Super Save Disposal Inc. v. A.M.T. Automotive Date:, 2013 BCPC 50

Citation: Super Save Disposal Inc. v. A.M.T. Automotive Date: 20130307 2013 BCPC 0050 File No: 24920 Registry: Richmond IN THE PROVINCIAL COURT OF BRITISH COLUMBIA BETWEEN: SUPER SAVE DISPOSAL INC. CLAIMANT AND: A.M.T. AUTOMOTIVE MACHINE TECHNOLOGY

(1995) LTD. DEFENDANT REASONS FOR JUDGMENT OF HIS WORSHIP DONALD YULE Counsel for the Claimant: J.R. Kitsul Appearing for the Defendant: Peter Gosal Place of Hearing: Richmond , B.C.

Date of Hearing: February 22, 2013 Date of Judgment: March 7, 2013 INTRODUCTION [ 1 ] In this action the Claimant, Super Save Disposal Inc. (Super Save) seeks to recover from the Defendant, A.M.T. Automotive Machine Technology

(1995) Ltd. (AMT) the sums of $1,761.35 as liquidated damages for the wrongful termination by AMT of a Written Service Agreement and $593.49 as a debt owed for services provided by Super Save under the Service Agreement. The parties executed a one page Service Agreement dated May 12, 2011 (the Agreement) with respect to the supply of one waste container and the removal of waste materials for a monthly charge of $82.00 plus HST. The contract was for a 2 year term with three months free. The effective date of the contract was July 12, 2011.

The bin was delivered on July 12, 2011 and was ultimately retrieved by Super Save on March 2, 2012. According to its records (Claimant’s Trial Statement document, page 17) the bin was serviced on 5 occasions (August 16, September 7, October 5, November 2 and November 30, 2011) and on all of these occasions there was some waste in the container. Super Save did not commence to charge AMT until October, 2011. AMT did not pay Super Save anything for its services under the Agreement and Super Save ultimately retrieved the container for non-payment. [ 2 ] The terms and conditions of the Agreement,

Section 11 – Failure to Perform provides as follows: If Customer purports to terminate this Agreement prior to the expiration of its terms or any renewal thereof, Contractor will have the option to either: (

a) affirm this Agreement, whereby Customer hereby irrevocably agrees and consents to any/all, permanent, interlocutory and interim relief that Contractor may seek from the Courts to enforce its rights hereunder, 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 9 months, or, if none, the billing projected by Contractor for the first month, multiplied by 9 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 light of the anticipated loss to Contractor caused by the termination and are not imposed as a penalty. In the event Customer fails to pay Contractor all amounts which become due under this Agreement or fails to perform its obligations hereunder, Customer agrees to pay any and all costs incurred by Contractor as a result of such action, including reasonable lawyer’s fees on a solicitor and own client basis.

If Customer is in default of any of the terms and conditions of the Agreement or becomes insolvent or is placed in receivership or becomes bankrupt, Contractor may, at its option, terminate this Agreement without notice and take possession of the Equipment and may pursue all remedies as are available to Contractor. [ 3 ]

Section 3 of the Terms and Conditions provides that the Agreement shall be automatically renewed for a further 2 year term but may be terminated at the end of any 2 year period by the Customer providing not more than 120 days and not less than 90 days written notice prior to the end of the term or may be terminated at any time by the Contractor upon not less than 30 days prior written notice to the customer. The Agreement may not be terminated or otherwise cancelled by either party except as provided in the Agreement. BACKGROUND CIRCUMSTANCES [ 4 ] Mr.

Gosal, the Principal of AMT, was approached on or before May, 2011 by Nash Mohammed, a sales representative of Super Save. At the time, AMT had a disposal service agreement with another company, North West. Mr. Mohammed was seeking to persuade AMT to change its disposal services contractor. He succeeded in the sense that Mr. Gosal executed the new service Agreement with Super Save. Mr. Gosal’s evidence however is that Mr. Mohammad undertook to terminate the existing contract with North West and assured Mr. Gosal that AMT would not have to pay Super Save until the North West contract was terminated. Mr.

