Super Save Disposal Inc. v. Tristar Cap & Garment Date:, 2013 BCPC 79

Citation: Super Save Disposal Inc. v. Tristar Cap & Garment Date: 20130410 2013 BCPC 0079 File No: 24237 Registry: Richmond IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SUPER SAVE DISPOSAL INC. CLAIMANT AND: TRISTAR CAP & GARMENT LTD. DEFENDANT REASONS FOR JUDGMENT OF HIS WORSHIP BRIAN WALLACE Counsel for the Claimant: J. Kitsul Counsel for the Defendant: J.W. Jachimowicz Place of Hearing: Richmond , B.C. Date of Hearing: April 5, 2013 Date of Judgment: April 10, 2013

[ 1 ] The Claimant seeks liquidated damages of $1,612.80 plus costs, from the Defendant for terminating a 2-year agreement for garbage disposal services.

The parties signed the contract on January 12, 2011. [ 2 ] The agreement contains the following term: The Customer further acknowledges and agrees that pending the Effective Date of this Agreement, the Customer (1) shall not enter into any other new third party contract and (2) shall not renew any then current third party contract and, in the case of any then current third party contract still in force and effect, the Customer shall take all necessary steps to forthwith give notice to the third party that it is not renewing that third party contract. [ 3 ] The Effective Date of the Agreement is “the first day after the expiration of the Customer’s third party contract”, which here was said to be July 1, 2011, the day following the end of the then-current term of the Defendant’s garbage disposal services contract with Northwest Waste Solutions Inc. (Northwest). [ 4 ] The Defendant’s controller, Harish Kuber signed a letter prepared by the Claimant and sent to Northwest, received on January 19, which purported to be “formal notice of cancellation of our service agreement.” However, the timing of the letter was too early to terminate the contract with Northwest at the end of the term, by the provisions of that contract. [ 5 ] On January 24, 2011, Mr.

Kuber signed a “renewal” contract with Northwest, and advised the Claimant the Defendant “will continue to utilize Northwest” and, “Accordingly, we will not require your services at this time.” [ 6 ] The Claimant says that the Defendant thereby breached the Agreement with the Claimant.

The Claimant chose to accept the breach and brought this action for liquidated damages equal to twelve-months’ billings, a remedy available under the contract. [ 7 ] The Defendant responds that the Claimant, by writing the letter to Northwest giving notice to terminate its then-current waste disposal services contract, absolved the Defendant of the obligation to do so.

The Defendant also says that because the notice was ineffective, it could renew its contract with Northwest, with the result that the Effective Date became the day following the expiry of the new term, which was February 1, 2013. [ 8 ] I am not satisfied that the Claimant’s conduct in writing the ineffective notice of termination to Northwest amended the terms of the contract obliging the Claimant to take that step.

However, it doesn’t matter because the window of opportunity to give that notice had not yet opened, so it cannot be said that the Claimant missed it. [ 9 ] Further, by renewing its contract with Northwest, the Defendant breached the express term of the contract that “the Customer (1) shall not enter into any other new third party contract and (2) shall not renew any then current third party contract.” [ 10 ] It is clear from my foregoing conclusion that I do not accept the Defendant’s submission that because the Effective Date had not yet passed, the contract did not create enforceable rights and obligations.

It is true that some rights and obligations do not arise until the Effective Date, but the contract clearly intends to create others as of the date it is executed. The opening words in the term at issue, “The Customer further acknowledges and agrees that pending the Effective Date of this Agreement”, make it clear that the Defendant’s obligation not to contract with a competitor commences when the contract is executed. [ 11 ] Having concluded that the Defendant has breached the Agreement, I must determine whether the liquidated damages claimed are, in fact, a penalty.

If they are, I have the discretion under the Law and Equity Act , R.S.B.C. 1996, c.253 to “relieve against” them. Whether an amount is a penalty depends on facts. The facts that I find persuasive here are that the claim is for the lost payments on the Agreement for only ½ of the Agreement’s remaining term, and that the Defendant simply ignored its obligations under the Agreement, apparently having been persuaded to do so by a representative of Northwest. In the circumstances, I am satisfied that the claim is not a penalty.

If I am incorrect in that conclusion, it is not so onerous that I would exercise my discretion to relieve against it. [ 12 ] The claim is allowed in the amount of $1612.80, plus interest at the post-judgment rate from January 24, 2011 to today, plus costs of $316.00. _____________________ Brian J Wallace, QC Adjudicator