Red Spade Ent Ltd. v. Hunter and, 2018 BCPC 115

Citation: Red Spade Ent Ltd. v. Hunter and 1021647 B.C. Ltd. 2018 BCPC 115 Date: 20180511 File No: 1750805 Registry: Prince George IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: RED SPADE ENT LTD. CLAIMANT AND: CLINTON FRANK HUNTER dba. TWO RIVERS TRANSPORT and 1021647 B.C. LTD. DEFENDANTS REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE C. MALFAIR Appearing for the Claimant: Jesse Cody Appearing on his own behalf: Clinton Hunter Appearing for the Defendant, 1021647 B.C. Ltd. : Clinton Hunter and Veronica Hunter Place of Hearing: Prince George , B.C.

Dates of Hearing: November 29 and 30, 2017, January 25 and 26, February 13, April 5, 2018 Date of Judgment: May 11, 2018 Introduction [ 1 ] This is a claim by Red Spade Enterprises Ltd. for damages arising from an alleged breach of contract with the Defendants

Clinton Hunter, doing business as Two Rivers Transport, and his corporate successor, 1021647 B.C. Ltd. The Defendants and Claimant worked together from the fall of 2014 until November 15, 2015 in connection with a courier and delivery service. The Defendant provided dispatching services and the corporate Claimant provided a truck and driver for the purpose of delivering goods in the Prince George, Vanderhoof and Fort St. James areas. [ 2 ] The Defendant, Clinton Hunter, initially carried on business in the last quarter of 2014 as a sole proprietor and dealt with the corporate Claimant in that capacity.

In January, 2015 Mr. Hunter and his wife Veronica Hunter incorporated the Two Rivers transport business under the corporate Defendant, 1021647 B.C. Ltd. That corporate Defendant is now insolvent. Mr. Hunter says the Claimant had ample notice of the incorporation and was knowingly contracted to the corporate Defendant during the entire time period of the Claim, being January to October, 2015, and seeks dismissal of the claim against Mr. Hunter personally. [ 3 ] Except where otherwise specified, for the purpose of these reasons I have referred to “Defendant” in the singular to refer to both Mr.

Hunter personally and the corporate Defendant for ease of convenience. [ 4 ] The undisputed financial arrangement between the parties was that the Claimant would receive 75% and the Defendant would receive 25% of amounts charged to customers for deliveries. The Claimant would receive 100% of all amounts billed to customers as fuel surcharges.

The Claimant would provide the truck and driver to effect the deliveries as an “owner-operator,” while the Defendant generally provided all dispatching, invoicing and administrative support services. [ 5 ] The parties agreed customers would generally be billed in accordance with a pre-determined rate sheet setting out the costs for deliveries based on weights and distances. The Claimant contends the Defendants breached this agreement by undercharging customers for delivery which accordingly reduced the Claimant’s 75% share of the billings.

There is no suggestion the Defendant failed to pay the full 75% of billings to the Claimant, rather, the Claimant complains the Defendant’s invoices to customers were lower than the agreed rate sheet prices. There is no dispute the Claimant did receive 100% of the fuel surcharge amounts as agreed. [ 6 ] The main invoices which are the subject of complaint can be generally characterized as relating to deliveries for high volume goods or specific high volume customers.

The Defendant argues it would have been grossly uncompetitive to charge these customers the courier rates set out on the rate sheet and that the Defendant negotiated the best rates it could for these deliveries pursuant to the arrangement between the Defendant and the Claimant.

The Defendant also asserts the Claimant failed to complain during the relevant time period and the Defendant acted in reliance upon the Claimant’s apparent acquiescence to this arrangement. [ 7 ] The Claimant originally sought $15,246.21 for alleged short billings on hundreds of deliveries invoiced between January 31, 2015 and November 15, 2015. Mid-trial the Defendant explained, and the Claimant accepted, that a portion of this claim was in fact already paid to the Claimant on each cheque characterized as “vacation pay” in accordance with special labour rules pertaining to owner- operators.

Some other amounts had also been paid in full. The final amount sought by the Claimant after mid-trial adjustments is $10,245.55 plus filing and service fees.

Issues [ 8 ] The issues I must decide are: 1) What was the agreement, if any, between the parties concerning billing and compensation? 2) Did the Defendant breach that agreement by underbilling customers? 3) Is the Claimant disentitled to relief based on the defence of acquiescence or estoppel? 4) If there was no agreement as to how high volume customers or heavy goods would be billed, is the Claimant entitled to relief in contractual quantum meriut? 5) If the Claimant is entitled to relief, how much should it be paid? 6) If the Claimant is entitled to relief, which of the Defendants is liable for payment?