Gosal asserts that he had an annual contract with North West and its term expired in November or December, 2011. Around that time, North West removed its container. Mr. Gosal did not communicate directly with North West to terminate AMT’s service contract with North West. Mr. Gosal says that he gave his original service contract with North West to Mr. Mohammed but he did not sign any “authorization letters” to facilitate Mr. Mohammed terminating the contract with North West. A copy of the North West contract is not in evidence. Mr.

Mohammed had left Super Save’s employment by August, 2011, the month after Super Save’s container was delivered to AMT’s premises. Mr. Gosal thought he deposited waste in Super Save’s container on only two occasions, but does not dispute the accuracy of Super Save’s records showing use on 5 occasions. Throughout the fall, Mr. Gosal asserts that he continued to pay North West. [ 5 ] The file left by Mr.

Mohammed on his departure from Super Save does not contain an original or any copy of the North West service contract, nor copies of the several letters that a salesperson would be expected to have a prospective customer sign in order to bring about the termination of an existing service agreement with another contractor. Ms. Gordison confirmed on behalf of Super Save that with such appropriate documentation a sales representative will undertake to arrange for the termination of an existing service agreement on behalf of a prospective customer. [ 6 ] Mr.

Gosal asserts that after the removal of the North West container in November or December, 2011, and the removal of the Super Save container in March, 2012, he used a Smithrite container belonging to an adjacent business. AMT did not have a service contract with Smithrite nor did AMT pay any share of the cost of the Smithrite container. The Claimant’s Trial Statement includes a photograph taken May 22, 2012 showing a Smithrite container in front of the AMT premises. Ultimately, AMT signed a new service contract in December, 2012 or January, 2013, with yet another service contractor Emmtera.

That service contract is not in evidence.

[ 7 ] At page 16 of the Claimant’s Trial Statement are computerized customer notes respecting AMT. They record the following communications:

a) On August 17, 2011 Mr. Gosal called inquiring when the North West bin would be removed as he was still getting billed. A Super Save employee contacted Mr. Mohammed who said he would “look into it tonight and get back to us”. There is no evidence as to what, if any, reply was received from Mr. Mohammed.

b) On August 22, 2011, Mr. Gosal called again wanting to know what was happening with the North West bin;

c) On August 25, 2011, “Chris” spoke with Mr. Gosal who was “working on getting a copy of the original SA (Service Agreement) from NW (North West)” and would fax it to Super Save ASAP;

d) On December 7, 2011 it appears a suspension of service letter was sent to AMT;

e) On December 20, 2011 Mr. Gosal advised he was still paying North West and had both bins there. “Chris” advised that Super Save needed a copy of the original Contract “then we can do credits”.

f) On January 27, 2012, Super Save sent a bin removal letter to AMT;

g) On March 2, 2012, the Super Save bin was retrieved from the AMT remises;

h) On March 13, 2012, Super Save sent a “breach letter” to AMT;

i) On March 16, 2012, Mr. Gosal called indicating that Super Save was supposed to have taken care of this a long time ago and he would not be paying the sum demanded. [ 8 ] Although Mr. Mohammed is no longer an employee of Super Save, he was apparently available as a witness to either party as Mr. Gosal spoke to him on the morning of this hearing. DISCUSSION AND ANALYSIS [ 9 ] The Super Save service Agreement, in

Section 3 of the Terms and Conditions, provides that it may not be terminated by either party other than as provided in the Agreement.

Section 3 permits termination on notice by the customer but only at the end of any “term”. In addition,

Section 2 of the Terms and Conditions provides that if there is a prior service contract in effect, then the effective date of the Super Save service Agreement shall be the first day after the expiration of the prior contract. The customer also agrees that he will not accept any offer from another service contractor nor renew any current service contract. It appears that these types of terms are standard in the industry. The contracts are intended not to be easily terminated by a customer prior to expiration.

