Northwest Waste Solutions Inc v. Yue Rong Guan Date:, 2012 BCPC 449

Citation: Northwest Waste Solutions Inc v. Yue Rong Guan Date: 20121207 2012 BCPC 0449 File No: 24553 Registry: Richmond IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: NORTHWEST WASTE SOLUTIONS INC. CLAIMANT AND: YUE RONG GUAN DBA YUK SHAN FARM AND HOUSEWISE CONSTRUCTION LTD. DBA SEGAL DISPOSAL DEFENDANTS REASONS FOR JUDGMENT OF HIS WORSHIP L. A. KAHN Appearing for the Claimant: J. Jachimowicz Appearing for the Defendants: Yue Rong Guan

Place of Hearing: Vancouver, B.C. Date of Hearing: November 21, 2012 Date of Judgment: December 7, 2012 [1] This matter came before me on November 21, 2012 pursuant to the Simplified Trial Rules under the Small Claims Act. Itconcerns a contract entered into between the Claimant, Northwest Waste Solutions Inc. (“Northwest”) and the Defendant, Yue RongGuan, doing business as Yuk Shan Farm (“Guan”). The claim against Housewise Construction Ltd., doing business as Segal Disposal(“Segal”) was discontinued. [2] Guan had a contract with Segal for provision of a waste disposal bin.

That contract arose after Guan contacted Segal and, as aresult, the salesman, Yue Ma (“Ma”), negotiated a contract on behalf of Segal. [3] During the course of the Segal contract, from time to time, Ma came by Guan’s premises and picked up the rental cheque forthe bin. [4] While the contract between Segal and Guan was continuing, Ma informed Guan that he was no longer employed by Segal, andwas now employed by Northwest.

As a result, he was unable to pick up the rental cheque, as he had done in the past. [5] During a conversation that took place between Ma and Guan after Ma began working for Northwest, Ma said that Guancomplained about the high costs of the Segal contract. [6] Ma testified that he could arrange for a new contract with Northwest at a lower rate, and also assist Guan to end the Segalcontract, because Guan was being treated unfairly by Segal.

Apparently, this related to “overweight charges” which were not explainedto me by any witness. [7] Guan and Northwest entered into a contract dated March 29, 2012 for a one-year term. The effect of this contract was to saveGuan money as compared to the contract Guan had with Segal. [8] Not surprisingly, when Segal received notice that Guan wanted to terminate the contract, a representative of Segal contactedGuan. As a result, Guan entered into a new contract with Segal, which afforded him further reduced costs.

Once this had occurred, henotified Northwest that he was not prepared to carry out the contract with them. [9] Guan’s complaint, primarily, is that Ma did not explain all of the terms of the Northwest contract to him. [10] I am not prepared to accede to Guan’s submission. Where there is a difference in the evidence between Guan and Ma, I preferMa’s evidence. Guan knew what he wanted, that is, reduced costs for the disposal services, and shrewdly accomplished his goal. [11] Mr. Jachimowicz says that the Claimant is entitled to liquidated damages for the full 12 months of the contract. During hissubmissions, Mr.

Jachimowicz said that Northwest had not delivered a bin. However, Guan advised me that Northwest delivered a binand took it away. As Mr. Jachimowicz was proceeding on the basis that no bin was delivered, I do not consider whether or not the binwas delivered has any importance to the amount of damages. [12] The issue is whether or not the Court should apply the liquidated damages clause, or find that it is a penalty and assess adifferent amount of damages, if any. [13] Mr. Jachimowicz referred me to two decisions. The first is Super Save Disposal Inc. v.

Northwest Waste et al, 2012 BCPC 42, which is a decision I made in February 2012. In that case, I found that the liquidated damage clause was a penalty andawarded 3 months’ rent as damages. [14] In a more recent case, His Worship Darrell W. Roberts, in North West Waste Solutions Inc. v.

Mu Wen Lin dba WestwoodMillwork, 2012 BCPC 209 , also considered the same issue. [15] At paragraph 16, His Worship Roberts says, as follows: [16] While at first I had some concerns about the Claimant’s claim for liquidated damages, based as it was on a very restrictedopportunity to reasonably terminate the agreement, and on a liquidated damages provision buried in dense language toward the bottom ofthe general conditions of the service agreement that allows for collection of the sum of the amounts due to North West for the balance ofthe term remaining on the agreement, some 28 months, the evidence before me has overcome these concerns. [17] The Defendant’s letter of November 14, 2011 did not raise any concern that the liquidated damages provision was a penalty, heallowed the agreement to be renewed twice and he sought to terminate the agreement simply because he had decided to make alternativearrangements with another waste service provider. [18] Further, the Defendant’s answer as to what happened to the Claimant’s waste disposal bin and his allowing it be taken away byhis new service provider so that it could not be recovered by the Claimant is the clincher in my decision to allow the Claimant to recoveras damages the full amount of its claim.

It is a well established principle in the law of equity which is part of the law of BritishColumbia under the Law and Equity Act, R.S.B.C. 1996, c. 253, that “he who comes to equity must do equity”, or as more commonlystated, a claimant in equity must come to court with clean hands. [16] As in the case of North West Waste Solutions Inc. v. Mu Wen Lin dba Westwood Millwork, Mr. Guan does not come to thisCourt with clean hands. Nonetheless, I fail to see how the liquidated damages clause in the case at bar is a genuine pre-estimate of

damages. [ 17 ] Mr. Jachimowicz submitted that if I found the clause to be a penalty, the very least, there should be an award for 3 months rent plus the cost of filing fees and service fees, which was the outcome in the Super Save Disposal Inc. v. Northwest Waste Solutions et al case noted above. [ 18 ] I draw a distinction between the Super Save Disposal Inc. v. Northwest Waste Solutions et a l and the case at bar. In Super Save Disposal Inc. v. Northwest Waste Solutions et al, I found that Northwest Waste Solutions Inc. was seeking new business.

There was an issue in that case whether or not there was an inducement to breach an existing contract between Craftsman Millwork & Design Ltd. and Super Save Disposal Inc. In the case at bar, there was no inducement. Mr. Guan was the impetus for the Northwest contract. [ 19 ] I have determined, as noted above, that the liquidated damages clause is a penalty, and not a genuine pre-estimate of damages that arose from the salesman’s time, the administration of the contract, any expense incurred by Northwest, and the expectation of profit from the rental of the bin as contemplated by the contract.

However, taking into account the above factor, it is reasonable that the Claimant recover 4 months rent as damages. [ 20 ] Accordingly, the Claimant is entitled to damages as follows: 4 months x $265 service rate = $1,060.00 Filing fees = $156.00 Service fees = $20.00 TOTAL $1,236.00 [ 21 ] The Claimant is entited to pre-judgment interest from March 29, 2012 to the date of this Judgment, which sum will be calculated by the Court Registry. ________________________ Lawrence A. Kahn Adjudicator