Issue #1: What was the agreement, if any, between the parties concerning billing and compensation? [ 9 ] The principal of the Claimant, Jesse Cody, came to know the principal of the corporate Defendant, Clinton Hunter, when Mr. Cody worked for industries that used Mr. Hunter’s courier services. Mr. Cody became aware Mr. Hunter had started his own courier business under the sole proprietorship “Two Rivers Transport” in late 2014 which offered local delivery services in the Prince George and surrounding areas for industrial freight. Mr. Cody had sourced some funds and decided to open his own business.

In the winter of 2014 Mr. Cody approached Mr. Hunter about buying into Mr. Hunter’s company as a partner, but ultimately decided to instead purchase his own commercial vehicle, incorporate his own company and contract to Mr. Hunter’s company as an owner-operator. [ 10 ] At that time Mr. Cody and Mr. Hunter discussed their business and financial arrangement. They determined what routes the Claimant would control, how business responsibilities would be allocated between the parties and how they would share compensation.

It was agreed the Claimant would provide a regular run between Prince George and Vanderhoof and Fort St. James, typically collecting and delivering multiple items between those communities on a regularly scheduled route using the Claimant’s five tonne truck. The Defendant would manage the office, take requests for service, provide quotes, dispatch the Claimant, bill customers and pay the Claimant for deliveries. The Defendant also provided the National Safety Code number.

The parties settled on compensation in accordance with the prevailing industry standard in which the owner-operator gets 75% of amounts billed to customers for the delivery and 100% of all fuel surcharges billed to customers incidental to those deliveries. The remaining 25% of amounts billed to customers for deliveries would go the “house,” or the Defendant, for its administrative support and dispatching services. [ 11 ] The main point of contention between the parties is the terms of their agreement about charging customers. It is agreed that

customers were generally billed in accordance with a “rate sheet” which Mr. Cody says was shown to him in 2014 when he opened discussions with Mr. Hunter. The rate sheet which is the subject of these proceedings was sent from Mr. Hunter to Mr. Cody on January 13, 2015 and was widely distributed to customers by both parties in the course of business. In a series of text messages between the parties in April, 2015, Mr. Cody asked, and Mr.

Hunter confirmed, that the fuel surcharge was 16 % added to the “total amount billed to the customer based off the rates in the [rate sheet].” [ 12 ] The rate sheet is a simple one page, one sided document comprised of two sections. There is an untitled table with three columns entitled “Weight (lbs); “Vanderhoof” and “Fort St. James” with 11 rows indicating fixed pricing for items increasing in 10 pound increments up to 100 pounds. The last row attributes pricing to items weighing “100+” lbs as being “$15 + $0.075/lb” for deliveries to Vanderhoof and “$20 + $0.075/lb” for deliveries to Fort St. James.

I will refer to these as “courier rates.” On the same page there is a second table called “Hot Shot Service from Prince George” which provides a rate per loaded kilometre starting at 1 tonne upwards to 57,000 lbs. The rates differ slightly based on the type of vehicle used for the delivery. I will refer to these as “hot shot rates.” [ 13 ] A hot shot was a premium delivery service in which a customer’s goods were picked up in a vehicle dispatched by the Defendant and shipped directly to the destination with no other stops. The Claimant did not generally provide hot shot service.

The Claimant ran a route akin to a postal service, loading its vehicle with multiple items from multiple customers and making multiple deliveries in a regularly scheduled route. This was a less valuable service to customers than hot shot service due to delays in delivery times associated with the multiple delivery service model.

Courier service was more lucrative to the parties than hot shot service because the aggregate amounts charged to customers for multiple smaller items was generally higher than the amounts charged for a single high weight delivery in a hot shot. [ 14 ] The main disagreement between the parties was the amount of discretion available to the Defendant in negotiating rates with customers. The Claimant says the arrangement between it and the Defendant was that all deliveries carried out by the Claimant would be billed at the courier rates, with heavier freight (100+lbs) being billed at the $15 or $20 plus 0.075/lb.

The Defendant says that as the dispatcher the Claimant allocated the Defendant the responsibility of pricing and providing quotes to customers, and there was a limit to what could be reasonably charged under the courier rates.

The Defendant says because the parties shared billings they had a mutual interest in maximizing the amounts charged to customers, but the Defendant could not charge amounts that were infeasible and uncompetitive. [ 15 ] It is not contested that once a customer’s goods reached a certain weight or volume the ordinary courier rates ($15 or $20 plus $0.075/lb) became more expensive than the hot shot rate. The Defendant says customers would not pay more than the hot shot rate for those kinds of deliveries because it was uneconomic - there was no value to paying more for a less convenient service.

