Super Save Disposal Inc. v. Northwest Waste et al. Date:, 2012 BCPC 42

Citation: Super Save Disposal Inc. v. Northwest Waste et al. Date: 20120210 2012 BCPC 0042 File No: 23846 Registry: Richmond IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SUPER SAVE DISPOSAL INC. CLAIMANT AND: NORTHWEST WASTE SOLUTIONS INC. and CRAFTSMAN MILLWORK & DESIGN LTD. DEFENDANTS REASONS FOR JUDGMENT OF HIS WORSHIP L.A. KAHN Counsel for the Claimant: James R. Kitsul Counsel for the Defendant: Joseph W. Jachimowicz Appearing for the Defendant, Craftsman Millwork & Design Ltd.: Sheryl Thompson Place of Hearing: Richmond , B.C.

Date of Hearing: December 9, 2011 Date of Judgment: February 10, 2012 Introduction [ 1 ] This matter came before me on December 9, 2011 pursuant to the Simplified Trial Rules under the Small Claims Act . [ 2 ] Super Save Disposal Inc. (“Super Save”) claims against Craftsman Millwork & Design Ltd. (“Craftsman”) for $1,888.99 and costs pursuant to a written Service Agreement dated January 25, 2011 between them for waste disposal services. [ 3 ] Also, Super Save claims against Northwest Waste Solutions Inc. (“Northwest”) for interfering with the Super Save/Craftsman Agreement or, alternatively, for inducing the breach of Super Save/Craftsman Agreement. [ 4 ] Mr.

Kitsul concedes that Super Save is entitled to one set of damages only, that is, if Craftsman is liable for damages, Super Save is not entitled to damages from Northwest. Likewise, if the Claimant is entitled to damages against Northwest, Super Save cannot recover a sum greater than the amount claimed against Craftsman. [ 5 ] At the conclusion of the hearing on December 9, 2011, Mr. Kitsul asked for leave to provide written submissions regarding the law of right of first refusal by January 13, 2012. Those submissions were received at the Registry on January 13, 2012. Mr. Jachimowicz replied on January 27, 2012.

Background [ 6 ] A representative of Super Save, Simon Cheng (“Mr. Cheng”), made a cold call to Craftsman and met with Sheryl Thompson (“Ms. Thompson”) on January 25, 2011. Mr. Cheng offered a very “good price”, as he described it, for a new customer. He arranged for Craftsman to sign a Service Agreement with Super Save on the same day.

[ 7 ] The date of the contract was January 25, 2011. The parties amended paragraph 3 of the contract to reduce the term of the agreement to 3 years from 5 years on the standard form used by Super Save. [ 8 ] Mr. Cheng explained to Ms. Thompson that for new customers with existing waste removal contract, Super Save would write a letter to terminate the contract between the customer and their existing waste removal service provider (in this case, Northwest). The letter advised Northwest that their services would not be required by Craftsman when the Northwest/Craftsman contract expired. [ 9 ] Mr. Cheng asked Ms.

Thompson to provide him with a copy of the Northwest/ Craftsman contract so he could notify Northwest. Ms. Thompson advised that she did not know when the contract with Northwest expired. [ 10 ] On January 25, 2011, Ms. Thompson completed a credit application for Craftsman with Super Save. [ 11 ] As well, Mr. Cheng had Ms. Thompson sign a letter dated January 31, 2011 to Northwest, which provided notification to Northwest that Craftsman intended not to renew their contract with Northwest on the specified expiry date.

As well, the letter requested that Northwest send a copy of the most recent valid service agreement to Craftsman to confirm the termination date. [ 12 ] Additionally, the letter provided in the last full paragraph as follows: If a copy of the most recent contract between our companies is not received within ten (10) working days, we will conclude that no valid contract exists and we will instruct our new hauler to commence service.

I do not wish to be contacted by a representative from your company in the attempt to induce me to sign an additional contract with you. (my emphasis) [ 13 ] On February 18, 2011, Super Save received a letter from Ms. Thompson which is reproduced as follows: Please be advised that we will continue to utilize Northwest Waste Systems Inc. to service our waste removal and recycling needs. Please be advised that we are currently a party to a legally binding service agreement with Northwest Waste Systems Inc. (the “Service Agreement”). Accordingly, we will not require your services at this time.

