defendant’s Trial Statement, provided that the effective date for service commenced on January 5, 2005. There was no evidence provided by the Defendant explaining any change to the annual date that the contract would end. (

i) After learning of the Northwest contract, Super Save credited Chera all of the charges between March and November 2012. (

j) On or about March 14, 2012, Super Save delivered another waste disposal bin to Chera’s premises and service commenced shortly thereafter. (

k) On or about March 27, 2012, Northwest entered into a new contract with Chera to commence on April 1, 2012. (

l) On May 31, 2012, Mark O’Hara, Sales Manager for Northwest wrote a letter to Chera, as follows: Thank you for continuing to choose Northwest Waste Solutions Inc. as your waste removal company. Attached is a copy of your service agreement to keep for your records. As one of the oldest locally owned and operated waste service companies in BC we appreciate your business. If you have any question or concerns that need addressing please contact Customer Service at your earliest convenience at 604-539-1900 ext: 315. Yours truly, Per: Mark O’Hara Sales Manager (

m) On or about August 16, 2012, Super Save removed its bin from Chera’s premises, because Chera had advised Super Save that they were in a contract relationship with Northwest.

Discussion [ 3 ] Super Save’s claim is for liquidated damages being the monthly cost for waste disposal services for the term of the contract, being $72.05 x 12 months = $864.60, plus HST of $103.75, totalling $968.35, together with filing fees of $100 and service fees of $80. [ 4 ] Ms. Jordison testified that Super Save did not receive any correspondence from Northwest to advise Super Save of the existing contract between Chera and Northwest. [ 5 ] It was not until June 2012 that Ms.

Jackie Hartmann, the retention manager for Northwest sent a letter to Super Save to advise there was an agreement between Northwest and Chera. Super Save removed its bin on August 16, 2012, which I infer is a result of the correspondence from Northwest. [ 6 ] The Defendant led no evidence to explain why a new agreement was made between Northwest and Chera. [ 7 ] On June 12, 2012, Chris Parsons, on behalf of Super Save, wrote to Chera as follows: Dear Surinder Chera You signed a Service Agreement with Super Save Disposal on February 25, 2011. The Service Agreement has an original start date of March 25, 2011.

We originally sent a watse (sic) bin to your location but we had to pull the bin due to a pre-existing contract with Northwest Waste Solutions. We re-delivered the bins again on March 14, 2012 (to honor the old agreement you have with the other waste company) and have now received a letter from Northwest Waste Solutions suggesting we have delivered the bins without consent from you. We sent a valid cancellation letter to the other hauler per your request to cancel services with them.

If you do not provide us with proof that you have re-newed your contract with Northwest Waste Solutions, we will be forced to take action to remedy this matter. Please provide us with a copy of the “Re-newed Contract” with Northwest Waste Solutions and within 10 week days or by June 26, 2012 in order to avoid us filing a breach on your behalf for not honouring our Service Agreement. We remain committed to providing you with a high level of service at competitive pricing. Please contact us should you require clarification or more information.

Yours Truly, Chris Parson Sales and Retention Tel: 604-533-4423 [ 8 ] Surinder Chera testified that her brother, Neelam Chera, was responsible for the paper work for the business.

Neelam Chera testified that he tried to contact Super Save on several occasions and talked with different individuals on each occasion. [ 9 ] I conclude that Chera entered into a contract with Super Save because the cost offered by Super Save was considerably less than what Chera was paying Northwest. [ 10 ] Chera was paying Northwest approximately $200 per month, whereas Super Save was willing to provide the same or similar service for $75 per month. [ 11 ] I was not impressed with the evidence provided by Surinder and Neelam Chera.

Their evidence, particularly that of Neelam Chera’s, was self-serving and an attempt to shift the responsibility for the difficulties to Super Save, rather than acknowledging the Defendants wished to reduce their expenses by contracting with Super Save and terminating the contract with Northwest. [ 12 ] I have concluded that Super Save sent the letter dated February 21, 2011 in good faith to Northwest to terminate its contract according to the terms of the contract between Northwest and Chera.

Super Save could not have known as at the February 25, 2011 letter whether or not notice had been given properly by Chera to Northwest. [ 13 ] However, Super Save and Northwest appear regularly in the Provincial Court (Small Claims division). The issues that arise under their contracts have been before me and other adjudicators of this Court on numerous occasions.

I take judicial notice that Super Save and Northwest are sophisticated litigants and am well versed about the terms of each other’s contracts. [ 14 ] Therefore, it should not have been a surprise to Super Save that they needed to see a copy of the Northwest and Chera contract to know whether or not notice had been delivered according to the terms of the contract, namely: TERM.