The Defendant says at a certain point it would be cheaper for these industrial customers to use their own trucks to move goods or hire a competitor. [ 16 ] Notwithstanding the Claimant was not providing hot shot service, the Defendant would offer lower rates to customers where the courier price would exceed the premium hot shot delivery price. The Claimant says it did not agree the Defendant could charge customers anything other the courier rates notwithstanding the economics of that pricing for high volume customers. [ 17 ] Mr. Cody met with potential customers in Vanderhoof and Fort St.

James and provided the rates sheets in a mutual effort to increase business in those areas and build up a regular route and customer base. A few larger industrial customers emerged in those areas, for which the Claimant provided frequent high volume deliveries in conjunction with the Claimant’s regular courier route commencing in February, 2015. The Claimant added three runs a week to Canfor plateau to deliver goods to that mill and did regular runs for Overland. [ 18 ] There was no written contract between the parties.

As such, I must consider what the parties said and did and assess objectively whether, in context, their words and actions establish an intention to be bound. In order to determine whether a binding contract was created I may consider both the parties' conduct leading up to and following conclusion of the alleged agreement ( Le Soleil Hotel & Suites Ltd. v. Le Soleil Management Inc. , 2009 BCSC 1303 at para. 328 ). [ 19 ] Mr. Cody says he provided the larger industrial customers with copies of the rate sheet and told these customers they would be billed in accordance with that rate sheet. There is no evidence Mr.

Cody ever told customers they would only be billed from the courier price table and not the hot shot table which are contained on the same document. I accept Mr. Hunter’s evidence that he told Mr. Cody there were limitations on how much he could charge customers for large volume deliveries and Mr. Cody never specifically challenged or questioned the Defendant’s pricing practices with customers during the 10 months their business arrangement was in effect.

I find, on the evidence of both parties, that the Claimant effectively relied on the Defendant to quote, charge, and collect from customers. [ 20 ] I find there was an agreement that the Defendant was responsible for negotiating rates with customers and that those rates would generally accord with the rate sheet. [ 21 ] As outlined above, the rate sheet contained two tables - one for courier rates and one for hot shot rates. It is clear from the rate sheet that small items weighing under or near 100 lbs were treated and priced differently than heavy items in the thousands of pounds.

I find both the courier rate table and hot shot rate table made up the “rate sheet,” not just the one courier table relied upon by the Claimant. Further, I find that the rate sheet quantified pricing for deliveries based primarily on weight and distance, not the type of service being offered.

It is not apparent from the rate sheet that the courier table relied upon by the Claimant exclusively addressed pricing for deliveries made by the Claimant in the Claimant’s five tonne truck regardless of the applicable weight or distance. [ 22 ] Because the parties’ compensation arrangement was a function of what was billed to customers, it is relevant to consider what the parties reasonably expected customers would pay for deliveries.

In my view, any customer reviewing the rate sheet seeking delivery of goods over 100 lbs would reasonably expect to pay the most economic shipping rate by reference to both pricing tables. A customer would not assume that if the goods were being shipped in the Claimant’s truck on his courier route, as opposed to being shipped directly on a hot shot delivery truck that they would have to pay higher delivery rates. There is no evidence Mr. Cody ever told the customers on his route that they would only ever be billed from the courier table off the rate sheet regardless of the weight or volume of their delivery. Mr.

Cody suggests that customers would expect to pay higher rates for having their goods delivered in a protected five tonne truck as

opposed to an uncovered flat deck; however, the rate sheet expressly contemplates hot shot rates were available for deliveries made in a five tonne truck. [ 23 ] I find it would have been unreasonable for the Defendant to charge customers more for the Claimant’s “milk-run” delivery than for a premium direct delivery. For example, if the Defendant were to charge a customer regular courier rates for a 5000 lb delivery to Vanderhoof it would cost $390 ($15 plus $0.075/lb) for delayed delivery on the Claimant’s truck.

By contrast, the Defendant could dispatch a five tonne truck to the customer directly as a hot shot for direct pickup and direct delivery for $210 (100 km at $2.10), almost half the courier price. I accept the Defendant’s evidence that if customers were charged the higher courier rate for the Claimant’s truck they would either hire the competition or, for industrial clients, just ship the goods on their own trucks.

I accept that customers were not inclined to pay a lot more for a slower delivery service, and that when quoting customers for large volume deliveries the Defendant was constrained by the availability of hot shot rates.

