Grieg NL Nurseries Ltd. Plaintiff And: Jeffrey Daniels, trading as Safe Work Solutions Defendant, 2022 NLSC 99

court crest IN THE SUPREME COURT OF NEWFOUNDLAND AND LABRADOR GENERAL DIVISION Citation : Grieg NL Nurseries Ltd. v Jeffrey Daniels (Safe Work Solutions) , 2022 NLSC 99 Date : June 14, 2022 Docket : 202101G2510 Between: Grieg NL Nurseries Ltd. Plaintiff And: Jeffrey Daniels, trading as Safe Work Solutions Defendant Before: Justice Carl R. Thompson Edited Transcript of Oral Reasons for Judgment Place of Hearing: St. John’s, Newfoundland and Labrador Date of Hearing: May 24, 2022

Summary: An application to set aside a default judgment established that the Defendant had the potential to disclose variances in the contract by which the default order was taken out and affecting the right to termination or entitlement to quantum merit. Appearances: Megan S. Reynolds Appearing on behalf of the Plaintiff

Sarah J. Clarke Appearing on behalf of the Defendant Authorities Cited: CASES CONSIDERED: Langor v. Spurrell (1997), (NL CA), 157 Nfld. & P.E.I.R. 301, 1997 CarswellNfld 238(C.A.); Patey (Guardian ad litem of) v. Holloway, 2010 NLTD 94 RULES CONSIDERED: Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D REASONS FOR JUDGMENT Thompson, J.: INTRODUCTION [1] The Defendant applies to set aside a judgment obtained by default on May 20, 2021. The Plaintiff operates a salmon hatcheryat Marystown, Newfoundland and Labrador.

The Defendant agreed to provide the Plaintiff with fall protection systems at two of itssmolt hatchery operations including equipment and personnel training. background The Default and Defendant’s Explanation [2] The Statement of Claim was filed April 7, 2021. The Defendant advises that on April 9, 2021, the Plaintiff’s solicitor askedthe Defendant’s solicitor whether he would be accepting service of a Statement of Claim. [3] On April 24, 2021, the Defendant was served with the Statement of Claim and on that day forwarded a copy of the Statementof Claim to the solicitor, Mr.

Robert Regular. [4] On April 25, 2021, Mr. Regular appears to have written to his client noting that it was a lengthy Statement of Claim that hehad received and asked the Defendant to get back to him as soon as possible with a detailed response to that claim so that Mr. Regularcould prepared a Demand for Particulars, or in the alternative, prepare a Statement of Defence. [5] On April 26, 2021, Mr. Daniels wrote Mr. Regular responding to the Statement of Claim. Mr. Regular advises the court thatthe email was unknowingly sent to Mr.

Regular’s junk mail and thus he had no notice that it had been received and assumed that Mr.Daniels had obtained other legal counsel and did not pursue Mr. Daniels any further. [6] On May 20, 2021 the Default Order was taken out. [7] Mr. Daniels deposes in an affidavit filed March 11, 2022: 5. THAT on or about June 7, 2021, Mr. Regular replied to my email alleging that I had not answered his April 25, 2021 email and,in response, I forwarded him the email I had sent him on April 26, 2021. After reviewing the same, Mr. Regular indicated to me that hehad not received it.

A copy of our e-mail correspondence is attached hereto as Exhibit “D”. Please note that the contents of my April26, 2021 email have been redacted due to solicitor-client privilege. 6. THAT on or about June 8, 2021, I had a meeting with Mr. Regular to discuss this matter and I instructed him to immediatelybring on an application to set aside the default judgment. [8] I note the application was filed by Mr. Regular on June 23, 2021. THE LAW [9] Rule 16.06 of the Rules of the Supreme Court, 1986, S.N.L. 1986, c. 42, Sch. D states: 16.06.

The Court may, on such terms as it thinks just, set aside or vary any judgment entered by default in pursuance of Rule 16. [10] In Langor v. Spurrell (1997), (NL CA), 157 Nfld. & P.E.I.R. 301, 1997 CarswellNfld 238 (C.A.) Green,J.A. restated the principles that apply to Rule 16.06 applications. He noted that as a precondition to setting aside the default judgment,the applicant must demonstrate a potentially good defence on the merits and both that the reopening of the case would not be a waste of

time and there is a real issue in controversy which requires adjudication on the facts or the law. There has to be some basis for the defence in the reality of the available evidence. If the defendant shows a potentially good defence, default judgment should be set aside unless it would not be fair to do so considering the timeliness of the application, the reason no defence was filed at the time, the prejudice to the plaintiff and the need to bring finality to disputes ( Langor , paragraph 44 ). [ 11 ] Justice Green also considered the evidentiary basis for Rule 16.06 .