Such common terms make it difficult to understand why the effective date of the Super Save service Agreement with AMT was fixed at July 12, 2011 if Mr. Gosal gave Mr. Mohammed the original of his North West Service Agreement which showed a termination date of November or December, 2011. Attempts at early termination are apparently not unheard of in the industry (see North West Waste Solutions Inc. v 0929513 B.C. Ltd. BCPC Vancouver Registry No. 1240693, January 31, 2013). I accept Mr. Gosal’s evidence that he did give the original North West Contract to Mr. Mohammad. I accept Mr. Gosal’s evidence for 3 reasons.

First, he gave his evidence in a straightforward manner, acknowledging his use of the Super Save containers and his use of other containers. Second, Mr. Mohammed was not called as a witness to rebut Mr. Gosal’s statement. Third, Super Save’s own notes of the conversation on August 25, 2011 indicate Mr. Gosal was attempting to get a “copy” of the “original” Service Agreement from North West. That is consistent with his having given the original to Mr. Mohammed. I also accept Mr. Gosal’s evidence that Mr. Mohammed said he would arrange for termination of the North West Agreement and removal of its bins.

Super Save’s conduct and its customer log notes are consistent with this promise by Mr. Mohammed. The notes in August, 2011, before there was any question of AMT owing money to Super Save, record Mr. Gosal on two occasions initiating calls to find out when the North West bins will be removed. Super Save then requests a copy of the North West contract for the implicit purpose of terminating it. As late as December 20, 2011 “Chris” indicates he needs a copy of the North West Agreement so that “we can do credits”. This is consistent with Mr.

Gosal’s evidence that he was told he would not have to pay Super Save until his obligations to North West were at an end. In his Trial Statement Mr. Gosal asserts that a person at Super Save named “Steve” told him not to pay the Super Save invoices until the problem of the continuing obligation to North West was resolved. Although there was no one named “Steve” in the employ of Super Save as either a sales representative or customer service person, I conclude that Mr. Gosal is simply mistaken in the name of the person to whom he spoke. In December, 2011, “Chris” talked about “doing credits”.

I conclude that this is the person to whom Mr. Gosal likely spoke. [ 10 ] In the result, I find that Mr. Gosal did give his original North West Contract to Mr. Mohammed. Mr. Mohammed did undertake to terminate AMT’s contract with North West. Mr. Mohammed did promise that AMT would not have to pay Super Save until the existing Agreement with North West was terminated. I further find that Mr.

Mohammed did not terminate AMT’s Agreement with North West. [ 11 ] Super Save’s claim for liquidated damages is based upon its Agreement having an effective date of July 12, 2011 and AMT having breached the Agreement by non-payment (Claimant’s Trial Statement, Statement of Facts). Its bin was delivered on July 12, 2011. The service of waste removal was conducted on 5 occasions, as set out in Paragraph 1 above, commencing August 16, 2011. Super Save sent invoices dated September 30, October 31 and November 30, 2011 for services to be supplied in the months of October, November and December, 2011.

It also sent invoices dated December 31, 2011 for service to be performed in January, 2012 and an invoice dated January 31, 2012 for services to be performed in February, 2012, and an invoice dated February 29, 2012 for service to be performed in March, 2012 [ 12 ] As noted, Super Save did not provide removal services in December, 2011, January, 2012 or February, 2012. Its last pick up was on November 30, 2011.

[13] AMT’s obligation to pay Super Save was subject to three qualifications. First, the Agreement itself stipulated “3 months free”. Second, Mr. Mohammed represented that AMT would not have to pay Super Save until AMT’s obligations to North West wereterminated. Third, the Agreement itself in its Terms and Conditions, sec. 2, provides inter-alia that, if there is an existing service contractwith a third party, the effective date of the Super Save Agreement shall be the first day after the expiration of the customer’s third partycontract.

Super Save’s servicing on August 16, September 7 and October 5, 2011, could be regarded as the first 3 free months, assumingthe effective date of the Agreement was July 12, 2011. This was obviously the basis upon which Super Save commenced its billingprocedures. Its first invoice dated September 30, 2011 was for the month of October, 2011. However, this leaves out of account the twoother factors determining AMT’s obligation to pay. Super Save’s customer notes of the conversation with Mr. Gosal on December 20,2011 indicate that bins from both North West and Super Save were still on AMT’s premises.