Issue #2: did the Defendant breach that agreement by underbilling customers? [ 24 ] As stated above, I find that while the Claimant allocated responsibility for negotiating rates with customers to the Defendant as the dispatcher, the Defendant’s discretion was limited to charging customers in reference to the rate sheet, which I have found to comprise both pricing tables. [ 25 ] Many of the allegedly underpriced waybills of meaningful size relied on by the Claimant related to a small pool of specific customers (Inland Kenworth, Overland, Van Kam, James Western Star, Acklands, and Canfor) or to deliveries exceeding 1000 lbs.

In the specific examples of alleged under-pricing put to Mr. Hunter in cross-examination, Mr. Hunter demonstrated that the customer was in fact charged the equivalent or more than a hot shot rate for delivery based on the rate sheet. [ 26 ] With respect to multiple small amounts allegedly underpaid to the Claimant, many of which are claimed at $0.28, I am not persuaded the Claimant has met its onus.

Although the Claimant has made great efforts to account for all of the alleged payment and billing discrepancies, there have been errors in its accounting which raises concerns about the reliability of the calculations of these smaller amounts. The Claimant’s original claim assumed almost every waybill submitted to the Defendant in the relevant time period was underpaid, which the Claimant had to significantly correct once it was pointed out the amounts were paid under a different heading on each cheque.

The Defendant was also able to show that some of the waybills claimed by the Claimant as unpaid were in fact paid. The Claimant’s records have not been prepared by an accounting professional which might increase the reliability of the calculations. While the amounts claimed in respect of large volume waybills are capable of meaningful review and assessment, I am not satisfied the Claimant has met its evidentiary onus with respect to the myriad of small amounts it claims were underpaid for deliveries typically under 100 lbs. [ 27 ] I accept the evidence of Mr.

Hunter that he and the Claimant agreed that while they wanted their delivery business to be competitive, they did not want to be the “cheapest in town.” I also accept that in his customer negotiations Mr. Hunter tried to maximize the value of his quotes and used the hot shot rates as the reference point for large volume deliveries. I also accept Mr.

Hunter’s evidence that he was told by customers that if he exceeded a certain price ceiling they would not use his service, which would be to the detriment of both parties as this would result in the Claimant expending time and fuel driving a partially empty truck instead of a full one. [ 28 ] Although the Claimant did not provide premium hot shot service, the Defendant would often direct high volume goods to the Claimant instead of dispatching hot shots to other drivers as a favour to the Claimant. Because the Claimant performed a regular courier run, it had to drive to Vanderhoof or Ft. St.

James and make deliveries regardless of how much freight was in its truck. These routes consumed a base level of fuel, mileage, and driver hours regardless of how “full” the Claimant’s truck was. Because of these fixed costs, the Claimant made more money driving a full truck than a half empty one as the former maximized the amount the Claimant could bill out for a day’s deliveries. [ 29 ] There was no economic advantage to the Defendant dispatching hot shot qualifying deliveries to the Claimant instead of other drivers.

The Defendant charged a rate consistent with a hot shot rate as agreed to by the customer and was paid 25% of that delivery regardless of whose truck delivered the freight. I find the Defendant was acting for the Claimant’s benefit in getting customers to pay a hot shot rate for deliveries on the Claimant’s truck even though they were not receiving that premium hot shot service. I accept that the Defendant was effectively trying to throw some extra work to the Claimant to help out Mr. Cody by trying to fill the Claimant’s truck as much as possible. [ 30 ] I also accept the evidence of Mr. and Mrs. Hunter that Mr.

Cody routinely turned in waybills late which could result in customers being billed less than rate sheet amounts. Mr. Hunter often quoted customers prices based on an estimation of weight and distance in advance of delivery, and dispatched deliveries to Mr. Cody based on the customer’s agreement to the quoted price. Sometimes the final volumes or distances departed from what was originally reported by the customer. When Mr. Cody turned in waybills late, it precluded the Defendant from adjusting the customer’s bill upwards as the delivery was already charged out.

I find that departure from the rate sheet, in those circumstances, arose from the Claimant’s lack of timeliness in submitting the waybills despite repeated demands by both Mr. and Mrs. Hunter. [ 31 ] I find that the Claimant did allocate responsibility for negotiating rates with customers based off both tables in the rate sheet. I do not find the Claimant’s evidence compelling that he believed the hot shot rates did not apply to him because he was not doing hot shots. I accept Mr. Hunter’s evidence that he told Mr. Cody that there was only so much he could reasonably charge customers.

