Pioneer Distributors Ltd. v. Fraser Collection Date:, 2011 BCPC 189

Citation: Pioneer Distributors Ltd. v. Fraser Collection Date: 20110727 2011 BCPC 0189 File No: 23762 Registry: Richmond IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: PIONEER DISTRIBUTORS LTD. CLAIMANT AND: FRASER COLLECTION SERVICES LTD. DEFENDANT REASONS FOR JUDGMENT OF HIS WORSHIP L.A. KAHN Appearing for the Claimant: Hugh Forster Appearing for the Defendant: Greg McCann Place of Hearing: Richmond , B.C.

Date of Hearing: July 22, 2011 Date of Judgment: July 27, 2011 [ 1 ] This matter came before me on July 22, 2011 pursuant to the Simplified Trial Rules under the Small Claims Act . [ 2 ] Each of the parties filed a Trial Statement.

A representative for Pioneer Distributors Ltd. (“Pioneer”), Hugh Forster, and a representative for Fraser Collections Services Ltd. (“Fraser”), Greg McCann, swore that the contents of the Trial Statements were true. [ 3 ] Prior to the formal hearing commencing, the parties engaged in a frank discussion, but could not reach any agreement during the mediated phase of the hearing. [ 4 ] When the trial commenced, I asked the parties if they would agree to admit into evidence the discussions that took place between them, including my questions for each of them, as part of their evidence in the trial.

Both agreed to do so. Accordingly, most of the record was based upon the discussions and the Trial Statements. [ 5 ] Each of the parties was given the opportunity to clarify their earlier testimony during the mediation phase and make reference to any documents in their Trial Statement. Neither party had anything significant to add, and each declined to cross-examine the other, as that had to a large extent occurred during the mediated phase. [ 6 ] As can be seen from the Trial Statement, each party sets out similar facts and relies on the same documents.

[ 7 ] Pioneer retained Fraser to collect an account from Allied Kitchens (“Allied”). Approximately $22,000 was owing. There is no written contract between the parties, but it was agreed that Fraser was entitled to 10% of the monies collected. Fraser began collection proceedings upon the account being sent to them by Pioneer for collection. [ 8 ] Allied, who I understand is a long standing client of Pioneer, needed additional product. Allied contacted Pioneer directly. Pioneer arranged to receive 6 undated cheques for $3,000 each from Allied, and Pioneer agreed to supply additional products to be paid in cash.

At the same time, Pioneer learned from Allied when the cheques could be cashed and, after having sent the cheques to Fraser, contacted Fraser to process the cheques. [ 9 ] Two cheques were cashed in this manner. Fraser became entitled to $600 in commission. [ 10 ] After the second cheque cleared, Pioneer decided that it was not necessary for Fraser to be involved any further. Pioneer requested that Fraser return the remaining 4 cheques for $3,000 each. Upon being “fired”, as Mr.

McCann described it, he advised Pioneer that he would deduct the remaining commission, being $300 per cheque, and remit the net funds to Pioneer. This is what occurred. [ 11 ] Pioneer says that Fraser did not earn the commission on the remaining 4 cheques.

Fraser says that once they contacted Allied, which is not disputed, and as a result of their efforts and the efforts made by Pioneer, the 6 undated cheques were delivered to Pioneer as explained above. [ 12 ] Fraser says they were prevented from taking further collection steps because Pioneer wanted to continue a business relationship with Allied, decided to make a profit from the new sales and, hopefully, to collect their outstanding debt. Mr.

Forster told me that the remaining 4 cheques had not been cashed, nor had there been any attempt to cash them. [ 13 ] I have concluded that Fraser is entitled to their commission. Had Pioneer not prevented them from attempting to collect on the remaining 4 cheques, there is every likelihood that Allied would have made payment. I accept Mr. McCann’s submission that once the pressure had been taken off Allied, it became easy for them to deal with Pioneer, and Pioneer was content with the “cash” business, as they were making a profit from the new sales with Allied.

Essentially, Pioneer diverted the past due account and took new sales in its place, rather than the outstanding account being paid first. [ 14 ] Therefore, Pioneer has been collecting the outstanding account by continuing to do business with Allied. To the extent they have done so, any monies received by Pioneer from Allied, which was not explained by Pioneer, can be deemed to be payment of the outstanding accounts in priority of any new business. [ 15 ] Accordingly, the claim is dismissed. ____________________ Lawrence A. Kahn