We will endeavour to contact your office, in the future, in the event we do not continue with the Service Agreement. We further advise that the Service Agreement contains a “right to negotiate” provision which we have elected to exercise; therefore your services will not be required at this time. [ 14 ] In cross-examination, Mr. Cheng agreed that he saw waste removal bins at Craftsman’s business premises, including a Northwest bin. He agreed that he did not ask Ms.

Thompson if Craftsman had a contract with another supplier, but said that it was not necessary to do so because the Super Save/Craftsman contract would not take effect until Northwest/Craftsman contract ended. Further, he agreed in cross-examination that he knew the Northwest standard contract had a specified period in which to cancel their contract, and that he required the contract to know the notice period for the proper cancellation. [ 15 ] Mr. Cheng said that when he met with Ms.

Thompson on January 25, 2011, she gave him a copy of the Northwest/Craftsman contract, but he could not read the terms clearly, and could not determine when the contract ended. [ 16 ] Not surprisingly, Super Save was not satisfied with letter received from Ms. Thompson. [ 17 ] Ms. Janine Jordison (“Ms. Jordison”) testified on behalf of Super Save. She is the Sales and Retention Manager for Super Save. She had no personal dealings with Craftsman when the contract was signed on January 25, 2011.

She reviewed the documents that existed between Super Save and Craftsman, and testified that no payments were made by Craftsman, and that Super Save did not deliver a waste removal bin. [ 18 ] Ms. Jordison referred to the Super Save/Craftsman contract and explained that the Super Save/Craftsman contract could not commence until the Northwest/Craftsman contract had expired. [ 19 ] Ms. Jordison confirmed that she had no dealings with Craftsman after June 1, 2011, nor did she have any discussions with Northwest. [ 20 ] When asked about the damages incurred by Super Save, Ms. Jordison explained these included:

a) expenses for the sales representative (Mr. Cheng), i.e. fuel;

b) resources used by the sales representative;

c) the sales representatives’ salary; and

d) the loss of the 3-year revenue stream provided by the Super Save/Craftsman contract. [ 21 ] The Super Save/Craftsman contract provided, in part, as follows: 2.

BINDING EFFECT … after the execution of the Agreement, it is discovered that the Customer is then currently obligated under an existing contract with a third party, the effective date of this Agreement shall be the first day after the expiration of the Customer’s third party contract (the “Effective Date”), and this Agreement shall remain a legally binding contract between the Contractor and the Customer and shall be for the term and any renewal thereof agreed to in paragraph 3 of this Agreement…. 3.

TERM AND RENEWALS This Agreement commences on the Effective Date hereof and continues for 3 years after the date Service begins hereunder…

11. FAILURE TO PERFORM If Customer purports to terminate this agreement prior to the expiration of its term…or (

b) accept the purported termination by Customer and terminate this Agreement, in which instance Customer agrees to pay Contractor, as liquidated damages, an amount equal to the greater of (1) the sum of Customer’s monthly billing for the most recent nine months, or if none, the billing projected by Contractor for the first month, multiplied by nine or (2) the sum of amounts due to the Contractor for the balance of the entire term remaining on this Agreement.

Customer acknowledges that the foregoing liquidated damages are reasonable in lights of the anticipated loss to Contractor caused by the termination and are not imposed as a penalty…. [ 22 ] Following the closing of the case on behalf of the Claimant, Mr. Jachimowicz made a no evidence motion on behalf of Northwest, which I denied. [ 23 ] Ms. Marni Bodnarchuk (“Ms. Bodnarchuk”) testified on behalf of Northwest. She is the Retention Manager for Northwest. Her role is to respond to all cancellations of contracts.

She prepared the Trial Statement on behalf of Northwest and, as I understand it, the Trial Statement on behalf of Craftsman. [ 24 ] Ms. Bodnarchuk explained that Northwest and Craftsman entered into a 5-year contract on August 22, 2005. After receiving the letter from Ms. Thompson, she met with Ms. Thompson and told her that she was not able to cancel the Northwest/ Craftsman contract as it had automatically renewed on August 21, 2010 for a further 5 years. [ 25 ] When advised by Ms. Thompson that Super Save had offered a lower price, Ms. Bodnarchuk offered to reduce the Northwest charges.