The parties shared the revenues and had a mutual shared interest in maximizing customer billings. The Defendant had no reason to underbill customers which would directly affect its own bottom line. I accept that the Defendant did endeavour to charge as much as it could for deliveries without being so uncompetitive that it lost business and customers. [ 32 ] I find the Defendant did not breach its agreement with the Claimant by under charging customers for deliveries.

Issue #3 Is the Claimant disentitled to relief based on the defence of acquiescence or estoppel? [ 33 ] If I am wrong, and the Defendant did breach its agreement with the Claimant by charging customers less for deliveries than

amounts agreed to between the parties, I find the Claimant is estopped from now asserting that alleged breach and the Defendant mayrely on the defence of acquiescence as a shield to liability for damages sought by the Claimant. [34] Pursuant to the arrangement between the parties, the Claimant was to submit waybills for all of its deliveries indicating thecustomer, pick up and drop off locations, and weight of goods transported. The Defendant would use this information to bill customersand to calculate the Claimant’s pay, being 75% of the amount billed to the customer.

The Defendant would pay that 75% to the Claimantin the upcoming pay period whether or not the customer had yet paid the Defendant and in that sense fronted the share of revenuespayable to the Claimant. The Claimant was paid semi-monthly and each cheque was accompanied by a detailed ledger setting out thedetails of each delivery paid in the cheque including order number, pickup customer, delivery customer, waybill number, and the valueof the Claimant’s share of billings. The Defendant relied on the provision of delivery waybills from the Claimant to calculate amountspayable and bill the customers. [35] Mr.

Cody says he became suspicious about whether Mr. Hunter was paying him in good faith when he went on vacation in2014 and Mr. Hunter arranged for another driver to use the Claimant’s truck to continue the deliveries during his absence. The pay forthat time period was below the Claimant’s expectations, although the Defendant alleges the Claimant failed to take into account theamount the Defendant had to pay the driver. Nonetheless this event prompted the Claimant to start keeping meticulous records of all hisdeliveries by taking a photograph of every waybill he submitted for payment on Mr.

Hunter’s desk as proof of delivery of each waybill tothe Defendant. [36] Mr. Hunter says the Claimant was often late submitting his waybills and this was an ongoing problem. If waybills weresubmitted late he was not able to bill them out on time and accordingly not able to compensate the Claimant on the next compensationcheque. The Claimant disputes he was routinely late, but admits he would hold on to waybills for days because he did not want to submitthem unless he could photograph them on Mr. Hunter’s desk. [37] According to Mr.

Cody, he became aware early on that the Defendant’s cheques to the Claimant fell below his expectationsbased on the waybills he submitted. He says he raised this with the Defendant who responded either that the Claimant had submittedwaybills too late for the cheque cut-off date, or that the Claimant should speak to Mrs. Hunter who did the accounting for the companyto review the waybills. The Claimant never pursued the matter further and never reviewed any of its cheques or waybills with theDefendant. [38] The parties went their separate ways in October, 2015.

The Claimant did not bring this claim until 14 months afterwards. I findthat at all times the Claimant had sufficient information to review its cheques from the Defendants to confirm their accuracy. TheClaimant had photos of every waybill submitted which stated all the information necessary to calculate the amount billable to thecustomer (primarily distance and weight), and accordingly, the 75% portion payable to the Claimant.

The cheques to the Claimant wereaccompanied by ledgers identifying each individual waybill attributable to that cheque and what the Defendant actually billed thecustomer. [39] The Defendants complain that at no point did the Claimant ever raise any concerns about how its pay was being calculated, theamount being billed to customers, or discrepancies between what it believed deliveries were being charged out at and what it was beingpaid. As a result, Mr.

Hunter continued to attempt to help out the Claimant by “filling his truck” with large volume deliveries wherethere was an opportunity to do so, rather than send out other drivers for hot shot deliveries, and by billing customers rates he believed theClaimant did not contest. [40] Mr. Cody provided several reasons why he did not review his cheques or waybills with the Defendant during the relevant timeperiod and long afterward. He says he was too busy, he trusted the Defendant to accurately bill customers, and he wanted to avoidconflict with Mrs.

Hunter. [41] Although not strictly speaking a limitation on an action, acquiescence is a defence based upon delay. The Claimant’s legal orequitable rights may be lost by acquiescence. If a person having a right, and seeing another person about to commit, or in the course ofcommitting

an act infringing upon that right, stands by in such a manner as really to induce the person committing the act, and whomight otherwise have abstained from it, to believe that he assents to its being committed, he cannot afterwards be heard to complain ofthe act (James C. Morton, Limitation of Civil Actions (Toronto: Carswell, 1988) at 45). [42] In Bowen v. O'Brian Financial Corp. (1991), (BC CA), 62 B.C.L.R. (2d) 328 B.C.C.A. at p. 338 the courtreferred to the following statement of Oliver, J. in Taylor Fashions v.