Moreover, it is clear that AMT had anexisting contract with North West. I have found that Mr. Mohammed was given the contract. The Super Save Agreement provides by itsown terms that the effective date of the Super Save Agreement will be the first day after the expiration of the North West Agreement. Thus, for both of these reasons, I conclude that AMT was not liable under the Agreement with Super Save to pay the invoices forSeptember 30, October 31 and November 30, 2011. Mr. Gosal thought that the North West bin was removed in either November orDecember, 2011.

Given the note dated December 20, 2011 in the Super Save Customer Log, the bin must have been removed afterDecember 20, 2011. If the North West bin was removed in late December, and the effective date of the Super Save Service Agreementis one day after removal, and if there are 3 months free service, then AMT did not owe Super Save monies until the end of March, 2012. However, before that date, Super Save itself had terminated its Agreement with AMT. Accordingly, I conclude that Super Save’s claimfor liquidated damages is misconceived.

It is based upon the incorrect assumption that AMT was in default for non-payment of theSeptember, October and November, 2011 invoices. That conclusion would have been correct if the effective date of the Super SaveAgreement was July 12, 2011. [14] Counsel for Super Save provided a detailed legal argument respecting why the claim for liquidated damages was enforceableand should not be deemed an unenforceable penalty.

For convenience, I shall list the authorities cited which were: • Dunlop Pneumatic Tyre Company v New Garage and Motor Company Limited 1915 AC 79 (HL); • 32262 BC Limited v See-Rite Optical Ltd. 1998 ABCA 89 , [1998] 9 WWR 442 (Alta CA) • 32262 BC Limited v Companions Restaurant Inc. (1995) (BC SC), 17 BLR (2d) 227 (BCSC) • 32262 BC Limited v Cryer Holdings Ltd.

(1996) BCWLD 2533 (BCSC) • DirectCash ATM Processing Partnership v 564024 Alberta Inc.

(2006) ABPC 112 • AMT Finance Inc. v Gonabady (2010 BCSC 278) • North West Waste Solutions Inc. v Lin (2012 BCPC 209) • BFI Canada Inc v Persia Food Products Inc. BCPC Vancouver Registry No. 1029827, November 24, 2010 • Super Save Disposal Inc. v Makhija Holdings Inc. 2011 BCPC 249 • Super Save Disposal Inc. v Blazin Auto Ltd. 2011 BCSC 1784 • Super Save Disposal Inc. v Rat Rod Kustoms Ltd. BCPC Surrey Registry No.

C64279, March 30, 2010 • North West Waste Solution Inc. v 0929513 BC Ltd. (BCPC Vancouver Registry No. 1240693, January 31, 2013) • Bayliss Sign Ltd. v Advantage Holdings Limited (1986) 8 BCLR (2nd) 230 (Co Ct) [15] In view of the conclusion I have reached respecting the termination of the contract by Super Save I do not need to decide thisissue. [16] With respect to Super Save’s claim for $593.49 for bin removal services it did provide, based on the analysis above, ATM wasnot obliged to pay for those services under the Super Save Agreement whose effective date had not yet started.

The next question iswhether Super Save should be entitled to be paid for its actual services on the basis of unjust enrichment or quantum meruit. I decline tomake an award on either of those grounds. AMT has not been unjustly enriched. It was paying one set of charges for waste removal toNorth West. It was the expectation of both Super Save and AMT that AMT would only pay one set of disposal service charges. It wouldbe otherwise if AMT had no pre-existing Service Agreement in which case it would have had its waste removed without having to payanyone to do so.

I also decline to give judgment to Super Save based on quantum meruit. As noted, it was always the intention of bothparties that AMT only pay one set of disposal service fees. Super Save was aware from the outset that AMT had another servicecontract. Super Save delivered its bin, commenced collection services and commenced invoicing as though nothing but its ServiceAgreement mattered. I expect Mr.

Mohammed’s departure from Super Save’s employment was responsible for this confusion. [17] The Claimant’s claim is dismissed with costs of $26.00 payable to the Defendant. _________________________ Justice of the Peace, Donald W. Yule, Q.C.