Accordingly, Northwest and Craftsman entered into a new contract on February 18, 2011 for a further term of 5 years. [ 26 ] In cross-examination, Ms. Bodnarchuk testified about the differences between the Super Save and Northwest contract, which included the size of the bins, the monthly contract rate, and the length of the contract. She confirmed that the new Northwest/Craftsman contract did not expire until January 31, 2016. [ 27 ] Ms. Thompson testified on behalf of Craftsman. She told Mr. Cheng that she needed to contact Northwest about the existing Northwest/Craftsman contract, and that she gave Mr.

Cheng a copy of the Northwest/Craftsman contract, although the copy was not clear. [ 28 ] Ms. Thompson understood that the Super Save/Craftsman contract did not start until the Northwest/Craftsman contract had expired. She had a telephone conversation with Ms. Jordison and confirmed Super Save did not deliver a disposal bin, and there was a difference in the size of the bins as identified by Mr. Cheng. [ 29 ] In cross-examination, Ms. Thompson confirmed the following:

a) She signed the contract with Super Save on January 25, 2011;

b) She understood that the Super Save/Craftsman contract did not commence until the Northwest/Craftsman contract expired;

c) She did not know when the Northwest/Craftsman contract expired;

d) She signed the January 31, 2011 letter to Northwest;

e) She did not contact Northwest, and that it was Mr. Cheng who did so;

f) After she received the telephone call from Ms. Bodnarchuk, she learned of the terms of the existing Northwest/Craftsman contract; and

g) A letter dated February 18, 2011 was sent to Super Save and prepared by Ms. Bodnarchuk as referred to in paragraph [13] above. [ 30 ] Ms. Thompson showed Ms. Bodnarchuk a copy of the Super Save/Craftsman contract. She said that she did not tell Mr. Cheng that Craftsman had a month to month contract with Northwest. She asked Ms. Bodnarchuk if Northwest would match the Super Save contract, but as Northwest would not do so, she settled on a compromise rate. She confirmed that on or about May 31, 2011, she talked with Mr. Greg Johansen (“Mr.

Johansen”) of Super Save and provided him with a copy of the Northwest contract. [ 31 ] Further, Ms. Thompson confirmed that on January 25, 2011, she was not aware if she could cancel the contract with Northwest. [ 32 ] It became apparent during her cross-examination that Ms. Thompson willingly entered into a contract with Super Save to reduce the cost to Craftsman. Also, she knew that Craftsman had a more costly contract with Northwest, but was unaware of the term. [ 33 ] Finally, Ms.

Thompson confirmed that she understood that Super Save would wait until the expiry of the Northwest/Craftsman contract to commence the term of the waste removal services contemplated by the Super Save/Craftsman contract. [ 34 ] Under cross-examination by Mr. Jachimowicz, Ms. Thompson agreed that Northwest did not deliver a new bin, and any discrepancy about the size of the bin that had been explained to her may not have been accurate, as she came to understand that the bin provided by Northwest and the bin to be provided by Super Save were the same size. [ 35 ] Lastly, Ms.

Thompson understood that Craftsman could not cancel the contract with Northwest, and that Mr. Cheng had explained that the term of contract with Super Save would not commence until the Northwest/Craftsman contract had expired. Issues a)

(

i) Is Craftsman liable for breach of contract? (ii) If so, what are the damages? b) (

i) Did Northwest interfere in the Super Save/Craftsman contract? (ii) If so, what are the damages?

c) What arises if there is a difference between the Super Save/Craftsman and Northwest/Craftsman contracts? The Law [36] Mr. Kitsul referred to the following cases and authorities:

a) Liquidated damages (i) 32262 B.C. Ltd. v. Cryer Holdings Ltd. 1996 CarswellBC 1957 (ii) 32262 B.C. Ltd. v. Companions Restaurant Inc. (1995), 17 B.C.L.R. (2d) 227 (iii) Direct Cash ATM Processing Partnership v. 564024 Alberta Inc., 2006 ABPC 112 (iv) Alwest Neon Signs Ltd. v. Henze, 1989 ABCA 304 (v) 32262 BC. Ltd. v. See-Rite Optical 1998 ABCA 89 , [1998] 9 W.W.R. 442 (vi) Keneric Tractor Sales Ltd. v. Langille et al, (SCC), 1987 43 D.L.R. (4th) 171 (vii) Bayliss Sign Ltd. v. Advantage Hldg. Ltd., 1986 8 B.C.L.R. (2d) 230 (viii) Dunlop Pneumatic Tire Co. Ltd. v. New Garage and Motor Co. Ltd. [1915] A.C. 79 (ix)