This Agreement is for a term commencing on the date hereof and continuing until sixty months after the date service begins (the “Renewal Date”) and will be renewed for successive sixty month terms without further action by the parties unless terminated by

Northwest upon 30 days written notice to the Customer or by the Customer (after satisfying its obligation under the “right to re- negotiate” clause) providing to Northwest written notice by registered mail received not more than 120 days and not less than 90 days prior to any Renewal Date … RIGHT TO RE-NEGOTIATE. … Northwest is hereby granted the right of first refusal to provide the Services to Customer upon the expiration of the Term of this Agreement and upon the same terms and conditions comprised in the Offer and may notify Customer of its intention to provide Services on the terms of the Offer at the expiration of the then current Term of this Agreement by notice in writing to Customer not less than 30 days after receipt of a full and complete copy of the Offer by Northwest… [ 15 ] No satisfactory explanation was given by Super Save why they did not obtain a copy of the contract. [ 16 ] As well, there was no explanation why Northwest entered into the March 2012 contract with Chera, unless Northwest had accepted the letter dated February 25, 2011 was valid notice of Chera’s termination of the December 2004 contract or any renewals under it.

Otherwise, there would have been no reason for Chera and Northwest to enter into a new agreement, as no “new” agreement was necessary as a result of the annual renewals of the December 2004 agreement with price adjustments. [ 17 ] I conclude that Northwest convinced Chera to continue using Northwest as their waste disposal company, because they “matched” the Super Save contract. [ 18 ] On two occasions Super Save delivered waste disposal bin to the Defendant’s premises. On the first occasion which I have described above, Super Save removed the bin and cancelled any charges that had been incurred.

On the second occasion, Super Save delivered the bin because the contract between Northwest and Chera had been terminated by Chera. [ 19 ] As noted above, there was no evidence to explain the new contract between the Defendant and Northwest or any reasonable explanation why Chera, upon the delivery of the Super Save bin in March 2012 did not immediately object to Super Save having done so. I conclude that Chera welcomed the contract with Super Save because of the lesser cost for them. Liquidated Damages or Penalty [ 20 ] Mr. Kitsul referred me to Super Save Disposal Inc. v.

Tristar Cap & Garment Ltd. (Richmond Registry No. 24237, April 10, 2013), a decision by my colleague, Adjudicator Wallace.

Although there was a discussion at paragraph 4 of the Judgment regarding the timing of the notice, it does not relieve the Defendant of their contractual obligations arising from the contract between Super Save and Chera. [ 21 ] I agree with Adjudicator Wallace at paragraphs 9 and 10, as follows: “[9] Further, by renewing its contract with Northwest, the Defendant breached the express term of the contract that “the Customer (1) shall not enter into any other new third party contract and (2) shall not renew any then current third party contract.” [10] It is clear from my foregoing conclusion that I do not accept the Defendant’s submission that because the Effective Date had not yet passed, the contract did not create enforceable rights and obligations.

It is true that some rights and obligations do not arise until the Effective Date, but the contract clearly intends to create others as of the date it is executed. The opening words in the term at issue, “The Customer further acknowledges and agrees that pending the Effective Date of this Agreement”, make it clear that the Defendant’s obligation not to contract with a competitor commences when the contract is executed.” [ 22 ] Based on the

summary of the evidence I have set out above, I conclude that Chera breached their contract with Super Save. [ 23 ] Is the claim by Super Save a genuine pre-estimate of damages, which is commonly referred to as liquidated damages, or is it a penalty? [ 24 ] In Housewise Construction Ltd. dba Segal Disposal v. Sun Sushi Restaurant Ltd. (Vancouver Registry File No. 1242020, April 17, 2013), there is an extensive review of the principles of liquidated damages vs. penalty set out in paragraphs 12 and 13.

As well, Adjudicator Yule reviewed various decisions at paragraphs 16 to 23. [ 25 ] The facts in the case at bar are different than in Super Save Disposal Inc. v. Northwest Solutions Inc. and Craftsman Millwork and Design Ltd. ( 2012 BCPC 42 ).

In Craftsman , I awarded 3 months of rental as damages, rather than the entire amount owing under the contract. [ 26 ] This is a case analogous to the reasoning adopted by my colleague, Adjudicator Yule, to the effect that if a contract is short term, the more likely the entire outstanding balance will be a genuine pre-estimate of damages, i.e. liquidated damages, and not a penalty. [ 27 ] However, as Super Save did not obtain the Northwest contract, and therefore, become aware of the period when notice should have been delivered, I am of the opinion the costs of the entire contract are a penalty. [ 28 ] Accordingly, I fix the damages at $72.05 monthly charge for 8 months = $576.40 plus HST of $69.17, for a total of $645.57.

Super Save will be entitled to pre-judgment interest from March 14, 2012 to the date of this judgment, together with filing fees of $100 and service fees of $80.

__________________________ Lawrence A. Kahn