Liverpool [1981] 1 Q.B. 133 where he said: Whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial - requires a verymuch broader approach which is directed rather at ascertaining whether, in particular individual circumstances, it would beunconscionable for a party to be permitted to deny that which, knowingly, he has allowed or encouraged another to assume to hisdetriment than to inquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as auniversal yardstick for every form of unconscionable behaviour. [43] The difference between amounts billable based on the courier rates as opposed to hot shot rates was considerable.

Mr. Cody waskeeping meticulous track of his waybills because, in part, he suspected he was being underpaid. He admitted he had a pretty good ideaevery pay period of what he expected to be paid by the Defendant. He told the Defendant, as evidenced in his texts, that he alwaysphotographed the waybills in the Defendant’s office. He admits that he was always immediately aware of alleged shortfalls in hiscompensation with each cheque and that he had enough information between his record of the waybills and the ledgers provided by theDefendant to perform a reconciliation to determine the source of the shortfalls.

As was evident in this trial, most of the alleged shortfallswere attributable to a defined set of customers or large deliveries where hot shot rates were billed rather than courier rates. [44] Despite being aware of an alleged shortfall every cheque, the Claimant did nothing to raise the issue with the Defendant. TheClaimant only generally complained that his cheque was lower than he thought it would be, but never specifically went over the quantumof the compensation with the Defendant.

I accept that the Claimant was often late and inconsistent in submitting waybills so theDefendant believed much of the Claimant’s concerns arose from not being fully paid for the relevant delivery period because large

waybills had been submitted late, and therefore could not be paid until the next cheque issued. In those circumstances, Mr. Cody’s periodic complaints about the size of his cheque were not sufficient to communicate to the Defendant that the Claimant objected to the Defendant’s pricing practices. [ 45 ] The Claimant never told the Defendant it believed the percentages of billings were incorrectly calculated or that the Defendant was undercharging customers. In a text exchange between the parties in April, 2015 Mr. Hunter invited Mr. Cody to deal with Mrs. Hunter about any perceived discrepancies in his cheque.

I accept Mrs. Hunter’s evidence that she was available to go over the Claimant’s payments and that she regularly sat down with the Defendant’s other owner-operators to go through the cheques and waybills to identify and sort out discrepancies. The Claimant never once attempted to review his cheque or the waybills with Mr. or Mrs. Hunter. [ 46 ] Mr. Cody says he did not review his cheques at the time because he completely trusted Mr. Hunter to accurately pay the Claimant. I do not accept his evidence in this regard. Mr. Cody started photographing all of his waybills on Mr.

Hunter’s desk, to the point he submitted waybills late because he would not submit them without securing that level of proof, because he was suspicious about being underpaid. That is not consistent with his evidence that he failed to review the details of any of his cheques during the relevant time period because he blindly trusted Mr. Hunter to pay the Claimant fairly and accurately. [ 47 ] Mr. Cody also says he did not review the cheques and waybills himself because he was simply too busy. He says he did not go to Mrs.

Hunter to review the cheques with her because she had shouted at him in the past and he did not want to deal with her. I do not find these explanations compelling. In his evidence Mr. Cody repeatedly emphasized how financially stressed and vulnerable he was during this time period because he had family commitments and an expensive loan on his truck. The Claimants’ cheques were hundreds, even thousands of dollars less than what Mr. Cody says he was expecting to be paid and what they ought to have been.

For example, the May 30, 2015 paycheque was $2402, or 1/3, short of what the Claimant alleges should have been paid. I do not believe that someone in Mr. Cody’s financial circumstances would not take some time to confirm if he was being underpaid. [ 48 ] A simple review of the Claimant’s cheque would not have been a time consuming task. Mr. Cody could have performed this reconciliation very quickly by honing in on the big deliveries for which he was expecting a large payout. For example, in his texts of April 27, 2015 Mr. Cody asked how much his cheque was going to be that pay period and was told Mr.

Hunter expected it to be around $5,600. Mr. Cody expressed concern that amount seemed low and asked if some large deliveries for Overland and Miltron may have been omitted. Mr. Hunter told Mr. Cody which runs were included in the cheque and Mr. Cody replied “Should still be more. I’ll have to start checking my pay cheques.” [ 49 ] The texts demonstrate Mr. Cody clearly had an expectation of how much he thought he would make from large deliveries and focused in on them when he learned his cheque may be lower than expected. He acknowledges he “should review his cheque”.