He noted that subject to the right of some cross- examination, the evidence on the application should be provided by affidavits which set out the merits of the proposed defence that show that it has some potential in real evidence and is accompanied by a draft of the intended defence. Affidavits may be dispensed with in rare cases where the facts are already pleaded by the plaintiffs for the defence. As a general rule, these facts do not come from the defendant’s solicitor personally.

The facts must be deposed to the best of the deponent’s knowledge and belief and disclose its basis and that based on hearsay must disclose the source ( Langor , paragraphs 47-56 and Patey (Guardian ad litem of) v. Holloway , 2010 NLTD 94 at para. 6 ). Plaintiff’s Claim [ 12 ] The Plaintiff pleads at paragraphs 3 through 16 as follows: 3.

On January 10, 2020, the Defendant submitted a written Engagement Proposal for the design, specification, equipment supply, installation and certification for use of Fall Protection Systems (“FPS”) at two of the Plaintiff’s production facilities, the Smolt and Post Smolt buildings, in relation to the Operation (the “Work”). The Engagement Proposal had been sought directly by Vigilant Management Inc. which had been retained and commissioned to source the FPS on the Plaintiff’s behalf. 4. The price of the Work was $138,760.00 for the Smolt building and $188, 210.00 for the Post Smolt Building.

The prices did not include applicable taxes, duties, fees or levies. 5. Billing for the Work was to be completed on a percentage basis and in relation to certain timelines and project activities as follows: a. Proposed acceptance – January 24th, 2020 20% of project b. System design and approvals – February 21, 2020 10% of project c. Equipment specification, order and manufacturing – May 1, 2020 20% of project d. Receiving QA/QC, corrections and shipping to staging area – July 2, 2020 25% of project e. Installation, inspection and certification 25% of project TBD (Q3, 2020) 6.

The Engagement Proposal was accepted by the Plaintiff on or about January 24, 2020 forming a binding contract between the Plaintiff and the Defendant (the “Agreement”). 7. Subsequent negotiations between the Plaintiff and the Defendant were held in which changes were agreed to certain design specifications for the Work. All such negotiations were completed by the end of September 2020 after which the Defendant was required to immediately order all necessary equipment, materials and supplies required for the installation and certification of the FPS. 8.

The Defendant, advised that there would be an approximate 14-week delivery period for the equipment, materials and supplies to the Plaintiff’s Operation in Marystown, Newfoundland and Labrador. At all material times, the Defendant knew or ought to have known that time was of the essence for the installation and certification of the FPS as provided in the Agreement.

9. Late in 2020 it came to the Plaintiff’s attention that the Defendant had in fact failed to order the necessary equipment, materials and supplies for the FPS, despite its assurances to the Plaintiff that it would do so and contrary to the provisions of the Agreement. 10. The Defendant’s failure to order the necessary equipment, materials and supplies at the end of September 2020 as required and his further failure to commence and/or complete the Work, constituted a material breach of contract. 11.

Furthermore, Defendant’s failure to order the necessary equipment, materials and supplies at the end of September 2020 as required so the Work could be commenced and completed as per the Agreement constitutes negligence on the part of the Defendant. 12. As part of the Work, the Defendant was also required to provide FPS training for the Plaintiff’s employees and personnel and to certify their respective knowledge, experience and proficiency in the use of the FPS. Upon successful completion of the FPS training each employee was to receive a certificate to certify that each had met the training requirements.

To date some employees have successfully completed the FPS training but have yet to receive their certificates from the Defendant. Other employees have only been able to partially complete their FPS training and as such cannot now qualify for their certificates, which renders their partial training useless. The Plaintiff must now seek alternate FPS training for its employees and personnel which will result in significant expenses to the Plaintiff. 13.

