BFI Canada v. Timbertown Building Centre Date:, 2010 BCPC 439

Citation: BFI Canada v. Timbertown Building Centre Date: 20100430 2010 BCPC 0439 File No: 22846 Registry: Richmond IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: BFI CANADA INC. CLAIMANT AND: TIMBERTOWN BUILDING CENTRE LTD. dba TRC-TIMBER REALIZATION CO. DEFENDANT REASONS FOR JUDGMENT OF ADJUDICATOR YULE Appearing for the Claimant: A. Syer, Articled Student Appearing for the Defendant: D. Rutherford & T. Kaczmarczyk, Co. Representatives Place of Hearing: Richmond , B.C.

Date of Judgment: April 30, 2010 [ 1 ] In this matter the claimant, BFI Canada Inc., claims against the defendant, Timbertown Building Centre Ltd., doing business as TRC-Timber Realization Company, for the total sum of $4,253.62. That sum is inclusive of court filing and service fees. [ 2 ] There are two components to the claim; one is the sum of $3,325.30 which is claimed as liquid damages for the alleged breach by the defendant of a service contract under which BFI Canada Inc., the claimant, removed garbage and refuse from the defendant's premises.

The second kind of claim by the claimant is for service charges totalling $692.32 for the months of November and December 2009. [ 3 ] The dispute involves the

interpretation of the written service agreement which is dated September 2003. That agreement, on its face, was for a five-year term. There is a copy of this agreement filed as part of the plaintiff's trial statement that has been executed by both parties. I find that is a binding agreement. The defendant did not have in its records a copy of this agreement signed by the claimant.

The defendant's copy is signed by a representative of the defendant only; however, I do not think that makes the contract invalid, and in any event, the parties operated under this written contract from 2003 until 2008 and continued to operate under that contract as renewed up until the time of the events leading to its termination. [ 4 ] The 2003 contract contains a provision whereby at the end of the five-year term it automatically renews for a further five-year period without the parties doing anything.

It does contain a provision whereby the defendant can give notice of termination of the contract within a specific timeframe prior to its expiry. The defendant did not give notice to terminate the contract prior to its original expiry date in September 2008, and accordingly the contract renewed and in the summer of 2009, that contract was in force and would have expired in September 2013. [ 5 ] The defendant has multiple business locations in Calgary, Edmonton and Vancouver. It had separate service contracts with BFI for each of its locations.

Some of the contracts referable to the Alberta locations had the term of the contract altered from what was on the printed contract, in effect removing the automatic renewal provision, but the Vancouver contract had not been so altered and so I conclude that it was in force in the summer of 2009 and would have continued in force until September 2013.

[ 6 ] In February 2009, the defendant commenced to negotiate with a representative in Calgary of BFI Canada to have new terms apply to all of its Alberta and the Vancouver locations. Those negotiations went on from roughly February 2009 until around the end of July 2009. In the course of those negotiations, the BFI representative, Mr. Gregory, did propose new terms for some of the Alberta locations, although he did not offer new terms for the Vancouver location. During the course of those negotiations, Mr. Gregory did not advise Mr.

Rutherford, the representative of the defendant who was negotiating for the defendants, that there were terms in the existing contacts that restricted the defendant's right to terminate those contracts unilaterally without incurring an exposure to pay damages. BFI was, at least for the Alberta locations, obviously prepared to agree, as it was entitled to do, to terminate its existing contracts and put in place new contracts with the defendant on new terms that were agreed to. The fact is that Mr. Rutherford entered into those negotiations with Mr.

Gregory without having a copy of the existing BFI agreement for the Vancouver premises on hand and without being aware of its terms. It appears he also did not have copies of some of the contracts, at least for the Alberta locations. In any event, those negotiations proceeded. It was made clear by Mr.

Rutherford that he was soliciting bids from other service providers and that he was prepared to change service provider if he could not come to an agreement on new terms with BFI. [ 7 ] The upshot was that there was no agreement reached between the defendant and BFI on new terms and so the defendant, by letter dated July 21, 2009 to Mr. Gregory in Calgary, gave written notice that it was terminating all its existing contracts with BFI effective August 30, 2009, in effect giving a little more than 30 days written notice of termination. That prompted Mr.