It is difficult to accept in light of these texts that Mr. Cody would then fail to review his cheque to confirm if any large deliveries to were missing or underpaid based on his record of waybills. [ 50 ] Had the Claimant done this reconciliation, it would have become apparent that the large volume customers were paying hot shot, not courier rates. If Mr. Cody was too busy, the Claimant could have hired a bookkeeper to perform this relatively simple task. I note that in preparation for this trial Mr.

Cody has reconciled hundreds of individual waybills and provided highly detailed accounting records of same. [ 51 ] I do not find it plausible that someone in Mr. Cody’s financial position would make no effort to review his cheque when it was apparent to him that it was significantly lower than what he was expecting to receive from his share of the deliveries, he was unhappy about the shortfall, he needed the money, and he was suspicious of the Hunters. I do not believe he would raise concerns about large deliveries potentially missing from his cheque, and then take no steps to review his cheque.

In the text exchange relied on by the Claimant, Mr. Cody told Mr. Hunter he would be reviewing his paycheque and asked “what do I do if there’s discrepancies? Do I just bring them to you and you pay me between paydays?” Mr. Hunter confirmed Mr. Cody should deal with Mrs. Hunter to sort out any discrepancies and that he would get paid for anything missing. Mr. Cody agreed to do that by confirming “okay.” Despite his statements to Mr. Hunter, Mr. Cody never reviewed his cheque, never identified any discrepancies, never met with Mrs. Hunter, and never sought payment for any missing or inaccurate deliveries.

It was reasonable in the circumstances for Mr. Hunter to believe Mr. Cody had reviewed the cheque and satisfied himself that the Defendant’s calculations and billings were accurate. [ 52 ] It is also hard to accept Mr. Cody’s evidence that he failed to complain, in part, because he felt bullied by Mrs. Hunter and did not want to get into a screaming match with her. When the Claimant and Defendant first discussed a partnership in 2014, Mr. Cody says Mrs. Hunter was opposed to the idea and yelled and screamed at him in an effort to thwart any partnership. In response, Mr.

Cody contracted with the Defendant as an owner-operator. He incorporated a company, bought a truck, incurred debt, and assumed associated business risk notwithstanding the temperament of the Defendant’s active co-principal, Mrs. Hunter. Her alleged verbal abuse then was not sufficient to deter Mr. Cody from going into business with the Defendant. It is hard to reconcile that fact with Mr. Cody’s evidence that he failed to complain about compensation at the time because he feared a confrontation with Mrs. Hunter. [ 53 ] Mr. Cody also admitted there were times Mr.

Hunter told him the customer quote for a large load before he picked it up. In one large load from Vanderhoof Mr. Cody says Mr. Hunter told him how much it was being charged out at. Mr. Cody says he did not agree to this price it but he delivered the item anyway, although he was not happy about it. Mr. Cody admits he was never forced to make deliveries and could refuse any dispatch by the Defendant. His evidence about this load demonstrates that the Claimant had knowledge the Defendant was not always pricing large loads on courier rates but was prepared to accept those dispatches anyway.

Despite being made aware on this occasion that the Defendant was not always charging out courier rates, Mr. Cody continued to accept dispatches for large loads without first confirming the delivery price. He also never requested a print-out of his deliveries prior to customers being invoiced, which was an option that allowed drivers to seek upwards adjustments to invoices before they were sent out to customers. I infer this was because he intended to affect the delivery even if it was priced at below courier rates. [ 54 ] I find Mr.

Cody was aware large volume customers were not being billed out at the courier rates. I accept Mr. Hunter’s evidence that he and Mr. Cody talked on many occasions about what deliveries were being priced at and how large customers, like Canfor Plateau, were being charged. I accept they had specific conversations where Mr. Hunter explained to Mr. Cody that they could

not charge customers courier rates for large volume deliveries and that customers like Overland had said they would not pay more than a hot shot rate for such deliveries. While Mr. Cody was not happy about that and his preference was to receive more money, in full knowledge of that fact he continued to work with the Defendant and load his truck with large volume deliveries. I find the real reason Mr.

Cody did not press the issue was because he needed the revenues from those deliveries and, as he ultimately admitted in his evidence, he did not want to disturb his business relationship with the Defendant. [ 55 ] Mr. Cody says that had he known the Defendant was only billing customers hot shot rates for large volume deliveries, he would have declined to make those deliveries. I have difficulty reconciling Mr. Cody’s evidence on this point with his evidence about his level of financial need.