The Plaintiff states that the Defendant has breached the terms of the Agreement in failing to provide training certificates to employees who have successfully completed the FPS training and failing to complete the FPS training for other employees so that they may be entitled to a training certificate. 14.

Given the Defendant’s failure to comply with the terms of the Agreement and to order the equipment, materials and supplies as and when required, his failure and/or inability to complete the Work and his failure to complete and certify the FPS training of the Plaintiff’s employees, the Defendant was advised on or about January 13, 2021 that the Plaintiff was immediately terminating the Agreement. 15.

Given the 14-week delivery period for the necessary equipment, materials and supplies for the FPS, the Defendant’s failure to order same at the end of September 2020 will result in significant delays for the installation and certification of the FPS and the Work as a whole which has resulted in, and will continue to result in, significant costs and losses to the Plaintiff. The Plaintiff will now have to engage the services of another entity in order to have the Work completed. 16.

To date the Plaintiff has paid the Defendant the sum of $212,635.37 inclusive of HST towards the Work as set out in the Agreement even though the terms of the Agreement were not fulfilled, the Work has not been completed and the Plaintiff has received no benefit pursuant to the Agreement. Defendant’s response [ 13 ] In his affidavit filed March 1, 2022 Mr. Daniels attests at paragraphs 7(

i) through (iv): i. I have never personally traded as and/or carried on business as Safe Work Solutions; however, I am the president and sole director of 80529 Newfoundland and Labrador Inc. which was trading as and/or carrying on business as Safe Work Solutions Inc. at all material times hereto (hereinafter referred to as “Safe Work Solutions”). A copy of the Registry of Companies printout showing me as the sole director of 80529 Newfoundland and Labrador Inc. is attached hereto as Exhibit “E”.

I further state that I have never represented to the Plaintiff or any other person that Safe Work Solutions was an unincorporated entity and/or sole proprietorship; ii. The Plaintiff did not accept the written Engagement Proposal dated January 10, 2020, and thus was no binding contract between myself and the Plaintiff and/or Safe Work Solutions and the Plaintiff; iii.

Neither I nor Safe Work Solutions made representations that equipment, materials and supplied wold be ordered immediately, and, in fact, Safe Work Solutions had requested payment of an outstanding invoice from the Plaintiff prior to ordering the same; iv. Safe Work Solutions provided FPS training for the Plaintiff’s employees and personnel in accordance with Workplace NL’s standards. Only one of the Plaintiff’s employees did not complete the training, and so Safe Work Solutions offered to help him finish his

course during the next class that was being offered; and v. The Plaintiff has received significant benefit from the work of Safe Work Solutions including, but not limited to, system design/re-design and approvals, and is not entitled to the damages claimed. [ 14 ] In that affidavit Mr. Daniels attaches the proposed Defence. The proposed Statement of Defence states at paragraphs 3 through 9: 3.

As to paragraphs four (4) and five (5) of the Statement of Claim, the Defendant states that the price of the Work proposed by Safe Work Solutions Inc. did not include travel and accommodations or equipment shipping in the vent of delay on site outside the control of the corporation. Personnel costs for site delays, contractor (sub-contractor) training and orientations was indicated to be the client’s expense and billed at an hourly rate unless otherwise stated. 4.

At paragraph six (6) of the Statement of Claim, the Defendant states that the Plaintiff did not accept Safe Work Solutions Inc.’s written Engagement Proposal, and thus there was no binding contract nor agreement between it and the Plaintiff. 5.

As to paragraph seven (7) of the Statement of Claim, the Defendant states that neither he nor Safe Work Solutions Inc. made representations that equipment, material and supplies required for the installation and certification of the FPS would be ordered immediately, and, in fact, Safe Work solutions Inc. had requested payment of an outstanding invoice from the Plaintiff prior to ordering the same. 6.

As to paragraphs eight (8) and nine (9) of the Statement of Claim, the Defendant denies making representations and/or assurances that the equipment, materials and supplies would be ordered, nor providing a delivery period for the same. The Defendant further states that the Plaintiff never communicated to him and/or Safe Work Solutions Inc. that time was of the essence for the installation and certification of FPS. 7.