Chapter 6, Liquidated Damages - Damages for Breach of Contract (2d) by Harvin D. Pitch and Ronald M. Snyder (

x) Chapter 1, Compensation for Pecuniary Loss: General Principles – Contract Damages 2004-Rel. 2 (xi) Super Save Disposal v. Rat Rod Kustoms Ltd. et al, (March 30, 2010), Reasons for Judgment of the Honourable JudgeHicks, Provincial Court of BC, File no. C64279, 66283, 63716 and 64443 (Surrey Registry)

b) Tort of Intentional Interference with contractual arrangements (

i) Johnson v. BFI Canada Inc. et al, 2010 MBCA 101 (ii) Super-Save Enterprises Ltd. v. Del’s Propane Ltd., 2004 BCCA 183 (iii) Verchere v. Greenpeace Canada (2004) 2004 BCCA 242 , 29 B.C.L.R. (4th) 75 (iv) CLE – Employment Law Conference – 2006 –

Chapter 10.2 – Inducing Breach of an Employment Contract

c) Right of First Refusal Memorandum prepared by Mr. Kitsul dated January 12, 2012 with case references contained therein. [37] Additionally, I reviewed the decision of my colleague, His Worship Roberts, in BFI Canada Inc. v. Persia Food Products Inc., 2010 BCPC 308 . At paragraph 9, His Worship Roberts referred to Fridman, The Law of Contract, 5th Edition at p. 770 asfollows: (ii) Liquidated damages As long ago as 1829, Tindal C.J. said that the courts saw “nothing illegal or unreasonable in the parties, by their mutual agreement,settling the amount of damages, uncertain in their nature, at any sum upon which they may agree.” Such an agreement must be

differentiated from one which settles upon an amount of money (which might even cover the damages suffered by the injured party but is not based thereon) and is intended to ensure the performance of the contract. In other words, it is not meant to be a genuine pre-estimate of loss suffered, but is a threat, something held over the other party in terrorem . It is a question of construction whether the clause in question creates a penalty or fixes liquidated damages.

It is the language of the contract as a whole, as Estey J. explained in one case, that must determine the intent and purpose of the parties, and while the particular words used are important, the mere use of the words “liquidated damages” or “penalty” is not conclusive. It is a question of law, in every case, whether the conventional sum is a penalty of liquidated damages, and it is decided on a consideration of the whole agreement. In Dunlop Pneumatic Tyre Co. v. New Garage & Motor Co., Lord Dunedin laid down some general rules for the guidance of the courts.

These were culled from earlier decisions, and have been accepted by courts in Canada, which, indeed operated on those principles before 1915 and still do so.

(1) The sum in question will be a penalty if it is extravagant and unconscionable in amount in comparison with the greatest loss that could possibly follow from the breach… [ 38 ] Continuing at paragraphs 10 and 11, His Worship Roberts said: [10] Relying on the

summary of the law on this subject in Fridman’s Law of Contract, it is my view the language in paragraph 7 of the agreement providing for liquidated damages is not meant to be a genuine pre-estimate of loss suffered, but is indeed, borrowing from Fridman, “a threat, something held over the other party in terrorem” . The three months notice, i.e. 90 days before the end of the specified current term, identifies the greatest loss that could possibly follow from a breach. In other words, the Claimant operating a waste disposal business needs no more than three months notice in order to try and replace the customer.

A claim for damages based upon the multiple of the number of months remaining in a 4 or 5 year contract where the right to terminate is confined to the end of such lengthy term is, again to borrow from Fridman, “extravagant and unconscionable in amount in comparison with the greatest loss that could possibly follow from the breach.” [11] Therefore, it is my conclusion that the claim of the Claimant based as it is on the liquidated damages provision of paragraph 7 of the customer service agreement is unconscionable, is in fact a penalty, and as such is against the public policy of the law of contract and should not be allowed. [ 39 ] Also, I reviewed the decision of the Honourable Mr.

Justice Fitch in Super Save Disposal Inc. v. Blazin Auto Ltd. and Daily Sun Investment Co. Ltd. 2011 BCSC 1784 (“Blazin”) . A

summary of the law concerning liquidated damages and a penalty is summarized by Mr. Justice Fitch in paragraphs 26 to 39, as follows: [26] The enforceability of a liquidated damages provision in an agreement engages two competing objectives: freedom of contract versus the right of the courts to intervene in a given case to relieve against an oppressive or unconscionable result flowing from enforcement of the liquidated damages term.