I do not believe he would drive a partially empty truck for hundreds of kilometres rather than add additional paid cargo only because that cargo was being charged at a hot shot rate. [ 56 ] Mr. Cody also suggests that sometimes he filled his truck with the larger heavier items and left smaller lighter items behind in the belief he would make more money off the heavier items based on the courier rate. I have little evidence about how often Mr. Cody genuinely had the option of rejecting courier sized items in favour of filling his truck with heavy freight items.

The Claimant typically drove a courier route delivering multiple smaller items. It is hard to envisage how it could keep that route if it were consistently rejecting customers’ normal courier deliveries in favour of loading its truck with large freight. [ 57 ] I find that had the Claimant and Defendant expressly discussed the quantum of rates charged to customers for large volume deliveries, the Claimant would still have performed those deliveries at the hot shot rate or something close to it. The Claimant needed to maximize revenues from is truck by filling it whenever possible.

There was no realistic option to ever charge the customers what the Claimant says it expected. [ 58 ] The Claimant never refused to effect deliveries being charged out at hot shot rates. It never confirmed rates prior to delivery. I accept the Defendant’s evidence that had the Claimant stated its opposition to the Defendant’s pricing model, the Defendant either would have gone back and tried to negotiate a higher rate with the customer or sent a different truck to do a hot shot delivery. [ 59 ] In

summary, the Claimant knew the Defendant was charging certain customers less than the courier rates, it chose to remain silent in order to fill its truck and preserve its business relationship with the Defendant, and the Defendant relied on that silence to its detriment in continuing to charge customers hot shot rates and directing large volume dispatches to the Defendant rather than hot shot trucks. It would be unfair for the Claimant to now assert a breach by the Defendant in its pricing and dispatching practices. The elements of the defence of acquiescence are made out. [ 60 ] In

summary, I find that even if there was an agreement that the Defendant would only ever bill out the Claimant’s deliveries at courier rates, the Claimant, having acquiesced to customers being charged out at hot shot rates, is estopped from now asserting its right to be paid at the higher rates.

Issue #4: If there was no agreement on the issue of compensation, is the Claimant entitled to compensation in contractual quantum meruit? [ 61 ] In the event I am wrong and there was no agreement between the parties as to how large volume customers would be charged, I must consider whether the Claimant is entitled to relief in contractual quantum meruit . The principle of quantum meruit can apply where parties have contract but fail to address all aspects of the contract and one party performs work for the other in an expectation of being paid in the absence of an agreement as to price.

In this case, this principle could apply to the extent that the parties agreed customers would be charged the courier rates set out on the “rate sheet” in the initial expectation that the Claimant would typically be delivering smaller weight goods in a route type service, but failed to specifically address how customers would be charged from that rate sheet if the Claimant was delivering higher volume or higher weight goods.

In that case, there was no meeting of the minds on the issue of compensation for those deliveries because the Claimant thought the courier rates would apply and the Defendant thought the hot shot rates applied. [ 62 ] The principle of quantum meruit is tied to the notion of unjust enrichment, that is, it is unfair for someone to enjoy the benefit of someone’s work or services without having to pay for them. In this case, the Defendants did not enjoy any increased benefit by undercharging customers for the Claimant’s deliveries.

Since the Defendant’s sole revenues were based on a shared a portion of the billings, the Defendant also lost revenues if it undercharged customers. [ 63 ] Further, the principle of quantum meruit provides that where there is no agreement, the party providing the service is entitled to be paid “reasonable remuneration” for the work done. In this case, the Claimant was paid a hot shot rate for the larger deliveries even though the Claimant was not providing a hot shot service.

To that extent, the Claimant was being paid more than the standard price for those deliveries because the Claimant did not have to dedicate its truck and driver to just a single large delivery, but could group that delivery with a number of other packages and deliveries for which it was also being paid, thereby reducing its net costs of delivery. In my view, even if there were no contract between the parties on the issue of large deliveries, the Claimant was paid a reasonable rate for those deliveries.

Issue #5: If the Claimant is entitled to relief, how much should it be paid? [ 64 ] Having found no breach of contract and no claim in contractual quantum meruit , no amounts are payable to the Claimant. Issue #6: If the Claimant is entitled to relief, which of the Defendants is liable for payment? [ 65 ] Having dismissed the Claim, I do not need to decide the issue on whether the contract was with Mr. Hunter personally or the corporate Defendant. Disposition [ 66 ] The claim is dismissed. The parties are at liberty to

schedule an appearance to make submissions as to any costs payable in

relation to these proceedings and in relation to the vehicle seized by the Claimant as security for its claim. ______________________ The Honourable C. Malfair Provincial Court Judge