Gregory to point out that there were existing contracts in place and copies of those contracts were provided to Mr. Rutherford fairly shortly thereafter, including a copy of the contract applicable to the Vancouver location. On receiving that contract, and the contract was not easily completely legible, Mr.

Rutherford changed his instructions and requested that the contracts be terminated effective September 30, which would be 60 days notice, and there were some provisions in some of the contracts that permitted it, given at the appropriate time during the term of the contract, a right to terminate on 60 days notice. [ 8 ] BFI relies upon the provision in its Vancouver contract that in effect it says that if the contract is terminated by the customer other than at its expiration then the customer agrees to pay BFI liquidated damages that are equivalent to service charges for the nine months immediately preceding the termination of the contract, and that is the amount of $3325.30 as calculated by BFI that is claimed under the first head of damage they are seeking in this action. [ 9 ] The defendant says that it ought not to be liable for that payment.

The basis, as I understand it, is that Mr. Gregory, during his negotiations, did not provide copies of the contracts, did not alert Mr. Rutherford to the fact that his right to terminate was restricted, with the result that when the defendant terminated the contracts, it did coincidentally enter into contracts for all its locations with a new service provider and became contractually bound to a new service provider. [ 10 ] In my view, the omission of Mr.

Gregory to disclose that information does not invalidate the provision of the contract that calls for the payment of liquidated damages on termination by the customer. It seems to me that there is an obligation on parties to a written contract to have the contract and to be aware of its terms. I do not really think that there was an obligation on Mr. Gregory to alert the defendant to the existence of all of the terms of the existing contracts. He did that late in the day and he did that at a time when it may have been possible for Mr. Rutherford to hold off committing to Super Save, but I take it from Mr.

Rutherford's evidence that, apart from the better terms offered by Super Save, he had become dissatisfied with the services of BFI and was not particularly in a mind to change the decision to change service providers over the issue of liquidated damages. In fact, as I think corroborative of that conclusion is that Vancouver BFI branch after August the 30th did offer to match the terms of the competitive service provider for Vancouver and Mr.

Rutherford indicated he was not interested in renewing his service contract for the Delta location with BFI, even if it was on the same terms offered by Super Save for the Delta location. [ 11 ] I conclude that BFI is entitled to its claim for liquidated damages because the contract was terminated midterm by the defendant. The measure of liquidated damages set out in the contract being nine months is, in my view, a fair one in the circumstance that this contract still had four years to run.

The same consideration might not apply if a defendant were seeking to terminate his contract that was within six months, say, of expiration. In any event, I think the claimant is entitled to its claim for liquidated damages as presented . [ 12 ] With respect to the claim for the November and December service amounts, I take a different view. The defendant requested that all its contracts be terminated initially as of August 30, but subsequently as of September 30, 2009, and in the week or so prior to September 30 made that position clear more than once. Mr.

Rutherford's evidence is that as of either the very end of September or the beginning of October, his contract with Super Save was in force. Super Save had its bins on the Vancouver location and Timbertown's employees were instructed to use the Super Save bins and not the BFI bins. I accept that those instructions were given and I conclude that if there was anything in the BFI bins to be removed in November and December, it probably was not very much and it may not have come from Timbertown, and it should have been obvious to BFI drivers that there was some major change that had gone on.

In any event, it seems to me the claimant does not have a good reason not to accept its customer's request that the contract be terminated and it seems to me that the claimant likely did not provide any real service in November and December in any event, and if it did, it was doing so because it hoped it might be able to continue to make and deal with the defendant, but that has not happened and did not happen. [ 13 ] In the result, the plaintiff is entitled to its claim for liquidated damages for $3,325.30, plus its filing fees and service fees as set out in the Statement of Claim.

I don't see a claim for court order interest. Is there a claim for interest? There isn't on the Notice of Claim, amended Notice of Claim. [ 14 ] MS. SYER: No, there's not a

section for it; however, we would ask for court ordered interest. [ 15 ] THE COURT: All right. Then there will also be court ordered interest on the $3325.30, I'm going to say from September 30, 2009 to date because that's when I think the contract was terminated, notwithstanding the payment of the September 30 invoice for October which I suspect was probably paid by mistake, but didn't know what was going on. I can understand why it might have been. That is my judgment.