It is well settled that the enforceability of such a term turns on whether it is a genuine pre- estimate of the expected loss that a party will sustain in the event of a breach of contract or a penalty clause so oppressive or unreasonable that equitable intervention is justified to prevent an injustice. [27] On the authorities drawn to my attention in these appeals, the following non-exhaustive list of guiding principles can be identified. [28] The characterization of the provision in issue is either a genuine pre-estimate of expected loss or a penalty requires a case- specific assessment: 32262 B.C. v.

See-Rite Optical , 1998 ABCA 89 , at para. 15 . [29] The issue is to be decided upon the terms of the contract and “inherent circumstances” of each particular contract, Dunlop Pneumatic Tire Co. Ltd. v. New Garage and Motor Co. Ltd., [1915] A.C. 79 , per Lord Dunedin at pages 86 and 87. [30] Though the parties may use the words “liquidated damages” or “penalty” in the agreement itself, the parties’ characterization of the clause in the contract as one or the other is not conclusive: Dunlop Pneumatic Tire Co. Ltd. v. New Garage and Motor Co. Ltd., supra .

Similarly, the absence of such characterizing phrases is neither fatal to the plaintiff’s claim for liquidated damages or to the defendant’s challenge that the clause at issue amounts to a penalty: Bayliss Sign Ltd. v. Advantage Holdings Ltd. (1986), 9 B.C.L.R. (2d) 230 (Co.Ct.) , at p. 241 .

In each case, the court must make an assessment as to whether the clause is in truth a genuine pre-estimate of anticipated loss in the event of a breach, or an in terrorem clause inserted to compel performance of a contractual obligation. [31] Judicial interference with a liquidated damages provision will be justified if enforcement of the term results in payment of a sum which is extravagant and unconscionable in comparison with the greatest loss that could conceivably be proved to have followed from the breach: 32262 B.C. v.

See-Rite Optical , supra , at para. 13 . [32] Conversely, a liquidated damages provision is more likely to be enforced where the claim approximates the amount to which the claimant would otherwise have been entitled according to principles of general contract law: 32262 B.C. v. See-Rite Optical , supra , at para. 16 to 18 . [33] The onus of establishing that a stipulated sum is a penalty rather than a genuine pre-estimate of damages that the parties have agreed in advance will be sustained in the event of a breach of the contract, rests on the party against whom the stipulated sum is claimed.

In Sign-O-Lite Plastics Ltd. v. Medallion Management Inc. , [1979] 16 B.C.L.R. 284 (Co.Ct.) , the law in this area was summarized in these terms at p. 288: The fact that a sum may be a penalty is a matter which may be raised by the defendant by invoking the equitable jurisdiction of the court in the same manner as other vitiating elements such as duress and undue influence. This, of course, is done by entering an appearance and filing a statement of defence. See also on this point Super Save Disposal Inc. v. Rat Rod Kustoms Ltd. , (30 March 2010), Surrey C64279 (B.C. Prov. Ct.) at paras. 5

and 8; and Super Save Disposal Inc. v. Makhija Holdings Inc., 2011 BCPC 249 , at para. 21 ; and finally, Bayliss Sign Ltd. v. Advantage Holdings Ltd. , supra at paras. 236 and 240. [34] If the provision is found to constitute an unenforceable penalty, the plaintiff must prove its damages in the ordinary way and the defendant is entitled to advance the position that the plaintiff ought reasonably to have taken certain mitigating steps: Bayliss Sign Ltd. v.

Advantage Holdings Ltd., supra at page 240. [35] The essence of Super Save’s argument on appeal is that, independent of a liquidated damages claim, the damages payable in a contract action would be the stream of income lost over the balance of the term of the agreement. In these circumstances, it is argued that the claim for liquidated damages pursuant to the contract in the same amount cannot be construed as anything other than a genuine pre-estimate of damages.

As the appellant’s counsel put it: If the appellant under ordinary contract law would have been entitled to the loss of the stream of income as a result of the breach of contract, then claiming the same amount as liquidated damages should not be construed as anything other than a genuine pre-estimate of damages…As such, there would be nothing oppressive, extravagant or unreasonable in setting liquidated damages in an amount that the appellant would have been entitled to claim under ordinary contract law. ….. [37] A case-specific inquiry that takes into account the “inherent circumstances” of each contract in a case of this kind obliges the court to take cognizance of a variety of factors.