As to paragraphs ten (10), eleven (11), fourteen (14) and seventeen (17) of the Statement of Claim, the Defendants vehemently denies the Plaintiff’s claims of breach of contract and negligence and puts the Plaintiff to the strict proof thereof. 8. As to paragraphs twelve (12) and thirteen (13) of the Statement of Claim, the Defendant states that Safe Work Solutions Inc. provided FPS training for the Plaintiff’s employees and personnel in accordance with Workplace NL’s standards.

The Defendant further states that only one of the Plaintiff’s employees did not complete the FPS training, and so Safe Work Solutions offered to help him finish his course during the next class that was being offered. Furthermore, the Defendant denies that it was Safe Work Solutions Inc.’s responsibility for issuing certificates and states that the same is obtained from Workplace NL. 9.

As to paragraphs fifteen (15), sixteen (16) and eighteen (18) of the Statement of Claim, the Defendant states that the Plaintiff has received significant benefit from the work of Safe Work Solutions Inc. including, but not limited to, system design/re-design and approvals, and is not entitled to the costs, losses, expenses and damages claimed. considerations and conclusions Meritorious Defence [ 15 ] The Defendant proposes that it was operating as a limited company and not trading in his name personally.

I note that the alleged contract pleaded by the Plaintiff shows the operating name by which the Defendant is named, but not the numbered company proposed. I also note that the pleaded contract was executed by Mr. Daniels personally though he references Safe Work Solutions Inc. in its opening paragraph. Mr. Daniels denies the proposal of that contract was ever accepted by the Plaintiff. I note the document in evidence is signed by Mr. Daniels and not by the Plaintiff.

Its acceptance is pleaded by the Plaintiff and I assume the Plaintiff is of the view that by the parties’ actions yet to be proven, acceptance of the contract can be established. [ 16 ] Of greater significance it appears that the original proposal now claimed by the Plaintiff to form the contract may not comprise the whole of the agreement based on the pleadings. Notably, the Plaintiff itself pleads that negotiations continued through September of 2020 and confirmed a further 14 week period for delivery, presumably taking that delivery feature to sometime in January of 2021 in order to be effective.

This is not inconsistent with the proposed defence and Defendant evidence that the negotiations continued beyond the timeframe of the initial proposal which the Plaintiff alleges to represent the full contract. Thus, on the evidence the actual times and the proposal timelines differ. [ 17 ] Notably as well, the Plaintiff takes the position it terminated the agreement when it learned in late 2020 the equipment had not been ordered immediately at the end of September 2020. The Defendant denies this undertaking to order the equipment.

I note the Plaintiff’s termination would have been close to the 14 week period negotiated. The Defendant says it required payment prior to placing the order which was not made. If the Defendant proves this allegation it could serve to defeat the Plaintiff’s claim in breach of contract.

As I have noted, it appears that the basis for the timeliness requirement justifying termination is pleaded in a timeframe later than the original proposal which was May 1, 2020. This is consistent with the Defendant’s position that further negotiations forming the contract took place after the proposal pleaded by the Plaintiff. [ 18 ] If the contract contains further specifics based upon negotiations post proposal, as even the Plaintiff’s pleadings appear to suggest, the trial of the issues between the parties would have to assess these features.

Additionally, subject to any possible determination that the proposal did not contain the whole agreement and or that the compensation paid to time of termination was incomplete, the Defendant is entitled to prove the whole of those terms and/or the appropriate quantum merit if the Defendant had been properly terminated in the circumstances. [ 19 ] While the whole of the evidence in issue between the parties is not in my view clearly disclosed by the Defendant, it does comply with the evidentiary basis required on this application to support the Defendants having a potentially good defence. [ 20 ] I accept that the application was taken within a reasonable time of the Defendant becoming aware of the lapse in communication after being served with judgment process.

While most of the communication of Mr. Daniels to his solicitor on the details of the response to the claims is redacted, its occurrence is consistent with the explanation provided as to why the Defence was not filed. [ 21 ] In this case the prejudice to the Plaintiff is that it holds a judgment yet to be enforced but in my view, the entitlement to that right ought to face the Defendant having an adjudication of that entitlement. Nor would the principle of finality affect this right to adjudication. Finality in this case would otherwise be precipitous.

Adjudication would better support finality of the matters in dispute. [ 22 ] Accordingly the application is granted. The Defence is to be filed forthwith as soon as possible. Costs are in the cause. _____________________________ Carl R. Thompson Justice