For example, the relationship between the parties may be relevant. In this case, the agreements were entered into by commercial entities who might be presumed to have relatively equal sophistication and bargaining power. [38] The type of contract may be relevant. Many of the cases cited in argument deal with signage contracts, which may well raise different considerations than those that exist in the case at bar. A custom-made sign may be unsalable upon breach of the contract. A waste disposal bin is, on the other hand, generic and may be provided to the next customer.

See, on this point, Super Save Disposal Inc. v. Rat Rod Kustoms Ltd., supra at para. 8; and Super Save Disposal Inc. v.

Makhija Holdings Inc. , supra , at paragraph 14 . [39] The length of the contract, the length of the term remaining on the contract when the breach occurs, whether the breach occurred during a renewal period automatically engaged by the customer’s failure to give the required notice of termination, any notice period provided for in the contract for termination, and the precise terms of the liquidated damages clause are among the factors that a court may determine to take into account in deciding in a particular case whether the clause is a genuine pre-estimate of damages or a penalty. [ 40 ] In the Blazin case, neither Respondent appeared.

Therefore, the Respondents in those cases were unable to rebut the onus that the provisions in the contracts were a penalty rather than liquidated damages. [ 41 ] In particular, paragraphs 31 and 32 of the Blazin decision and the comments of my colleague Roberts are applicable to the issue of liquidated damages. Discussion [ 42 ] As noted above, Mr. Kitsul conceded that the Claimant is not entitled to double recovery. Therefore, even if both Defendants are liable, the maximum damages that may be recovered are $1,888.99 plus the filing fees and costs of service. (a) (

i) Is Craftsman liable for breach of contract? [ 43 ] The circumstances of this case appear to be common place within the waste removal industry. There may be instances for a provider of waste removal services not to exercise its rights to match a proposal made by a competitor. Also, it would appear that the waste removal industry must obtain new clients, as inevitably, some existing clients will cease to be in business, move locations and, generally, adjust their business model, all of which lead to the expiry of some contracts. [ 44 ] When Ms.

Thompson was contacted, she did not know the details of the Northwest/Craftsman contract. Craftsman had a contract with Northwest that had renewed until 2015. If Ms. Thompson had that information, Craftsman may not have entered into the contract with Super Save. Regardless, Ms. Thompson was responsible to know Craftsman’s obligations with Northwest prior to Craftsman contracting with Super Save. Ms.

Thompson willingly had Craftsman enter into a contract with Super Save because the cost would be less than her existing contract with Northwest. [ 45 ] I have concluded that Craftsman breached its contract with Super Save. The fact that Super Save would not be required to start service for over 4 years is not relevant to determine whether or not Craftsman was liable. (a) (ii) What is the measure of damages: [ 46 ] Super Save claims the cash flow for the 3-year term of the contract as a liquidated damage. [ 47 ] The signage cases which form the basis for the decisions relied upon by Mr.

Kitsul conclude that once the sign has been built and installed, it is incorrect to measure the damages based on the cost of the materials. In those cases, the proper measure of damages is the cash flow over the term of the contract. [ 48 ] However, I am of the opinion that the signage cases can be distinguished from the facts of the case at bar, which concerns the provision of a waste removal service.

As His Worship Roberts concluded, it is difficult to accept that a liquidated damage would be the income lost over the term of the contract for provision of a waste removal bin, as the Super Save/Craftsman contract allowed Super Save to terminate the contract upon 30 days’ notice. Furthermore, Super Save would not be required to provide a bin for over 4 years after the date of the Super Save/Craftsman contract.

[49] I agree with the reasoning of His Worship Roberts. Paragraph 11 of the Super Save/Craftsman contract is a penalty. However, inother circumstances, the provisions in paragraph 11 may be of genuine pre-estimate of damages, and therefore, enforceable, but that willbe dependent on the facts of each case. [50] What damages, if any, should be awarded in the case at bar? I am of the opinion that Super Save suffered nominal damagesarising from the salary and expenses for Mr. Cheng and overhead associated with establishing the account with Craftsman.

Super Savewas entitled to terminate the contract upon 30 days notice. Using that as a manner in which to establish their damages, I am of theopinion that 3 months at the contractual rate will compensate Super Save for damages. Therefore, Super Save will recover damagesagainst Craftsman for 3 months x $46.85 (monthly payment under the contract), which is $140.55. I have made no allowance for HST. [51] Additionally, Super Save is entitled to filing and service fees. (

b) Is Northwest liable for the tort of interference of a contractual arrangement? [52] The following portion of Johnson v. BFI Canada Inc. et al, 2010 MBCA 101 is applicable to the case at bar. [21] He identified the key legal elements in the tort which was the subject of the suit: The tort of inducing breach of contract has six elements. The six elements are set out in the case law in the defendants’ [sic] book ofauthorities, and I’d refer you, in particular, in that book of authorities, to tab number 2, which is the excerpts from Fridman.

The six elements in the context of this case and which must be provided by the plaintiff, if the plaintiff is to be successful, are plaintiffwould have to prove there existed a valid and enforceable contract between the plaintiff Johnson and Top Line – be number one. Two,that BFI knew that the Johnson/Top Line contract existed. Three, that BFI intended to bring about the breach of the Johnson/Top Linecontract. Fourthly, that BFI’s conduct caused a breach of the Johnson/Top Line contract. Fifthly, that the plaintiff suffered damage as aresult of the breach of a Johnson/Top Line contract.

And sixthly, that BFI was not justified in the action that it took that resulted in thebreach of the Johnson/Top Line contract. [29] Then, under the heading “The Legal Principles,” he said (at para. 30): The tort of interference with economic relations requires that the following elements be established: • The existence of a valid business relationship or business expectancy between the plaintiff and another party; • Knowledge by the defendant of that business relationship or expectancy; • Intentional interference which induces or causes a termination of the business relationship or expectancy; • The interference is by unlawful means; • The interference by the defendant must be the proximate cause of the termination of the business relationship or expectancy; and • There is a resultant loss to the plaintiff. [53] For Northwest to be liable, it would have had to initiate discussions that led to the interference with the Super Save/Craftsmancontract.

However, this claim would not have arisen, but for Mr. Cheng’s cold call on Craftsman. It is not surprising that Northwesttook steps to retain their customer. [54] I am left with the impression that what occurred was common within the waste removal industry. When one compares the SuperSave and Northwest contracts, they are similar. Each party had their retention officer give evidence. [55] I am of the opinion that the evidence does not establish that there was any intentional interference by Northwest. Northwestresponded to the efforts by Super Save to take one of Northwest’s customers away from them.

At the very least, Craftsman should havehad time to decide which waste disposal service provider to utilize. Ultimately, that is all that occurred. [56] If Super Save were to prevail, it would only encourage an aggressive business practice.

It is hardly what one would haveexpected when, at the time the contract was signed, Super Save had no knowledge of the remaining term of the existingNorthwest/Craftsman contract. [57] I doubt that a prudent business person would enter into a contract which would not commence for over 4 years, knowing full wellthat they are protected because of the notice provisions to terminate the contract upon 30 days’ notice (see paragraph 3 of the SuperSave/Craftsman contract). [58] I am not persuaded that Northwest attempted to interfere with the Super Save/ Craftsman contract.

Rather, Super Save initiatedthe sequence of events that occurred. One might argue that Super Save committed the tort, but that discussion will be left for anotherday, as Northwest did not take action against Super Save. [59] Accordingly, the case against Northwest is dismissed. [60] However, if I am wrong in my analysis, the measure of damages would be the same as against Craftsman. As Super Save is onlyentitled to one set of damages, they are not entitled to damages against Northwest. (

c) What effect, if any, arise as a result of the difference between the Super Save/ Craftsman and Northwest/Craftsman contracts? [61] Having reached my conclusion in paragraphs [58] and [60] above, it is not necessary to consider the argument made by

Mr. Kitsul with respect to the right of first refusal in his submissions dated January 12, 2012. If I am wrong in this conclusion, I adopt the reasons set out in paragraph [60] above.

Summary [ 62 ] There will be judgment against Craftsman as follows: Damages $140.55 Filing Fee $156.00 Service Fee $ 80.00 Total: $376.55 [ 63 ] The case against Northwest is dismissed. [ 64 ] Super Save is entitled to pre-judgment interest from January 25, 2011 to the date of this Judgment, and post-judgment interest following the date of this judgment, which sums will be calculated by the Court Registry. ___________________ Lawrence A. Kahn